Reid tightens up on investments by staff

WASHINGTON -- Sen. Harry Reid will require staff members to review their investments for potential conflicts after a report that a senior energy aide bought and sold stock in a renewable energy company at a time Congress was considering an industry tax break.

Chris Miller nearly doubled a $3,500 investment in a Michigan company, Energy Conversion Devices, over nine months in 2008, Reid's office confirmed after the Wall Street Journal focused on the trades in a Monday story.

Reid's office said the aide's investment was above-board but showed "poor judgment."

Later Monday, Reid spokesman Jim Manley said Miller will divest stock that was bought last year in another renewable energy company. In March 2009, the adviser bought stock in First Solar, a Tempe, Ariz.-based company that manufactures solar modules using a thin film semiconductor process.

According to a financial disclosure report he filed with the Senate, Miller bought between $1,000 and $15,000 of First Solar stock. Senate rules do not require reporting the exact amount of the purchase. Miller could not be reached, and Manley said he did not know the amount.

Manley said Reid will issue an all-hands call for staffers to review their portfolios and divest any investments that could raise an appearance of conflict. Manley said he was not aware of any others that could be questioned.

"If any Reid staff owns stock in the company in an industry that falls directly in their issue area, then they will have to divest that security or transfer all decision making on the asset in question to a broker that will make decisions on it completely independent from the staffer," Manley said.

"We are sensitive to these kinds of issues, and we are going to try to make sure it never happens again," he said.

Miller, 47, did not comment on Monday after telling the Wall Street Journal its story was misleading. Manley said Miller had no influence on energy tax legislation, and his investment activities were based on analyst recommendations and news reports about the company.

The investment tax credit was not particularly important to Energy Conversion Devices, according to the company's discussions with analysts outlined in a four-page rebuttal released by Reid's office.

Miller, a Detroit native who has spent more than 20 years on Capitol Hill, is Reid's chief adviser on renewable energy, which has been a Reid focus in recent sessions of Congress.

"Mr. Miller showed poor judgment, and Senator Reid has made it very clear to Chris and all his staff that their actions must not only follow the law but must meet the higher standards the public has a right to expect from elected officials and their staffs," Manley said.

Much of Reid's liquid assets, consisting mostly of stocks and municipal bonds, are handled through a blind trust.

The development opened Reid to Republican criticism in the midst of a tight re-election campaign. Republican spokesman Jahan Wilcox said Reid should speak personally on the topic and require the profits from the aide's stock sale be donated to a Nevada charity.

The tax legislation, which had bipartisan support, extended a 30 percent investment tax credit for solar energy companies. Miller bought the stock in January 2008 and sold most of it in May. The House began action on the bill around that time.

The Senate passed the legislation in September, after Miller sold the remainder of the stock, according to the Wall Street Journal. He realized a 91 percent profit of $3,200, the paper said.

At least 72 House and Senate aides have traded stocks in companies their bosses helped oversee, according to the Wall Street Journal analysis of financial disclosures from 2008 and 2009. It found examples among staffers for both Democratic and Republican lawmakers.

The staff members said they did not profit from information they might have gleaned from working close to influential lawmakers.

"Even if they had done so, it would be legal, because inside trading laws don't apply to Congress," the Journal said.

A bill that would prevent members of Congress and their staffs from trading stocks based on nonpublic information has gone nowhere since 2006.

Manley said Miller, as all staffers, has attended mandatory ethics training as required by changes Congress passed in 2007.

Manley would not say whether Miller might face any repercussions, declining to comment on a personnel matter.

Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault@stephensmedia.com or 202-783-1760.