Politics

Senate Dem Accusing Trump Pick of Ethics Violations Benefited From Bank Bailouts

Schumer raised huge sums from bailout of banks that held his personal funds

Chuck Schumer
Chuck Schumer / AP

The top Senate Democrat calling for an ethics investigation into a Trump cabinet pick has raised money from bailed-out banks that held tens of thousands of dollars of his personal wealth, according to public records.

Senate Minority Leader Chuck Schumer renewed his push this week for an investigation into stock trades by Rep. Tom Price (R., Ga.) ahead of his confirmation hearing Wednesday regarding his nomination to head the Department of Health and Human Services.

Schumer and Senate Democrats accused Price last week of violating insider trading laws after a CNN report surfaced citing House records that detailed the Trump nominee trading stock in a healthcare firm while simultaneously pursuing legislation that could benefit the company.

"This new report makes clear that this isn't just a couple of questionable trades, but rather a clear and troubling pattern of congressman Price trading stock and using his office to benefit the companies in which he is investing," Schumer said in a statement Tuesday.

As the Washington Free Beacon reported last week, Democrats are concerned with potential conflicts of interests stemming from 40 trades in health industry companies worth more than $300,000. Schumer and ranking Democrats on the Health and Finance Committees have called on the Government Ethics Office to halt Price’s nomination until the completion of an investigation into his stock trades.

The Trump transition team has brushed aside the complaint as hypocritical.

Congressional records show that Schumer, who has relied extensively on Wall Street fundraising, held investments in banks that were bailed out during the 2008 financial crisis under the Troubled Asset Relief Program (TARP) while he served on the Finance and Banking Committees that were tasked with overseeing the $700 billion rescue package.

Financial disclosures from 2008 show Schumer held assets valued between $15,001 and $50,000 in Morgan Stanley and $1,001 to $15,000 in Citibank. Though Schumer’s assets in the banks constituted savings not stock, the two companies were granted billions of dollars under TARP. The federal program doled out $10 billion to Morgan Stanley and another $25 billion to Citibank.

While finalizing the details of TARP in Sept. 2008, Schumer attended a breakfast fundraiser in Manhattan to meet with about 20 banking executives. Though Schumer warned a bank bailout would be difficult to pass through Congress, he left an impression on executives that Democrats would stand by Wall Street.

Schumer a week later received more than $135,000 in donations from executives whose firms were represented at the breakfast.

Additionally, as the Free Beacon reported last week, Schumer also owned securities that likely benefitted from policies he advocated while serving in an official capacity.

While pursuing a federal takeover of mortgage insurers Fannie Mae and Freddie Mac in 2008, Schumer held thousands of dollars in bonds with the companies. The minority leader had purchased the bonds in 2002, arguing a year later against heightened regulations against the firms.

Just a few months after the Treasury Department announced it would place the enterprises into conservatorship in 2008, Schumer redeemed between $15,000 and $50,000 in Fannie Mae bonds. The next year, he redeemed between $31,000 and $115,000 in Freddie Mac bonds.

Schumer spokesman Matt House told the Free Beacon in an email that the senator's holdings in the banks, constituting certificates of deposit and savings backed by the FDIC, were incomparable to charges that Price engaged in insider trading.

"If Rep. Price had put his money in savings accounts and CDs, instead of making speculative, health care stock trades, we wouldn't be having this discussion," House said.

Update 4:43 P.M.: This post has been updated to reflect comment from a Schumer spokesman.