|
Friday, September 29, 2000
By GREG GORDON and ANDREW DONOHUE
McClatchy Newspapers
During a year when prescription drug prices and benefits are among
the hottest political topics, dozens of members of Congress also
have another reason to keep their eyes on pharmaceutical companies.
These senators, House members and their families own tens of millions
of dollars in stock in drug manufacturers, whose profits could rise
or fall depending on what Congress does about the soaring prices
of medicine and the push for Medicare drug benefits.
The legislators' stock holdings are legal but create appearances
that trouble some congressional watchdogs and public policy experts.
Rep. Robin Hayes, R-N.C., one
of the wealthiest members of Congress, owned more than $11 million
in drug stocks on Dec. 31, 1999, the Washington Bureau of McClatchy
Newspaper found in reviewing 180 members' latest financial disclosure
statements. The reports showed that 36 members or their families
owned drug stocks - including a number who sit on committees with
jurisdiction over the industry.
Rep. Jim Sensenbrenner of Wisconsin
owned shares worth $2.2 million to $7.1 million in five drug makers.
He is the ranking Republican on a Judiciary subcommittee that often
reviews patent legislation that can deliver windfalls to name-brand
drug companies.
Although Sen. John Kerry, D-Mass.,
sits on the Senate Commerce Committee that likely will have a role
in shaping any Medicare drug package, his wife Teresa, a Heinz family
heiress, owned shares in eight drug companies worth $2.1 million
to $4.2 million.
The year-end pharmaceutical shareholder lists also include Republican
presidential nominee George W. Bush
and his family with $62,000 to $234,000 in drug stocks; his running
mate, Dick Cheney ($150,000
to $350,000), and the wife of Sen. Joe
Lieberman, the Democratic vice presidential nominee ($15,000
to $50,000).
Bush, who is pushing a prescription drug plan that the industry
finds more palatable than the Democratic plan, has since put all
of his stock into a blind trust. Cheney, who is "on leave"
as a director of Procter & Gamble, says he will do the same
if elected and also will relinquish rights to 11,000 options for
P&G stock. Lieberman's spokeswoman says the 1,000 shares his
wife, Hadassah, owned in Pfizer Inc. are hers alone, stemming from
her days as a company employee, and Lieberman is strongly advocating
Gore's government-run Medicare drug plan.
The presidential candidates' aides also are drawing scrutiny. Bush's
senior health care adviser, Gail Wilensky, made headlines recently
because she holds $10.5 million in shares and stock options in health
care companies - interests that the watchdog group Public Citizen
contended could benefit from Bush's approach to Medicare.
Since the 15 percent to 20 percent annual profit gains of the biggest
drug makers have outstripped every other sector in recent years,
it's no surprise that pharmaceutical stocks show up in political
figures' investment portfolios. Some of the companies, such as 3M
and Abbott, are widely diversified. And it violates neither laws
nor congressional ethics rules for a member of Congress to own stock
in any industry.
But some public policy experts and congressional watchdogs say
that owning drug stocks can even be more problematic than taking
the industry's campaign donations.
"Holding shares of such companies ipso facto raises the
appearance of a conflict of interest by members of Congress,"
contended Peter Eisner, managing director of the Center
for Public Integrity (http://www.publicintegrity.org/). "A
member of Congress should be above suspicion of conflicts of interest,
and drug companies are a prime example of an industry in which members
of Congress are courted and lobbied and make decisions that affect
the value of the stock."
It would be "prudent" for legislators weighing prescription
drug policies to put their money in mutual funds invested in an
array of companies "so that they are not making decisions that
are going to directly benefit them," said Frank Clemente, executive
director of Public Citizen's
Congress Watch (http://www.citizen.org/congress/ ).
David King, an associate professor of public policy at Harvard
University's Kennedy School of Government, said he is less bothered
if members of Congress own stocks in drug companies when they have
little influence over legislation affecting the industry. But, he
said, "a member on the House Commerce Committee or the Senate
Finance Committee would be skating on thin ice to hold a lot of
drug stocks right now, because they are the ones who will be debating
and deciding prescription drug benefits."
King said he would advise members of those committees or the House
or Senate judiciary committees either to put their holdings into
a blind trust or "dump the stock and hold something else in
your portfolio ... because it does create the appearance of impropriety
and it may be tempting. You may learn something in the regulatory
process that could help you pick and choose stocks. You open yourself
up to tremendous punishment from political opponents."
McClatchy
Newspapers September 29, 2000
| 