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Mr. GRASSLEY. Madam President, it is said that information is the most valuable commodity. In politics you probably know that information is power. The bigger government gets, the more valuable government information becomes to financial markets. This is especially true of information from agencies such as the Centers for Medicare & Medicaid Services. It is that agency that my remarks are about.
CMS controls $748 billion in government spending per year. That is billions with a B. Today, there are questions surrounding CMS's ability to safeguard nonpublic information. This is not about secrecy in government, it is about government secrets having an impact on the stock market.
This is not the first time I have raised similar questions with the Centers for Medicare & Medicaid Services. In 2011 I received information from a whistleblower that CMS employees were spending large amounts of time in meetings with Wall Street executives. I wrote to CMS with these concerns. The response I received was very troubling. CMS could not tell us how many meetings were taking place with these Wall Street executives. CMS could not tell us who from Wall Street was in these meetings. CMS could not tell us how much time they spent with these executives.
In fact, the only thing CMS could tell us was that it did not track any of this information. Private businesses have stiff controls over access to nonpublic information, the same sort of stiff controls the Federal Government ought to employ for things that would impact the market and give somebody an extraordinary opportunity the average citizen does not have.
The only specific step that CMS took was issuing a two-page memo to its employees. This goes back to that period of time I was asking the questions in 2011. The memo limited the release of market-moving information before the close of the stock markets. Now, that is the right thing to do.
That memo presumably was not followed by somebody. Who, we do not know because on April 1, that requirement appears to have been violated. According to the Wall Street Journal, at 3:42 p.m., Height Securities, a political intelligence broker, issued an advisory note to its employees. This note said--it is right here in the chart: ``We now believe that a deal has been hatched to protect Medicare Advantage rates'' from the minus 2.3 rate update issued in the advanced notice mid-February.
This note goes on to suggest that clients purchase related stocks such as Humana. Between 3:42 p.m. and the market close, and that was just 18 minutes later, volumes for affected companies spiked--look here--spiked in the last 18 minutes to more than $ 1/2 billion.
In fact, the combined volume of shares traded for those companies for those 18 minutes was higher than the rest of the entire trading day. Not only did large numbers of shares change hands, but also buyers who got the information first likely made a heck of a lot of money. For example, Humana stock rose 8.6 percent in a matter of minutes.
Of course, this looks like political intelligence at work--political intelligence meaning the industry of political intelligence at work. A political intelligence broker gets ahold of nonpublic government information before it is widely released, and a select few paying clients end up reaping the rewards.
We just had a study out by the Government Accountability Office studying the political intelligence community. The Government Accountability Office reports that the world of political intelligence is murky. In other words, people are using government. They are profiting from it. But nobody knows who they are.
The public and Congress have little insight into how government information is collected. Collecting is one thing, but it is sold. People who collect it make money, and in the instances you see here, when that gets out people in the know make money.
So who pays for that information? We all know since 1946 lobbyists have had to register, and in more recent legislation have had to disclose their clients, what they lobby on, and how much they get paid. Even campaign donors have to report what they give to various campaigns.
Political intelligence brokers are exempt from any transparency. Yet you see they are around gathering information that should not be out to the public until after the market closes. They are benefiting from it and a lot of other people benefit from it.
Now, because there is no transparency about the political intelligence community, we have to find out what caused this to happen. Did the Centers for Medicare & Medicaid Services employees leak this information? Was there a leak from another government source? Either way we need answers to these questions.
Tomorrow is Acting Administrator Tavenner's confirmation hearing before the Senate Finance Committee. This acting director is a very qualified person. I think she will be able to answer our questions--at least I hope so. So I want her to know, and the Senate to know, that I plan on asking Ms. Tavenner several questions: How did this information get from the Centers for Medicare & Medicaid Services to a political intelligence broker? What steps will CMS take to ensure this does not happen again? And was the memo they sent violated?
I hope she recognizes the importance of these questions. I hope she comes prepared to take responsibility. I hope she comes prepared to explain how she plans to hold someone accountable because in this town, if heads do not roll, nothing changes. She has been a good Acting Administrator of this agency. She wants the Senate to confirm her to the job. This is her opportunity to show us that she is worthy of that confirmation.
I yield the floor, and I suggest the absence of a quorum.
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