Pence Chief Of Staff Owns Stocks In 23 Companies Involved With WH COVID Response

PMH

He appears to have chosen not to divest his stocks after not receiving a Certificate of Divestiture tax break.

National Public Radio reports that Marc Short, Vice President Mike Pence’s Chief of Staff, owns between $506,043 and $1.64 million in individual stocks from companies involved in the White House’s response to the COVID-19 pandemic. These stock holdings could run afoul of conflict-of-interest laws.

  • Short and his wife hold stock in many medical and pharmaceutical companies. Some have been directly affected by or involved in the work of the Coronavirus Task Force headed by Pence, including 3M, Abbott Labs, Gilead, Procter & Gamble, Medtronic, Bristol Myers Squibb, and Johnson & Johnson.
  • The White House has also publicly praised some companies that are among Short’s holdings—such as CVS, Thermo Fisher Scientific, Walmart, and Roche—for their work in conjunction with the federal government’s COVID-19 response.
  • When he joined Pence’s office last year, Short declared at least some of his stock holdings to be potential conflicts of interest. Devin O’Malley, a spokesperson for Pence, said that Short also applied for a Certificate of Divestiture from the Office of Government Ethics, but did not receive it.
  • National Public Radio explains, “The certificate is not necessary to divest from stocks, but instead approves a tax break that allows the deferment of capital gains tax,” such as might be incurred by selling stocks, “and is designed to reduce the burden of complying with federal ethics laws” for federal employees.
  • In the end, Short did not receive this tax break because he was unable to divest stocks held in trusts for his children over which he had “no independent control,” O’Malley also said. Because he was unable to divest all the stocks that would cause potential conflicts of interest, the Office of Government Ethics rejected his application.
  • However, just because Short did not receive the tax break does not mean that there was no conflict of interest. Don Fox, a former general counsel and acting director for the Office of Government Ethics, explains that in order to apply for the certificate to begin with, an employee must attest they have a potential conflicts of interest that make divestiture necessary.
  • And National Public Radio explains, “Not receiving a Certificate of Divestiture is not a permissible reason under the law to avoid divesting from stock. In fact, regulations require an employee requesting a certificate to commit in advance to divesting, whether or not” the Office grants their request.
  • Section A subsection 3 of “5 CFR § 2634.1005 - How to obtain a Certificate of Divestiture” states that an eligible person must provide a statement that they have “agreed to divest the property” in order to apply for a Certificate.

Walter Shaub, a former director of the Office of Government Ethics who now works with the government watchdog Citizens for Responsibility and Ethics in Washington, called this “a red alarm.” He said,

We have enough information to know that there is a serious possibility of a conflict of interest and a very realistic chance that he may have participated in matters affecting his financial interests. We won't know unless the FBI or the Public Integrity Section for the Justice Department do a proper investigation.

Spokesperson O’Malley defended Short and said,

Marc Short has followed all applicable ethics laws, and even sought to divest from potential financial conflicts. Additionally, on several occasions, including since the formation of the Coronavirus Task Force, Mr. Short has worked with legal counsel to implement appropriate recusals.

  • Watchdogs such as Shaub were not sure that Short could stay on the right side of the ethics laws without divestiture. National Public Radio explains, “in order to comply with the law Short needs to divest or recuse himself from issues that may impact his personal financial holdings.”
  • And National Public Radio observes, “recusal may be difficult due to Short's expansive list of responsibilities as the vice president's chief of staff—and in any case, there is public evidence that he is actively engaged in the Trump administration's Coronavirus response efforts.”
  • And Scott Amey, general counsel of the government watchdog group Project on Government Oversight, observed, “the vice president's chief of staff… is working on the issues, and participating in meetings, and making presentations to the public based on things he's learned through the pandemic [response] and what's coming into the White House.”
  • In television interviews and to reporters, Short has talked publicly about the federal government’s interactions with 3M and Honeywell, two companies he owns stocks in. In one appearance, he said, “We are actually encouraged that the partnership with private sector can meet many of these needs,” and he used Honeywell as a specific example.
  • The Vice President’s office did not provide National Public Radio with specific examples of scenarios in which Short has recused himself.

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