Monday, June 15, 2009


According to the WSJ and WaPo, a number of key Congressfolk have very significant investments in medical industry stocks, including pharma. Note that these are personal/family investments or employment, not campaign contributions. Here is some of the list:

Harry Reid, Senate majority leader: At least $50,000 invested in a major health-care index.

Sen. Judd Gregg (R-N.H.): Between $254,000 and $560,000 of stock holdings in major health companies, including Bristol-Myers Squibb and Merck.

Rep. Jane Harman (D-Calif.): Her family held at least $3.2 million in more than 20 health-care companies at the end of last year.

Sen. Johnny Isakson (R-Ga.): At least $165,000 in drug and medical stocks.

Sen. Kay Hagan (D-N.C.): At least $180,000 in investments in more than 20 health-care companies.

Sen. Christopher J. Dodd (D-Conn.): His wife serves on the boards of four health companies, receiving more than $200,000 in salary and stock for 2008. (WaPo cited the Associated Press on that fact.)

Sen. John Kerry (D-Mass.): Along with his wife, he holds at least $5.2 million in companies including Merck and Eli Lilly.

Sen. Michael Crapo (R-Idaho): $16,879 worth of stock in companies including St. Jude Medical.

What say you? If Chief Justice Roberts recused himself for owning $10K of Pfizer, should, for example, should the Kerry's either sell the stock or should Kerry recuse himself for owning "at least $5.2 mil" of Merck and Lilly? What about COIs on FDA Advisory Committees?

Or do we assume that pols, exactly because they are pols, inherently have "conflicts of interests" (their own and those of constituents) which means that "objectivity" has a far lower threshold, if it has any at all?


  1. Come on Justice - you don't have a controled sample. Policians are rich. Rich people are shifting thier wealth into health care funds. Over the last 2 years, the S&P500 has lost about 55% of its value. Over the same period, the Dow Jones Healthcare Index has lost only 35% of its value. It's the only segment of the economy that continues to grow amid this recession. Frankly, they would be stupid NOT to shift money into healthcare.

    To really do the analysis you want, you have to know what the percentage of wealth that politicians have tied up in healthcare vrs other segments of the economy. Then you'll have to see if other wealthy (non-policical) people of similar wealth have disporportionally less money in healthcare than do politicians.

    Then, after doing that analysis, you have to ask yourself: What SHOULD they do with all thier wealth? Any investment of significant money will create a conflict of interest. Are they supposed to recuse themselves on votes involving investment banks because they have so much money tied up in banks? Should you require politicians to have thier wealth managed by an independent advisory board?

    We already have trouble attracting smart people into government jobs. If you create the restrictions that you sometimes seem to want, the only people left to fill government positions would be middle class voters with a 2-year college degree! I think I'd rather trust my fate with the existing crop of sleezeballs....

  2. Hi Nathan,

    Good to "see" you.

    If you reread my post, you'll see that nothing suggested politicans "recuse" themselves. I was only raising questions; in particular, how to understand the potential role of significant investments. The Kerry-Heinz fortune is immense, but more than 5 mil is probably not a drop in the pickle barrel.

    I still do think that the relationship between voting records and personal investments (as opposed to campaign contributions) is probably under discussed. I would love to see the analysis you suggest--how pols are invested in general.

    Re: smart people in gov. jobs (does the usual law degree suggest smarts?), my personal fortune would be low middle class and I have a Ph.D.. So big moolah and big education need not go together.

    If called, I will serve.

  3. Justice writes: "The Kerry-Heinz fortune is immense, but more than 5 mil is probably not a drop in the pickle barrel."
    The combined assetts of Kerry-Heinz is estimated to be $165-$626 million. The investments you describe therefore account for somewhere between 1% and 3% of thier net worth. That's a drop in the pickle barrel as far as I'm concerned. Hardly worth recusing himself. (as you mention in the 2nd to last paragraph in your post)

    This issue has come up so much (in contexts other than just pharma) that I wish congress would somehow "define" what amount (or percentage) of money should constitute a COI. Numbers can be spun in many ways. $5 million sounds like a lot to you and me, but in the context of the uber-wealthy, I would not consider it a COI.

  4. PS. I fully agree that education and money don't go hand in hand - that's true even in Pharma. I also have a PhD and I struggle to pay for my 1600 sq ft house in an "average" suburb of NYC. But to make up for our meager compensation, I think we should start addressing each other as "Dr. Justice" and "Dr. Nathan" to make ourselves feel better!

  5. Nathan, concerning your 9:23 comments -
    I don't know, sometime the super rich are even more tight fisted and fastidious about their pennies than those with less money. Lots of times that’s how they became rich. Therefore if they lack scruples, have an appetite for money, and are in a position of power, guess who gets the short end of the stick?

    Give me the less educated, less greedy, glad to serve you, person in power any day.

    I think this is a terrible problem. I don’t know how to fix it but if you put strict limits on COI amounts and then a number of Congress people quite, I would say, don’t let the door hit you in your billfold.

  6. What would be the harm in requiring politicians, or any government person in a decision making position or in a position of influence, to sell all stocks before taking office? Also, it doesn’t seem kosher that close family members would hold positions of influence on advisory committees.

  7. Dr. Nathan--I like that.

    Blondie--I assume (perhaps naively) that there are _some_ regulations in place re: potential self-dealing in Congress, but I have no idea what they are. Presidents have to put their stuff in a "blind trust," of some kind, right?

    Would be interesting to see their response when they finally got to open the envelope after X years in office.....

  8. Re: Dr. Nathan's first post....

    Yeah, again I'm wondering if there are even disclosure requirements for Congresspeople as there are for Presidential candidates, etc.. However potential COI is defined, it would seem reasonable to have investment info transparent for those in public office.

    Does anyone know if there are such?

  9. I am in agreement that congress has to ensure that our representatives are more forthcoming with possible disclosure for COI. In staying on topic, it does seem that Congress is trying to sort itself out and provide stricter guidelines. Here is the link for anyone wanting to check up on any particular Congressperson's financial disclosure:

    Here is a link to an interesting article on the subject matter:


Note - Due to a time out issue with Blogger, you may receive a message that requires you to resend your comment. This will not affect its contents.