A Greenberg Traurig lobbyist is at the center of a U.S. senator’s investigation into how "political intelligence" can affect markets. The inquiry includes an examination of the lobbyist’s email about a dramatic change in government’s health care policy more than an hour before it was announced.

Senator Chuck Grassley (R-Iowa) is seeking all of Greenberg Traurig’s internal and external communication about the April 1 announcement by the Centers for Medicare and Medicaid Services dealing with proposed rate cuts, according to a letter Grassley wrote this month to the law firm’s outside counsel.

The letter focuses on how Height Securities, a Washington political intelligence firm, issued an advisory to its clients at 3:42 p.m. that day about the move, about 45 minutes before the announcement. Trading volume for the top three affected stocks jumped by $662.8 million in the final minutes of trading, Grassley said.

"Thirty minutes earlier, at 3:12 p.m. … I understand a lobbyist at Greenberg Traurig sent an email to Height Securities and others regarding the CMS announcement on the Medicare Advantage (MA) policy rate change," Grassley wrote in the April 9 letter to Williams & Connolly partner Kevin Downey, who represents Greenberg Traurig.

There have been no accusations of wrongdoing by Height Securities or Greenberg Traurig. In his letter, Grassley said these Height Securities reports "raise serious questions regarding how political intelligence brokers are able to gather information for their clients in advance of market moving events."

Grassley’s letter does not identify the Greenberg Traurig lobbyist who sent the email. The Wall Street Journal, which broke the story on Wednesday, said it reviewed emails and identified the sender as lobbyist Mark Hayes.

Hayes is a former congressional aide who served for four senators, including more than seven years as health policy director and chief health counsel for the U.S. Senate Finance Committee Republican staff for Grassley, according to his biography on his firm’s website.

Hayes did not respond to a request for comment. "Mr. Hayes provided his own policy analysis of this situation. He did not receive or disseminate material non-public information," a Greenberg Traurig spokeswoman said in a statement. "The firm will, of course, cooperate with any official inquiries about this matter."

The attorney representing Height Securities, Reginald Brown, a partner at Wilmer Cutler Pickering Hale and Dorr, declined to comment. Brown provided a statement from Height Securities managing partner Andrew Parmentier that said the advisory to its clients was based on research "in accordance with applicable laws and regulations."

"We have voluntarily cooperated with the review by Senator Grassley’s staff, including answering questions from his staff over the weekend, in an effort to quickly clear the air," Parmentier said. "We appreciate the diligence with which his staff has reviewed this matter so far."

Grassley and Representative Louise Slaughter (D-N.Y.) are planning to introduce legislation on political intelligence disclosures this Congress. Federal law defines political intelligence as information "derived by a person from direct communications with an executive branch employee, a Member of Congress, or an employee of Congress; and provided in exchange for financial compensation to a client who intends, and who is known to intend, to use the information to inform investment decisions."

"These relationships aren’t as transparent as they ought to be," Grassley said in a written statement Thursday afternoon. "Members of Congress and their staff ought to know when people they’re talking to, including former staff, are being paid to pass on information to others who plan to trade stocks as a result."

A 34-page report released earlier this month by the U.S. Government Accountability Office to address the murky arena of political intelligence left unanswered many questions about the size and power of the shadowy information gathering industry. The GAO said it couldn’t determine either the prevalence of political intelligence sales or the exact role a single piece of political intelligence plays in investment decisions.

Todd Ruger and Andrew Ramonas write for The Blog of Legal Times, a Daily Report affiliate.