We have a new scandal to address. No one will be surprised. This is the new current reality of living in the land of the free and the home of the brave.
It seems that hundreds of Department of Health and Human Services employees had access to information about a Medicare decision, at least 436 employees to be exact, that could have been very useful in advance of a huge trading spike which was the result of the announcement.
The Washington Post is breaking this story today:
Hundreds of federal employees were given advance word of a Medicare decision worth billions of dollars to private insurers in the weeks before the official announcement, a period when trading in the shares of those firms spiked. The surge of trading in Humana‘s and other private health insurers’ stock before the April 1 announcement already has prompted the Justice Department and the Securities and Exchange Commission to investigate whether Wall Street investors had advance access to inside information about the then-confidential Medicare funding plan.
Sen. Charles E. Grassley (R-Iowa) told The Washington Post late last week that his office reviewed the e-mail records of employees at the Department of Health and Human Services and found that 436 of them had early access to the Medicare decision as much as two weeks before it was made public. The number of federal employees with advance knowledge is surely higher; the figures Grassley’s staff compiled did not include people at the White House’s Office of Management and Budget who also saw the information. The e-mail records of those employees have not been made available to Grassley. The discovery that sensitive information was so widely disseminated could complicate the forensic task for investigators trying to determine who may have leaked confidential information, and it brings further attention to the government’s handling of policy details valued by Wall Street traders. “This should sound an alarm,” Grassley said. “It should result in better controls to avoid unfair access to information that the average investor could never tap.”
It is important to note that being in early receipt of the information does not make one a criminal. It’s how the information is used. But if out of 436 government employees, and their associates, you don’t think at least 1 person used this information for personal gain then you simply have not been paying attention.
I’d be surprised if there were not several people who used this for personal gain, at least to the extent that they bought a few extra shares of Humana or Aetna. Even a small purchase of shares based on insider information is unethical. 10 shares may not get you prosecuted but that does not discount the fact that it is wrong and still illegal.
This just in… our government tends to be a little on the corrupt side and it’s not just Obama. As long as there are carrots to be dangled you will always find rabbits. This is one of the sins of big government. It’s just too many hands in the cookie jar at all times and it does not work.