Copyright 2000 Star Tribune
Star Tribune
(Minneapolis, MN)
September 28, 2000, Thursday, Metro Edition
SECTION: NEWS; Pg. 6A
LENGTH: 1386 words
HEADLINE:
Dozens in Congress own millions in drug stocks;
Holdings
are legal, but they trouble some policy experts
BYLINE:
Greg Gordon; Andrew Donohue; Staff Writers
DATELINE:
Washington, D.C.
BODY:
While Minnesota Democrat
Mark Dayton is taking political heat for owning drug stocks and
at the same time attacking drug companies during his Senate
campaign, a host of pharmaceutical investors already occupy seats in Congress.
Dozens of senators, House members and
their families own tens of millions of dollars in stock in pharmaceutical firms
whose profits could rise or fall, depending on what Congress does about soaring
prices of medicine and the push for Medicare drug benefits.
Their stock holdings are legal, but create
appearances that trouble some congressional watchdogs and public policy experts.
A review of the latest financial
disclosure statements from 180 members of Congress _ including congressional
leaders, lawmakers who sit on committees dealing with
prescription-drug legislation and members of Minnesota's
delegation _ showed that 36 members or their families owned
drug stocks.
Wisconsin Rep. James Sensenbrenner,
ranking Republican on a Judiciary subcommittee that reviews
patent legislation involving drug companies,
listed shares worth $2.2 million to $7.1
million in five drugmakers.
Teresa Kerry _
the wife of Sen. John Kerry, D-Mass., and a Heinz family heiress _ listed shares
in eight drug companies worth $2.1 million to
$4.2 million. Her husband sits on the Senate Commerce Committee
that will probably have a role in shaping any Medicare drug
package.
Democratic Rep. Jim Oberstar was
the only Minnesota delegation member to report drug stock
ownership in his family on his financial disclosure statement.
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 Hadassah Lieberman,
wife of Sen. Joseph 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 Gore's, 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 that Hadassah Lieberman owns in
Pfizer Inc. are hers alone and came from her days as a company employee. Joseph
Lieberman is strongly advocating Gore's government-run Medicare
drug plan.
Although it
violates neither laws nor congressional ethics rules for a member of Congress to
own stock in any industry, some public policy experts and congressional
watchdogs say owning stocks in the most profitable industry _ pharmaceuticals _
can be problematic.
"Holding shares of
such companies ipso facto raises the appearance of a conflict of interest by
members of Congress," said Peter Eisner, managing director of the Center for
Public Integrity. "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."
David
King, an associate professor of public policy at Harvard University's Kennedy
School of Government, said he is not so bothered that congressional members own
stocks in drug companies if 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."
.
Who owns what
Sensenbrenner was ranked recently by the
Capitol Hill newspaper Roll Call as the 25th-wealthiest member of Congress with
an estimated net worth of about $10.2 million. His 1999
year-end financial report listed $1 million to
$5 million in Merck & Co. shares; $750,000
to $1.5 million in Monsanto (now Pharmacia); blocks of
$250,000 to $500,000 in both Abbott
Laboratories and Warner Lambert, and $50,000 to
$100,000 in Twin Cities-based 3M.
In his senior position on the intellectual
properties subcommittee of the House Judiciary Committee, he considers
patent extension bills that could result in billions of dollars
in revenues for drugmakers by delaying the marketing of cheaper generic
alternatives.
Sensenbrenner has "looked
very carefully at issues of conflict of interest," his spokeswoman Gina Carty
said. When legislative issues arise on the committee that would "affect his
holdings in either Merck or Abbott Labs, he would recuse himself from dealing
with those issues," she said. She did not mention the other firms in which he
holds stock.
Several members of the Senate
Commerce Committee own drug stocks, topped by Sen. Sam
Brownback, R-Kan., whose wife, Mary, and children own $211,000
to $515,000 in drug stocks. Brownback
spokesman Erik Hotmire said that, while Brownback is aware of their holdings,
the stocks are effectively in a blind trust because "Senator Brownback does not
have any authority as to the purchase or sale of the stocks."
Other Commerce Committee members who own
or have family interests in drug stocks include Sens. Kay
Bailey Hutchison, R-Texas, $130,000 to
$350,000; Bill Frist, R-Tenn., $45,000 to
$150,000; Jay Rockefeller, D-W.Va., $65,000 to
$150,000, and the House committee's ranking Democrat, Rep. John
Dingell, D-Mich., $18,000 to $95,000.
Sen. Max Baucus, D-Mont., a member of the
Senate Finance Committee, had $80,000 to
$201,000 in pharmaceutical stocks, and Sen. John Kyl, R-Ariz.,
a member of the Senate Judiciary Committee, listed $36,436 in
stockholdings in eight drug companies.
Some congressional members, such as Kerry
and Oberstar, say the shares belong solely to their spouses. Oberstar said he
did not know that his wife, Jean, who inherited a consulting business and stock
portfolio when her first husband died, owned shares in Johnson & Johnson
until a reporter inquired. "They're hers; they're not mine," he said.
Still,
during an election year when prescription-drug benefits have
become a major campaign issue, politicians are sensitive to appearances. When
Dayton's ownership of $500,000 to $1 million
in Abbott Laboratories stock became public in August, he ordered his financial
adviser to sell those shares, saying he thought he already had done so. On
Saturday, Dayton said that earlier this month, he also sold
$51,686 worth of stock in another drug
company, Elan Corp. PLC.
.
Greg
Gordon can be contacted at ggordon@mcclatchydc.com
.
Andrew Donohue can be contacted at
intern@mcclatchydc.com
.
.
Prominent investors
.
At a time when prescription
drug benefits have become a major political issue, dozens of
members of Congress held tens of millions of dollars in stock in pharmaceutical
companies as of Dec. 31, 1999. And so did three of the four members of the major
parties' presidential tickets. Democratic presidential candidate Al Gore did not
list any drug stocks on his financial disclosure statement.
.
Republican presidential nominee
George W. Bush
.
(Total holdings:
$62,000-$234,000)
Owned blocks each
worth up to $1,000 in Baxter International, Procter &
Gamble, Schering Plough and Warner Lambert. Trusts for daughters Barbara and
Jenna each had shares worth $1,001-$15,000 in
Procter & Gamble, and $15,001-$50,000 in
both Warner Lambert and Pfizer.
.
GOP vice presidential candidate Dick
Cheney
.
(Total holdings:
$150,000-$350,000)
Owned shares worth
$100,000-$250,000 in Procter & Gamble. As
a P&G director, received stock options worth
$50,000-$100,000.
.
Democratic vice presidential candidate
.
Joseph Lieberman
.
(Total holdings:
$15,000-$50,000)
Wife Hadassah, a
former Pfizer employee, owned 1,000 shares of stock in the Connecticut-based
drug maker valued at
$15,000-$50,000.
.
- Source: Star Tribune research
GRAPHIC: PHOTO
LOAD-DATE: September 28, 2000
