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Possible conflicts of interest in pandemic work for Pence Staffer Marc Short: NPR

Marc Short, Chief of Staff for Vice President Mike Pence, listens during a coronavirus review with the health insurance company at the White House on March 10.

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Al Drago / Bloomberg via Getty Images

Marc Short, Chief of Staff for Vice President Mike Pence, listens during a coronavirus review with the health insurance company at the White House on March 10.

Al Drago / Bloomberg via Getty Images

Marc Short, Chief of Staff to Vice President Mike Pence, owns between $ 506,043 and $ 1.64 million in individual shares in companies that perform work related to the Trump administration’s pandemic response – holdings that could lead to conflict of laws laws.

Many of the medical, pharmaceutical and manufacturing companies in which Short and his wife hold shares – including 3M, Abbott Labs, Gilead, Procter & Gamble, Medtronic, Bristol Myers Squibb and Johnson & Johnson – have been directly affected by or involved in work in the Coronavirus Task Force, chairman of Pence.

Other companies among his holdings, such as CVS, Thermo Fisher Scientific, Walmart and Roche, have been publicly proclaimed by the White House for their work with the federal government on Coronavirus responses.

Short declared at least some of his stock holdings – more than 100 listings of individual stocks in a variety of economic sectors – to be potential conflicts of interest after joining the vice president’s office last year. But he did not divest these holdings after being denied a tax cut, often granted to state officials who must sell shares to comply with ethical laws.

Short still has the shares – some in the confidence of family members – which he revealed in public records reviewed by NPR. The White House claims that he has followed the administration’s guidelines to avoid conflicts of interest.

“Marc Short has followed all applicable ethical laws and even tried to refrain from potential economic conflicts,” said Pence spokesman Devin O’Malley. “In addition, Mr. Short has on several occasions, including since the formation of the Coronavirus Task Force, worked with legal counsel to make appropriate recalls.”

Ethical watchdogs – including the former top attorney for the Office of Government Ethics, which manages conflicts of interest – say that in order to comply with the law, Short must divest or withdraw from issues that could affect his personal financial holdings.

There is a law that requires employees of executive branches to resolve conflicts of interest before participating in any decision – or even deliberation – that affects certain companies or specific industries in which they are invested. Violations have potential civil and criminal penalties. The law covers the ownership of spouses and minor children.

It is unclear at this time whether Short has participated in any government policy decisions that may affect the companies or sectors in which he has personal financial interests.

But withdrawal can be difficult because of Shorts’ expansive list of responsibilities as vice president of chiefs – and in any case, there is public evidence that he is actively involved in the Trump administration’s Coronavirus response efforts.

Short is a longtime political operative who has served as Pence Chief of Staff since March 2019. He has also taken on a public role in Coronavirus Task Force operations. And on at least two recent occasions, his work has led him to mention companies in which he holds shares.

On March 18, he mentioned the vice president’s trip to a 3M manufacturing facility to illustrate a point about liability protection. Data shows he holds between $ 65,002 and $ 150,000 in 3M stocks. On March 20, he publicly praised Honeywell’s work in producing respiratory masks. According to public records, he has between $ 50,001 and $ 100,000 in Honeywell stock.

Former Director of Office of Government Ethics, Walter Shaub, said he thinks an independent investigation should be launched. Since leaving OGE in July 2017, Shaub has become a frequent critic of the Trump administration on ethical issues.

“This is now a red alarm. 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 issues affecting his financial interests,” said Shaub, now with the government watchdog Citizens for Responsibility and Ethics in Washington, or CREW. “We do not know whether the FBI or the Department of Public Integrity for the Justice Department is conducting a proper investigation.”

According to disclosure forms first obtained by CREW and then verified and reviewed by NPR, Short owns between $ 506,043 and $ 1.64 million in stock in companies specifically identified or otherwise involved in the federal government’s Coronavirus response. Public information forms do not show exact values ​​of shareholdings, only areas.

O’Malley, spokesman for the vice president’s office, said Short sought what is known as a certificate of divestment from the Office of Government Ethics. The certificate is not necessary to divest from shares, but instead approves a tax break that allows the capital gains tax to be deferred and is designed to reduce the burden of complying with federal ethics laws.

In fact, applying for a divestment certificate is a recognition of the likelihood of potential conflicts of interest. To apply for the certificate, federal employees must certify that they have potential conflicts of interest that make it necessary to divest, according to Don Fox, a former attorney general and acting director of the Office of Government Ethics.

“There must be an underlying conflict of interest, and OGE must establish that there is, to even qualify for a certificate,” Fox said. This is done so that senior executives cannot take advantage of the tax committee if it is not necessary for ethical purposes.

O’Malley said that in the end, Short’s certificate was not approved.

Not obtaining a certificate of disposal is not a permissible reason under the law to avoid disposal of stock. In fact, regulations require that an employee requesting a certificate commit in advance to divest, regardless of whether OGE grants the request or not.

“Seeking a divestment certificate does not seek approval. It is seeking a tax relief,” Shaub said. “Not issuing a divestment certificate does not prevent you from divesting it. It prevents you from getting a tax credit.”

Although Short’s application for a divestment certificate was rejected, it was not because he was not considered to have a conflict.

The Ethics Office rejected his application because some of his shares are held in trusts that would be difficult to forgo. Some of Short’s holdings were in funds created to benefit family members, and OGE would not grant Short relief for Short unless all potentially conflicting holdings were divested.

“OGE would not grant a divestiture certificate covering individual shares because after such divestment, holdings held in irrevocable generational jumping funds – established for the benefit of his children that Mr. Short has no independent control – will remain,” Sa O’Malley said.

The Vice President’s Office did not make a statement as to why Short has not divested potentially conflicting shares outside the trust. Without a divestiture certificate, Short would not be entitled to postpone capital gains taxes on the sale of its shares and would be forced to pay those taxes.

Former ethical officials say that difficulties in divesting do not excuse an employee from complying with the conflict of interest law.

“In the end, it is the public official’s responsibility to take all necessary steps to ensure that they are either free of potential conflicts of interest or to stay away from issues that may conflict with personal financial interests,” Fox said.

The Office of Government Ethics declined to comment on Short’s situation.

“OGE is committed to transparency and citizens’ oversight of the government. However, OGE does not answer questions about specific individuals,” said spokesman Patrick Shepherd.

Both Shorts’ predecessors as Deputy Chief of Staff Mike Pence – Nick Ayers and Joshua Pitcock – have applied for and received a divestment certificate. Unlike Short, neither Ayers nor Pitcock appear to have had a significant number of individual shares during their time at that office, according to their public records. Short has dozens of different individual stocks in a variety of sectors.

Other high-ranking officials have sold their shareholdings despite very complicated financial situations. Former Secretary of State Rex Tillerson pledged before taking office to divest from 156 companies he had a financial interest in. In an ethics agreement hammered out before the Trump administration began, Tillerson gave up more than $ 4.1 million in cash bonuses and retirement medical and dental care .

Fox said selling individual shares is often the only way for state officials like Short to resolve potential conflicts. Recalling from potential conflicts of interest is often difficult in a position such as Short as his responsibilities as a member of the White House’s senior staff would be diverse and affect a wide range of topics and sectors.

“It’s not uncommon for someone in these positions to essentially sell off all the common stocks … because you really can’t predict what kind of information or what kind of decisions their principals – their executives – will have to make,” Fox said. “If you will be in this type of job, you must be able to act on something without having to worry about conflicts of interest or readmissions or solutions.”

The Vice President’s office would not point to any specific cases of recall.

Short is the highest staffing of the Vice President, who has been the head of the Coronavirus task force since the end of February. Short has repeatedly been involved in the White House’s response to the Coronavirus crisis.

Earlier, Short set the agenda and sent out the seating chart for the situation for Coronavirus Task Force meetings, according to an April 11 story by The Washington Post. “We meet every morning at nine,” he told CNBC in March, regarding the Coronavirus Task Force.

He answered questions from reporters about Coronavirus on February 4 and March 20. In the latter case, he cited the work in Honeywell, where he has between $ 50.00 and $ 100,000 in stock.

“We are actually encouraged that the private sector partnership can meet many of these needs,” he said, referring to the logistics to access health care. “As some of you know, Honeywell is completely retrofitted to one of their factories to produce more respiratory masks.”

At Fox Business on March 18, he quoted 3M, a company where he owns between $ 65,002 and $ 150,000 in stock. “A few weeks ago, the vice president took a trip to 3M manufacturing in Minnesota,” Short said, referring to The 3M Company as one of the “primary producers” of respirator masks.

Fox Business

He also addressed the federal government’s Coronavirus response on CNBC March 20 and March 24; on Fox News March 19 and March 21; and on CNN March 25.

In these television interviews, Short discussed PPE manufacturing, therapeutic drugs, public-private partnerships, and negotiations on the Coronavirus assistance package.

Scott Amey, director general of the government watchdog group Project on Government Oversight, said that Shorts’ work is clearly covered by interest laws.

“There is a potential here that the vice president has a conflict of interest in the fact that he works with the issues and attends meetings and makes presentations to the public based on things he learned through the pandemic. [response] and what’s coming into the White House, “Amey said.

A source familiar with Short’s shareholding said earlier this month that the Office of Government Ethics reviewed Shorts’s ethics program regarding the Coronavirus Task Force with the vice president’s legal counsel.

“Earlier this month, Mr. Short asked OGE to visit the problem,” the source said.

On May 1, the Office of Government Ethics took the unusual step of sending out a memo reminding executives of executive ethics that stock can be a conflict of interest.

OGE did not comment on whether the memo was sent out due to a special case.

NPR’s Barbara Van Woerkom contributed to this report.

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