The controversy around HHS nominee Tom Price’s stock portfolio, explained
U.S. Health and Human Services Secretary Nominee Rep. Tom Price Alex Wong | Getty Images

Rep. Tom Price, President-elect Donald Trump's pick for health and human services secretary, spent 12 years in Congress writing legislation on health care issues. And for at least the past four years, he bought and sold more than $300,000 in health care stocks — stocks whose value was affected by the legislation he was working on. Price's stock trades have become the issue that could derail his confirmation hearings. Democrats hammered him on them at his first Senate hearing on Wednesday, trying to get Price to admit he'd traded stock based on insider knowledge in Congress, which would be illegal. He's likely to face more pressure when he goes before the Senate Finance Committee for a confirmation hearing today. Price's trades might not be illegal, but they look bad; ethics experts advise that members of Congress refrain from trading individual stocks and stick to mutual funds while they're in office. More from Vox:

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Price traded stocks while he was a member of Congress

Price appears to have advocated for legislation affecting his financial interest fairly routinely, and he continued to invest in companies his bills would affect rather than sticking to safer, diversified mutual funds.

Similarly, a 2012 law, the STOCK Act, prohibits insider trading among members of Congress, meaning they can't use information not available to the general public that they've learned in the course of their duties to make money buying and selling stock. There's no evidence Price violated that law. But that hasn't stopped a slow drip of anecdotes about his decisions to buy and sell health care stock over the past year while introducing legislation that would affect those companies' bottom lines: In March 2016, according to a CNN investigation, Price bought up to $15,000 worth of stock in Zimmer Biomet, a medical device company that specializes in hip and knee implants. Two days later, he introduced legislation to delay a regulation that would have hurt the company's business by changing how Medicare and Medicaid reimburse those procedures. Zimmer Biomet then donated to his campaign. (Price says he was not aware of the purchase, which was made by his broker.)

Price also bought shares in six pharmaceutical companies a week after a federal regulation was proposed that would lower reimbursements for doctors who prescribe expensive drugs for cancer and arthritis, according to Time magazine. The regulation was meant to help control health care costs by encouraging doctors to prescribe generic drugs and cheaper alternatives instead, and would have hurt pharmaceutical companies' bottom lines. The companies lobbied against the regulation, and Price sponsored legislation to block it. It was never enacted.

Price was able to take advantage of a special deal in another biotech firm, Innate Immunotherapeutics, an Australian company developing a multiple sclerosis drug, according to Kaiser Health News. Price was offered discounted shares for "sophisticated investors" in summer 2016 after making a smaller investment in the company in 2015. (A fellow member of Congress, Rep. Chris Collins, is on the company's board; members of the Collins family own about 20 percent of the company.)

It’s not clear Price broke the law — but it does look shady

Trump's transition team argues that Price's broker at Morgan Stanley bought the stocks and that Price didn't make the decisions personally. He didn't even know he owned the Zimmer Biomet stock for nearly three weeks, and he'd opposed the regulation on reimbursements for hip and knee replacements since long before he bought the stock. But Price also told the Senate Committee on Health, Education, Labor, and Pensions on Wednesday that he made the decision to invest in Innate Immuno, the Australian drug company, himself after a conversation with his House of Representatives colleague Collins. Regardless of who made the decision, there isn't evidence proving that Price broke the law by trading on his insider knowledge. Proposed federal regulations are public, and he bought stock in Zimmer Biomet and pharmaceutical companies during a period when those companies' stock prices had fallen considerably, due in part to concern about high drug prices. He or his broker, whoever made the decision, might have just thought they were good buys. Still, Price did work on legislation that would affect companies he was invested in, and ethics rules for the House of Representatives find that to be dicey at best. The House doesn't have strict rules on income from investments; the House Ethics Manual says those matters are handled through disclosure and the "discipline of the electoral process" — if voters are angry, they can vote you out. But the manual does say that while it's okay for members to vote on legislation affecting corporations of which they're stockholders, being more directly involved — co-sponsoring the bill, for example, or advocating for it — warrants "added circumspection" and a check-in with the House Ethics Committee. Price appears to have advocated for legislation affecting his financial interest fairly routinely, and he continued to invest in companies his bills would affect rather than sticking to safer, diversified mutual funds.

The Trump transition’s ethics problems don’t stop with Price