(Original air date Feb. 12, 2023)
If you’ve followed it on the news, you know members of Congress and judges have gotten dinged in the court of public opinion for having personal financial stakes in companies they have professional influence over. Now the Wall Street Journal’s reporting sleuths have turned their attention to top federal officials. They built an original database of financial disclosures and — as senior reporter James Grimaldi tells me — the resulting analysis raises a lot of questions.
The following is a transcript of a report from “Full Measure with Sharyl Attkisson.” Watch the video by clicking the link at the end of the page.
James Grimaldi: We were surprised by the bottom line, which found one in five federal officials who we looked at were investing in companies that they regulate.
Sharyl: What are they supposed to disclose?
Grimaldi: Well, they’re supposed to disclose all of their assets, what they’re investing in, what companies or mutual funds or ETFs that they were investing in.
Sharyl: I assume the rules might be different depending on the agency, but are these officials prohibited from having interests in companies and matters that they may have to regulate or be involved in?
Grimaldi: No. They’re allowed to invest in the companies up to $15,000 on an actual stock. And if it’s a mutual fund, say, an energy mutual fund, and you work at the Department of Energy or the EPA, you can have up to $50,000. So they’re allowed to invest.
Now, specific agencies, as you point out, may have more rigorous requirements. For example, the Food and Drug Administration requires that you must not invest in companies that they determine are significantly regulated organizations by the FDA. And the FDA is great. They actually have a list that they published that anyone can look at monthly about what comes and goes. Because, you know, you could be Johnson & Johnson and have, you know, things that are not regulated. Or General Electric makes a lot of other things, but also makes medical devices. They have a very complicated formula, but they make it easy for the employees to be able to look.
And we still found an official, a top official at the FDA, who had multiple investments: 70 companies, 170 transactions, just for the years we were following his disclosures.
Sharyl: Who was that?
Grimaldi: That was Malcolm Bertoni. He was the director of the Office of Planning at the FDA. And like a lot of other officials, he would say, “Well, it was an investment of my wife and/or my third-party investor.” But that’s not the rule. The rule says you have to know what you’re investing in, and you’re supposed to avoid it.
There was one official in the Environmental Protection Agency, which was working in an area that was engaged in loosening air pollution rules in the Trump administration… was deeply invested in energy companies. And when we asked about that, like, “Well, what’s going on here?” And he said, “Well, that’s really my husband and my husband’s investment advisor.”
Sharyl: Did that violate any rules?
Grimaldi: I don’t think it violated, per se, the rule because it was under the $15,000 allowance. It just — the timing looked bad.
Sharyl: If somebody has been found to have broken their agency’s rules in the past, what happens to them now?
Grimaldi: Generally nothing. I mean, we look through these reports that go to the Office of Government Ethics, and we couldn’t find any cases in which there was someone who was directly prosecuted for having violated this rule.
Sharyl: You know, I think people are feeling very jaded when they look at their federal servants and agents and maybe those in the courts too, as to whether they really do have to follow the same types of rules you would expect people to fall in private industry.
Grimaldi: Well I do think that public confidence in many of our governmental entities and agencies are really at sort of a historic low. And it really behooves, I think, the federal officials and others to try to be, you know, purer than Caesar’s wife, as they say — above the fray.
And I will add that we did see lots and lots of federal officials who, when they came into government, divested of their individual holdings and went into mutual funds and ETFs. So there are a lot of good people in government who are trying to do the right thing, but like in any barrel of apples, you’re going to find some that aren’t. And there’s one in five owning stock in a company in which they’re overseeing or regulating is concerning.
Sharyl (on-camera): Grimaldi says there have been proposals in Congress to toughen the rules for federal officials, judges, and members of Congress themselves.
Watch story here.
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