Rep. Louise M. Slaughter introduced a bill Friday to close “ethics loopholes” in a five-year-old law that has failed to stop members of Congress from taking advantage of exclusive stock deals that are not available to the general public.
Slaughter (D-N.Y.), a co-author of the 2012 Stock Act, said she decided that amendments to the law are needed because of controversial, discounted stock purchases that were made by Reps. Chris Collins (R-N.Y.) and Tom Price (R-Ga.), now the secretary of health and human services, in 2015 and 2016.
In one of Collins’s stock trades in 2013, he took part in an initial public offering in a foreign market and did not disclose it on financial forms. A possible loophole is that ethics officials and lawmakers are interpreting that requirement to apply only to the U.S. market.
The trades led to accusations of “insider trading” on the part of Collins and Price.
“We are blessed people and we are here to do good for the country,” Slaughter said in an interview. “We are not here to do good for ourselves.”
The proposed law expressly prohibits members from taking part in foreign IPOs, purchasing stock at discounted prices, selling stock at higher than market value or participating in private-placement stock offerings.
The stock purchases in question are in the Australian company Innate Immunotherapeutics. The company produces a drug, MIS416, designed to treat a form of multiple sclerosis that affects about 30 percent of all MS patients. It has not yet been approved by the Food and Drug Administration.
Collins owns more than $20 million in Innate stock — nearly one-fifth of the company — and sits on its board of directors. His children have also purchased stock in the company, as well as his chief of staff, four of his colleagues in Congress and Price. Most of his stock purchases have tripled in value, and the company estimates that the drug could generate as much as $3 billion in profits in the United States if it secures FDA approval.
Most of the stock was purchased at a discounted rate through special offerings of the stock, which became a heated topic during Price’s confirmation hearings and cast a spotlight on Collins’s purchases and role in introducing the company to others in his personal and professional orbit.
“Despite the continued partisan attacks insinuating otherwise, Congressman Collins has followed all ethical guidelines related to his personal finances during his time in the House and will continue to do so,” said Collins spokesman Michael McAdams in a statement to The Washington Post. “He is very proud of the progress the company has made over the years and hopeful it will develop a potentially life-saving treatment.”
During the Senate hearings, Price testified that Collins told him of one of the sales but said other purchases were made by his stockbroker without his knowledge. As part of the confirmation process, Price agreed to sell his health-care stocks, including his $94,000 investment in Innate stocks, if he became a member of President Trump’s Cabinet. Recently filed financial disclosure statements show Price made at least $225,000 in profits when he sold his stocks in February.