On the evening of April 3, 2013, the Wall Street Journal published a striking investigative piece: shortly before federal officials announced good news for private insurers regarding Medicare payments, those companies’ stocks jumped. It appeared that some investors had benefited from inside information, possibly in violation of insider-trading laws.
Less than a day later, according to materials provided to MaddowBlog by a Democratic source, Sen. Chuck Grassley (R-Iowa), the ranking Republican on the Senate Judiciary Committee, wrote to the Centers for Medicare and Medicaid Services, seeking an explanation. Soon after, Grassley sent a related letter to the Office of Management and Budget, suggesting the Iowa senator suspected Obama administration officials as the source of the leak.
It now appears Grassley may have been barking up the wrong tree. The Wall Street Journal reported this week:
Prosecutors are gathering evidence for a grand-jury probe into whether congressional staff helped tip Wall Street traders to a change in health-care policy, an indication the long-running investigation has entered a more serious phase.Public documents show federal law-enforcement officials and the Securities and Exchange Commission are seeking records and other evidence from the House Ways and Means Committee and a top congressional health-care aide, Brian Sutter, staff director of the committee’s health-care subpanel.
The SEC has subpoenaed the House committee and Sutter, a top aide on Rep. David Camp’s (R-Mich.) panel, and the Justice Department subpoenaed Sutter to appear before a grand jury. It’s not clear whether that appearance has already taken place.
Note, this is not at all common. Indeed, as the WSJ noted, this is the first time federal law-enforcement agencies have subpoenaed lawmakers and their aides in nearly a decade.
The Journal‘s report went on to note that it’s already apparent that the 2013 stock-price jump was the result of an email alert from a Beltway research firm. And where did the firm receive that information? The article says the source was a lobbyist named Mark Hayes, who, ironically, used to work on health care policy for Sen. Chuck Grassley.
And where did the lobbyist receive the information? That’s what the SEC and the Justice Department apparently want to know.
Keep an eye on this one.
Recommended
Steve Benen is a producer for "The Rachel Maddow Show," the editor of MaddowBlog and an MS NOW political contributor. He's also the bestselling author of "Ministry of Truth: Democracy, Reality, and the Republicans' War on the Recent Past."