A federal ethics watchdog agency ordered Susan Rice, the director of President Biden’s Domestic Policy Council, to sell a lucrative stake in Canadian energy firm Enbridge Inc. earlier this this month, just weeks after his administration allowed the company's hotly debated Line 3 oil pipeline to proceed.
The Office of Government Ethics directed Rice to divest from more than three dozen corporate entities in which she, her husband, or a family trust held shares, due to potential conflicts of interest, according to filings dated July 9 and obtained by FOX Business. The holdings include shares of Enbridge worth more than $2.7 million on the date of the filing.
In late June, Biden administration officials defended a Trump-era decision to grant permits for the Line 3 pipeline. The decision roiled environmental activists and Native American groups and came just months after Biden shuttered the Keystone oil pipeline amid similar protests.
Rice’s stake in Enbridge is one of several stock holdings that seemingly conflicted with some of the Biden administration’s most prominent policy initiatives, including efforts to lower pharmaceutical drug prices, crack down on the projects most responsible for carbon emissions, and target Big Tech firms.
Rice’s other notable holdings included shares of pharmaceutical giant Johnson & Johnson worth nearly $1.1 million, as well as stock in Pfizer, tech giants Apple and Microsoft and energy giant Chevron. Notably, Johnson & Johnson and Pfizer produced two of the COVID-19 vaccines utilized – and frequently scrutinized – during a nationwide vaccination campaign.
By selling the stakes after entering the Biden administration via a certificate of divestiture, Rice can defer paying capital gains tax on the transactions. The holdings identified in the certificate of divestiture were worth more than $30 million in total.
|JNJ||JOHNSON & JOHNSON||177.20||+0.03||+0.02%|
A White House official said Rice agreed to divest from all of the listed assets during the transition process leading up to Inauguration Day.
"While waiting for a [certificate of divestiture], she has been recused from particular matters involving any of the assets she still held and was counseled on her recusal obligations consistent with all applicable ethics rules," the White House official said.
"She has divested all of her Canadian assets and many US assets as of early this week. Her remaining US stocks are in the process of being divested and will be divested before July 27," the official added.
Though the delayed sales are within legal parameters, Biden ethics officials should have directed Rice to sell when she was first tapped for an administration post last December, according to Richard Painter, who served as the White House’s chief ethics lawyer under former President George W. Bush.
"A good ethics shop, you’d know it up front," Painter said. "The transition team should have an ethics person who says, okay, we’re going to go through what you have to sell. They should have lined that all up in December or January. I’m a little surprised it took this long, but I don’t want to blame her."
The Daily Poster was first to report on Rice’s certificate of divestiture.
The extent of the necessary recusals likely impacted Rice's ability to serve effectively as a policy adviser, Painter added.
"I just don’t see how you can advise the president," he said. "You’d have a lot of recusals in place when you’re holding on to that stock, which makes it difficult to do your job, and then if you screw up, you potentially violate a criminal statute."
Rice is the latest of many White House officials who have sold stock holdings after entering an administration.
In May, Energy Secretary Jennifer Granholm sold shares in electric vehicle maker Proterra worth $1.6 million at the OGE’s direction. During the Trump administration, former Secretary of State Rex Tillerson saved an estimated $13 million in taxes through the capital gains deferral after he was directed to sell shares of Exxon Mobil worth $54 million.