US House Representative John Yarmuth (D-KY) purchased tens of thousands of dollars in pharmaceutical and defense stocks in 2021. According to an August 2021 Sludge article, Rep. Yarmuth disclosed via a Periodic Transaction Form in early November that he purchased stock in Bristol Myers Squibb (BMS), a multinational pharmaceutical company, amounting between $2,000 and $30,000. Rep. Yarmuth also purchased as much as $15,000 each in General Dynamics and Northrop Grumman stocks, defense contractors that generate revenue largely from federal contracts. Several other members of Congress have not only invested similarly but are also directly responsible for voting to approve the companies’ funding for these contracts.
Of course, Yarmuth’s stock purchases create obvious conflicts of interest. As Budget Committee Chair, he oversees a group which, according to Sludge’s David Moore, “writes the annual concurrent budget resolution that declares appropriate budget levels for categories of the government including national defense.” Additionally, Rep. Yarmuth’s investments in BMS came at a time when the Build Back Better Act, which included attempts to reform drug pricing, faced great opposition from many House Democrats. BMS, which is a prime manufacturer of common Medicare treatments that cost Medicare and patients billions of dollars each year, also belongs to two trade associations, Pharmaceutical Research and Manufacturers of America (PhRMA) and Biotechnology Industry Organization (BIO). Each has lobbied against measures involving drug price negotiation, meaning Rep. Yarmuth has invested in companies which benefit from legislation he has a hand in passing.
Congress is no stranger to stock investments amongst its members. Rep. Yarmuth joins a slew of congressional officials that have invested in various industries, including over 50 senators that have purchased stocks in firms and companies they are also trusted to regulate, according to a 2019 report by Alex Kotch for Sludge. Additionally, at least three dozen current US representatives and 11 senators own stock in the defense industry. While Rep. Yarmuth’s purchases do not explicitly violate current legislation, a February 2022 Insider report recognized 57 other members of Congress who recently defied the Stop Trading on Congressional Knowledge Act (STOCK) by not disclosing their financial trades.
Three measures are currently sitting in the House that could deal with congressional stock trading, namely H.R. 1579, H.R. 459 and H.R. 336. The three bills were brought forth as amendments to the For the People Act, a Democrat reform effort, but did not proceed to a full House vote per the House Rules Committee. According to a March 2021 Sludge article, House Speaker Nancy Pelosi appointed the members of the Rules Committee, which blocked the amendments from being voted on. H.R. 336 would prevent Pelosi’s husband Paul, a frequent stock trader, from trading altogether.
Despite the implied conflict of interest that arises from Budget Committee Chair John Yarmuth investing in the military-industrial complex and pharmaceutical giants, Sludge stands alone in terms of critical coverage. In January 2022, the New York Times reported on Yarmuth’s investment in cannabis stocks while shepherding bills necessary for the industry to thrive, among other members of Congress who invested or sold stocks quickly after learning pertinent information about COVID-19 in private briefings. Yet Yarmuth’s other investments, which likely have far more dangerous implications than his interest in the cannabis industry, have yet to appear in establishment news coverage.
David Moore, “Top House Dem Buys Stock in Pharma Companies and Defense Contractors,” Sludge, November 9, 2021.
David Moore, “Lawmakers Benefit from Booming Defense Stocks,” Sludge, August, 23, 2021.
Student Researcher: Branden Ducharme (Diablo Valley College)
Faculty Evaluator: Mickey Huff (Diablo Valley College)