How Whitehouse Serves Rhode Islanders

WPRI uncovered a 2009 speech made by Republican Senate Candidate Barry Hinckley in which he told the audience that running for political office will also garner “tons of free PR” for your business. In reaction, Tony Simon, the campaign manager for Hinckley’s opponent, Senator Sheldon Whitehouse sought to make a distinction between his boss and Hinckley, telling WPRI, “Sheldon has always seen public office as a way to serve Rhode Islanders…That’s the only motivation he’s ever needed.”
Indeed. Remember that news from last fall about Senator Whitehouse and his incredibly fortuitous trading record? It was explained in Throw Them All Out by Peter Schweizer.

In May 2007, a government agency called the Federal Center for Medicare and Medicaid Services was looking at two drugs that were used to treat anemia in cancer patients. The agency had to decide: Did Johnson & Johnson’s Procrit and Amgen’s Aranesp warrant reimbursement under Medicare? Johnson & Johnson was a large, diversified company with lots of products, so rejection of its drug would not be critical. But for Amgen, losing Medicare reimbursement would be a disaster. The drug was commonly given to elderly cancer patients, many of whom could afford it only under Medicare.
Indeed, when the word went out that the government might end the reimbursements, Amgen shares plunged…. But at least one investor avoided those losses with two nearly perfectly timed trades. On May 4, the [Senator John Kerry & his wife] sold between $250,000 and $500,000 in Amgen stock. Three days later, they sold the balance of their stock in the company, another $250,000 to $500,000, when it closed at $63.76 per share. If they had waited two weeks, these sales would have been worth between $50,000 and $100,000 less, because on May 15 it was publicly announced that Medicare would sharply limit reimbursements for treatment with Aranesp. The price dropped to $54.01, or down 15%.
Joining Senator Kerry in dumping Amgen shares just in time were two senators who sat on the Health, Education, Labor, and Pensions Committee, which did not have direct oversight of Medicare but was involved in health and pharmaceutical policies in general. Senators Johnny Isakson and Sheldon Whitehouse both sold between $15,000 and $50,000 worth of Amgen stock on the same day, May 9, also avoiding large losses. Did Senator Kerry know the news was coming? Did Senators Isakson and Whitehouse know anything? We cannot be sure. If they had worked in the private sector, their access and timing would almost certainly have demanded an SEC investigation. Short of sworn testimony, we cannot rule out that they simply guessed right, or were lucky. Even in the private sector, they might not be proven guilty. But the timing seems far too good to be true. {p.13,15 Throw Them All Out }

Amgen has a considerable presence in Rhode Island and employs many Rhode Islanders. One wonders if, given any information he may or may not have had concerning the pending FDA ruling, how strenuously Senator Whitehouse championed approval for Amgen’s drug, since so many Rhode Islanders would have been better served if it was approved. Well, at least he was lucky enough to divest himself of the sinking shares of a Rhode Island business (and–presumably–turn a profit, too).
He was also pretty lucky in 2008. You remember that time, when the financial services market died?

On Tuesday, September 16, 2008, when Henry Paulson and Fed Chairman Ben Bernanke held another of their terrifying closed-door meetings with congressional leaders…the stock market had dipped only a few percentage points, and most people assumed that the financial crisis was a disruption that would have just a limited effect on the broader economy. But what Paulson and Bernanke told lawmakers on September 16 made it clear that the public’s perception was wrong. Paulson, in his memoir, explains that during the meeting he outlined that the federal government was going to bail out the insurance giant AIG and that the markets were in deep trouble. “There was an almost surreal quality to the meeting,” he recounts. “The stunned lawmakers looked at us as if not quite believing what they were hearing.”
The next day, Congressman Jim Moran, Democrat of Virginina, a member of the Appropriations Committee, dumped his shares in ninety different companies….Moran was just one of many. At least ten U.S. senators, including John Kerry, Sheldon Whitehouse, and Dick Durbin, traded stock or mutual funds related to the financial industry the following day. {p.32-33, Throw Them All Out }

As the Providence Journal reported:

Over nine days in September 2008, Sen. Sheldon Whitehouse reported stock sales totaling as much as $1.15 million in an apparent effort to shield his investments from what soon proved a historic decline in the financial markets….Whitehouse says he does not remember the transactions because “I virtually never have a conversation” with the financial adviser who made trades on his behalf. In an interview with The Providence Journal’s John E. Mulligan, he called Schweizer’s premise “completely bogus,” adding: “I did not trade on any insider information.”

See, he was just lucky. Twice (at least). Nonetheless, he’s technically correct. As a Rhode Islander, Senator Whitehouse has surely served himself well.

0 0 votes
Article Rating
Notify of
Newest Most Voted
Inline Feedbacks
View all comments
10 years ago

The facts are irrelevant here. Whitehouse is a member of the progressive clergy and as such receives indulgences for all of his sins, his affluent lifestyle, and his hypocritical abuses of the public trust through insider trading.

10 years ago

“his incredibly fortuitous trading record”
Heh. Yes, let’s remember the record of the senator’s official AND unofficial activity in the Senate.

10 years ago

… as for Hinckley’s 2009 comment, it’s difficult to (excuse the touchy-feely expression) look into his heart and discern his motive for running, either at the start of the campaign or now.
Two things are pretty clear, however:
> A year and a half of the sometimes unfun, usually hard work of running for federal office is not an easy way to get publicity.
> More importantly, running for office as a REPUBLICAN in a heavily Democrat state is probably not the kind of business-promoting or career-advancing publicity that any p.r. professional would advise a client to seek.

10 years ago

“Breaking News!”
“Outhouse has always seen public office as a way to serve himself by screwing Rhode Islanders and the taxpayer…That’s the only motivation he’s ever needed.”
Ah yes the clarification we were waiting for.

joe bernstein
joe bernstein
10 years ago

Whitehouse allegedly said he was “bred”to govern according to Buddy Cianci.I wonder how many first cousin marriages it took to produce this crosseyed lisping fop?

Show your support for Anchor Rising with a 25-cent-per-day subscription.