(The Center Square) — Before President Trump warned pregnant women to avoid taking Tylenol, three members of Congress dumped stock in the Fortune 500 company that makes the popular painkiller -- sell-offs that saved them from incurring sizable losses, an investigation by The Center Square found.
The lawmakers sold $1,001 to $15,000 each in Kenvue Inc., a Summit, New Jersey-based consumer products company that spun off from Johnson & Johnson two years ago. The sales are notable also because most investment analysts recommended that investors hold their shares.
Among the three lawmakers is U.S. Rep. Scott Franklin, a Florida Republican, whose committee work overlapped with his reported sale of Kenvue stock on June 16, House financial disclosures show. He is the vice chairman of a House Appropriations subcommittee that oversees the budget of the Food and Drug Administration, the federal agency that regulates Tylenol.
Franklin’s spokesperson did not return an email or phone call for comment.
Craig Holman, a lobbyist for Public Citizen, a nonprofit, said the lawmakers’ sale of Kenvue’s stock before the Trump administration’s announcement on Sept. 22 raises questions about whether lawmakers had inside information.
“It’s a possible conflict of interest,” Holman said in an interview. “The fact that they sold prior to the public scandal suggests they might have traded on non-public information before the Trump administration lowered the hammer.”
Kenvue has come under fire for its use of acetaminophen, the primary active ingredient in Tylenol. In August, the Icahn School of Medicine at Mount Sinai, a private medical school in New York, reported that pregnant women who use acetaminophen may be at elevated risk of delivering babies with neurodevelopment disorders like autism and attention-deficit hyperactivity disorder. Other studies have found no connection.
On September 12, the Wall Street Journal reported that Kenvue’s interim CEO, Kirk Perry, met with Health and Human Services Secretary Robert F. Kennedy, Jr., to argue against declaring a strong link between Tylenol use and autism. Perry’s lobbying effort came up short.
A Kenvue spokeswoman said that "sound science clearly shows that taking acetaminophen does not cause autism."
On September 22, Kennedy announced that the government would issue a warning on Tylenol packages about the possible risks for pregnant women.
Trump was blunt.
“Don’t take Tylenol,” he said in a press conference at the White House. “Fight like hell not to take it.”
Identifying possible conflicts of interest was a stated goal of a 2012 law known as the Stock Act. The law bars members of Congress, executive branch officials and their families from using information they discover in the course of their jobs for financial gain and requires them to file periodic transaction reports of trades worth more than $1,000 within 45 days.
Legislation to prohibit lawmakers from trading and owning stocks has never come up for a vote before the full House or Senate. On July 30, the Senate Homeland Security and Government Affairs advanced a bill from U.S. Sen. Josh Hawley, a Missouri Republican, that would do just that. Hawley's legislation, like companion bills in the House, would permit lawmakers to own mutual funds.
No lawmaker has been prosecuted for violating the law.
In 2018, the Securities and Exchange Commission chargedU.S. Rep. Chris Collins, a New York Republican, with insider trading. A member of the board of directors of a publicly traded Australian firm, Collins was accused of informing his son, a stock owner, that the company's top product had failed a clinical trial before the news was public, the charges show. A year later, Collins pleaded guilty to one count of conspiracy to commit securities fraud, according to the U.S. Department of Justice.
Franklin reported that through a joint account with his wife, the couple sold $1,001 to $15,000 of Kenvue stock on June 16, according to a filing with the U.S. Office of the Clerk.
U.S. Rep. Ro Khanna, a California Democrat, reported that his wife, Ritu Ahuja Khanna, sold stock in Kenvue through a blind trust on August 26, his filing showed. The sale came three weeks after she bought $1,001 to $15,000 worth of the stock, on August 4.
Spokeswoman Sarah Drory declined to comment.
The third lawmaker who reported dumping Kenvue’s stock is Sen. Sheldon Whitehouse, a Rhode Island Democrat, through his wife, Sandra Thornton Whitehouse. A spokeswoman did not return a voicemail and email for comment.
None of the three lawmakers sold Kenvue stock alone on a single day. Each lawmaker reported selling the stock among his trades. Khanna reported that his wife via a blind trust bought 53 stocks and sold 51 on Aug. 26.
The lawmakers’ sales proved timely. Since June, Kenvue’s stock price has plunged more than 20 percent.
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