Government

Pence Aide Owns Stock In Pandemic Response Companies Because CONFLICT OF INTEREST, HOW DOES IT GO?

Rules are for the little people.

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Is it ethical to oversee government deals with companies you own stock in? How about going on television to tout the amazing work being done by a business in which you own hundreds of thousands of dollars worth of shares? Asking for Mike Pence’s Chief of Staff Marc Short, who apparently owns up to $1.64 million worth of individual stocks in companies which play a critical role in the nation’s pandemic response.

Companies like Honeywell, which Short talked up on March 20 for its production of N95 respirator masks. NPR reports that Short owns between $50,000 and $100,000 of Honeywell stock.

Or 3M, in which he owns shares valued at up to $150,000. Short discussed the company on a March 18 appearance with Fox News’s Lou Dobbs. In the same interview, Short, who owns between $2,000 and $30,000 of shares in Gilead, the maker of Remdisivir, talked up exciting new developments in therapeutics.

He also holds between $15,000 and $50,000 in Abbott Labs, producer of the COVID test touted as a gamechanger by the president, although it was later found to have a 48 percent false negative rate.

In fact, Short owns stock in quite a few companies that are working with the Trump Administration to coordinate the pandemic response (such as it is), including  Procter & Gamble, Medtronic, Bristol Myers Squibb, Johnson & Johnson, CVS, Thermo Fisher Scientific, Walmart, and Roche.

Can you guess who’s running the White House’s coronavirus task force?

Surprise, it’s Marc Short!

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“Marc Short has followed all applicable ethics laws, and even sought to divest from potential financial conflicts,” Pence spokesman Devin O’Malley insisted to NPR. Which is at least partly true.

Short did seek a Certificate of Divestiture from the Office of Government Ethics which would have allowed him to defer capital gains tax on the sale of assets sold to comply with conflict of interest laws. The Certificate doesn’t waive the conflict — it simply makes it less expensive for government employees to sell it and get into compliance. In fact, application for such a Certificate is tacit admission that such a conflict exists, and applicants must agree to sell the conflicted assets regardless of whether a Certificate is granted.

“Seeking a Certificate of Divestiture is not seeking approval. It’s seeking a tax break,” former Office of Government Ethics head Walter Shaub told NPR. “The non-issuance of a certificate of divestiture does not prevent you from divesting. It prevents you from getting a tax break.”

In fact, Short found his application was denied. (Unlike Jared Kushner, who was able to get a Certificate to defer gains on upwards of $50 million worth of his brother’s real estate tech company. In two tranches, three years apart. Lucky fella!)

“OGE would not grant a certificate of divestiture covering individual equities because, after such a divestment, the stocks held in irrevocable generation-skipping trusts — established for the benefit of his children over which Mr. Short has no independent control — would remain,” O’Malley explained. Which seems … rather carefully worded. Lack of “independent control” could well cover a scenario in which Short and his lawyer are co-trustees over the conflicted assets held for the benefit of his children.

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But the particulars don’t really matter, because the law is clear that Short cannot “participate[] personally and substantially as a Government officer or employee, through decision, approval, disapproval, recommendation, the rendering of advice, investigation, or otherwise, in a judicial or other proceeding, application, request for a ruling or other determination, contract, claim, controversy, charge, accusation, arrest, or other particular matter in which, to his knowledge, he, his spouse, minor child, general partner, organization in which he is serving as officer, director, trustee, general partner or employee, or any person or organization with whom he is negotiating or has any arrangement concerning prospective employment, has a financial interest.” (Emphasis added.)

The fact that Short couldn’t get advantageous tax treatment to divest from his conflicts, or that he “worked with legal counsel to implement appropriate recusals,” according to O’Malley is entirely irrelevant. If he didn’t want to sell the stocks to get clear of the conflict, he didn’t have to take the job.

Naturally, Mr. Short will be eager to cooperate with congressional oversight efforts, and Attorney General Barr will immediately open an inquiry into this apparent conflict of interest and possible violation of federal law by a high-ranking administration official.

HAHAHAHAHAHA.

Pence Chief Of Staff Owns Stocks That Could Conflict With Coronavirus Response [NPR]

Elizabeth Dye (@5DollarFeminist) lives in Baltimore where she writes about law and politics.

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