Published on
The Washington Post

Lawmakers Reveal Health-Care Investments

Key Players Have Stakes in Industry

Paul Kane

Almost 30 key lawmakers helping draft landmark health-care legislation
have financial holdings in the industry, totaling nearly $11 million
worth of personal investments in a sector that could be dramatically
reshaped by this summer's debate.

The list of members who have personal investments in the
corporations that will be affected by the legislation -- which
President Obama has called this year's highest domestic priority --
includes Congress's most powerful leaders and a bipartisan collection
of lawmakers in key committee posts. Their total health-care holdings
could be worth $27 million, because congressional financial disclosure
forms released yesterday require reporting of only broad ranges of
holdings rather than precise values of assets.

Senate Majority Leader Harry M. Reid (D-Nev.), for instance, has at least $50,000 invested in a health-care index, and Sen. Judd Gregg
(R-N.H.), a senior member of the health committee, has between $254,000
and $560,000 worth of stock holdings in major health-care companies,
including Bristol-Myers Squibb and Merck.

The family of Rep. Jane Harman
(D-Calif.), a senior member of the House Energy and Commerce Committee
drafting that chamber's legislation, held at least $3.2 million in more
than 20 health-care companies at the end of last year.

The reports come on the eve of what is sure to be a dramatic
health-care debate in Congress, beginning with a key Senate committee
hearing Tuesday. With several proposals floating on Capitol Hill, the
legislative battle could overhaul an industry that represents nearly 20
percent of the national economy.

While no congressional rules bar members from holding financial
stakes in industries they regulate, some ethics experts suggest that it
often creates the appearance of a conflict of interest, particularly if
there is a chance that the legislation could result in a personal
financial boost.

"If someone is going to be substantially enriched by the
consequences of the vote, particularly if it represents a meaningful
amount of their net worth, then there is a problem," said Harlan
Krumholz, a professor of medicine at Yale University. "This is such
important legislation that you don't want to be tainted by any

But many legal experts say the health-care industry is so
predominant that it is impossible for lawmakers to avoid financial ties
to that sector, suggesting that the best antidote is a clear disclosure
system that makes every lawmaker's finances publicly available. Robert
L. Walker, a Washington lawyer and former House and Senate ethics
counsel, said that in many cases, members of Congress are "simply one
of perhaps thousands or more" investors in a single corporation and
such investments are not "prohibitive conflicts."

In many cases, the lawmakers' health-care holdings represent a small
fraction of their assets. Harman, whose husband, Sidney, is the founder
of electronics-maker Harman International Industries, is one of the
wealthiest members of Congress, with a minimum net worth of almost $120

The new data come from yesterday's release of financial disclosure
forms for the House and Senate, though most of the House forms were
accidentally posted online Wednesday, and subsequently the data were
captured and posted online by congressional watchdog LegiStorm.

The first big congressional moment on health care comes Tuesday in
the Senate's Health, Education, Labor, and Pensions Committee, which
will consider a liberal-leaning proposal that includes the creation of
a "public plan" meant to be a government-administered alternative to
private health insurance.

On that 22-member panel, at least eight senators have financial
interests in the health-care industry worth a minimum of $600,000 --
and potentially worth as much as $1.9 million. The investors include Sen. Johnny Isakson
(R-Ga.), a senior member of the panel, who holds at least $165,000 in
pharmaceutical and medical stocks, and freshman Sen. Kay Hagan
(D-N.C.), who holds at least $180,000 in investments in more than 20
health-care companies.

The hearings will be led by Sen. Christopher J. Dodd (D-Conn.), who is filling in for Sen. Edward M. Kennedy
(D-Mass.), the committee chairman, who is battling brain cancer. Dodd's
wife, Jackie Clegg Dodd, serves on the boards of four health-care
companies, receiving more than $200,000 in salary and stock from her
service in 2008, according to the Associated Press.

Dodd's aides say his wife's financial interest will not have any
impact on his leading role in the health-care debate, noting that she
is not a lobbyist and has never represented clients before any branch
of the federal government.

"Jackie Clegg Dodd's career is her own; absolutely independent of
Senator Dodd, as it was when they married 10 years ago," Bryan
DeAngelis, Dodd's spokesman, said in a statement. "The senator has
worked to reform our health care system for decades, and nothing about
his wife's career is relevant at all to his leadership of that effort."

Reid's aides also said he could be a fair arbiter of the legislative
debate, pointing to a letter enclosed in his disclosure from his
investment manager at Wells Fargo declaring that neither the senator
nor his wife has any role in choosing financial moves. "All decisions
on purchases, sales and retention of assets in the above mentioned
investment management accounts . . . were made in the sole discretion
of Wells Fargo Bank, N.A., without input from Harry and Landra Reid,"
the letter said.

Later this month the Senate Finance Committee will take up the
debate, with at least a half-dozen senators on the panel holding stakes
in health-care companies. Sen. John F. Kerry
(D-Mass.) and his wife, ketchup heiress Teresa Heinz Kerry, hold at
least $5.2 million in companies such as Merck and Eli Lilly.

Sen. Michael D. Crapo
(R-Idaho), one of the few lawmakers who listed the specific values of
his stock holdings, held $16,879 worth of stock in companies such as
St. Jude Medical at the end of last year.

Health care is not the only industry that is both heavily regulated
by Congress and heavily invested in by lawmakers. As The Washington
Post reported Thursday, more than 20 members of the House leadership
and the House Financial Services Committee hold investments in
companies that received more than $200 billion in federal bailouts.

On the Senate banking committee, at least a half-dozen senators had
significant investments in companies that benefited from the $700
billion bailout legislation that the panel helped draft last fall. Sen. Charles E. Schumer
(D-N.Y.) reported $18,000 to $95,000 in investments in Freddie Mac and
Fannie Mae bonds, and also that he sold at least $15,000 in Fannie
"step-up" bonds at the end of last year. The committee's ranking
Republican, Sen. Richard C. Shelby
(Miss.), reported holding $260,000 to $850,000 in money market and
retirement accounts with Countrywide, Citigroup and Wachovia.

Staff writers Dan Eggen, Garance Franke-Ruta, Carol D. Leonnig,
Sarah Lovenheim and Ben Pershing, along with research editor Alice
Crites, staff researcher Madonna Lebling and graphics editor Karen
Yourish, contributed to this report.

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