U.S. Sen. Kelly Loeffler had been on the job less than three weeks when she attended a private, senators-only briefing on the spread of COVID-19.
In the days and weeks after, financial disclosures show that either she or her spouse sold up to $3.1 million in stocks. They made just two purchase, both in companies whose software technology is now in demand as Americans are forced to work from home to stem the rise of the coronavirus.
These transactions have raised questions about whether Loeffler dumped stocks based on inside information she learned during the Jan. 24 briefing or others she was privy to as a senator. And the scrutiny of her financial deals have led both Democrats and Republicans to ask for her to resign or be investigated. One watchdog group has already filed an ethics complaint.
Loeffler says she has done nothing wrong and any decisions about what stocks she or her spouse bought or sold were made by financial advisers who acted independently.
“There is a range of different decisions made every day with regard to my savings and 401(k) portfolios that I am not involved in,” Loeffler said during an interview on Fox News. “And certainly, like any other trade, you can’t see into the future.”
Loeffler, who was appointed to the Senate by Gov. Brian Kemp, has not yet filed a full accounting of her personal wealth but public records show she and her husband are worth more than $500 million.
Loeffler’s office did not respond to questions asking for details about how the transactions were made. She said she wasn’t aware of transactions made until Feb. 16, three weeks after some of them occurred.
Laws prevent members of Congress from profiting off inside information they learn through their elected offices that is not available to the public. In addition to the questions about Loeffler’s financial dealings, there has been scrutiny over financial transactions made by other senators, including Richard Burr of North Carolina, Dianne Feinstein of California, Sen. Jim Inhofe of Oklahoma and, to a lesser extent, Georgia Sen. David Perdue.
Common Cause, a nonpartisan grassroots organization, filed complaints with the U.S. Department of Justice, the Securities and Exchange Commission and the Senate Ethics Committee calling for investigations of Burr, Feinstein, Loeffler and Inhofe for possible violations of the STOCK Act, a law that prohibits senators from using inside information for financial gain.
The conversation about senators' financial dealings during the coronavirus outbreak started with articles by ProPublica and the Center for Responsive Politics that said Burr sold up to $1.7 million in stocks during the same time he was receiving daily briefings on the topic and before the stock market began to decline.
Burr said Friday that he had asked the Senate Ethics Committee to review his transactions to ensure there was nothing improper. Loeffler’s office did not say whether she will also ask for the same review of her stock sell-off.
Loeffler's financial disclosures were first analyzed in a Daily Beast article that said she or her husband, Jeff Sprecher, whose company owns the New York Stock Exchange, sold somewhere between $1.3 million to $3.1 million in stocks from Jan. 24 through Feb. 14.
During that same time, their total stock purchases were somewhere between $200,002 and $500,000. That includes up to $250,000 in stocks for Citrix, a company that provides work-from-home software, and up to $250,000 invested in Oracle, the computer technology company.
Senators are required to report financial transactions within 30 days, but only in ranges that shield the exact amount of individual trades.
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Even if there was no insider trading, the optics of a senator unloading investments in the weeks prior to major drop in the stock market is bound to bring negative attention, several experts in securities laws said.
The conversation about Loeffler and the other senators’ financial deals also has resurfaced years-old debates about whether members of Congress should be barred from buying and selling stocks in individual companies.
“The risk level increases both in terms of violating the law and in terms of breaching the ethics duty you have to the public the more it seems like you are invested in a particular industry or company,” said Usha Rodrigues, a professor at the University of Georgia School of Law.
Republican allies of Loeffler’s top conservative adversary, U.S. Rep. Doug Collins, openly worried about the fallout of her stock sales.
House Speaker David Ralston, a longtime Collins friend, said in an interview Friday that he’s heard from “upset” House candidates concerned that the Republican ticket will get tainted in November by Loeffler’s financial dealings.
“I’m absolutely worried about the down-ticket damage,” said Ralston. “A lot of people are going to associate these activities with some very fine candidates running for the Georgia House and are going to hold that against us.”
Collins, a four-term Gainesville congressman, has long painted Loeffler as a flimsy conservative intent on using her deep personal wealth to secure her Senate seat. He seemed certain to use stock trades to further that narrative through the November’s winner-take-all special election.
“People are losing their jobs, their businesses, their retirements, and even their lives and Kelly Loeffler is profiting off their pain?” said Collins. “I'm sickened just thinking about it.”
The Democratic Party of Georgia and the Democratic Senatorial Campaign Committee, which are fielding challengers to Loeffler and Perdue, said both senators should be investigated.
Perdue, like Loeffler, was already wealthy before he joined the U.S. Senate. His net worth is estimated to be between $14.9 million and $42.6 million.
In nearly 100 transactions from late January through mid-February, he bought and sold in equal amounts. Perdue’s transactions do not indicate the same sell-off as his counterpart Loeffler.
His staff was also eager to distance himself from the controversy surrounding her, pointing out that he has always used an independent adviser to make financial decisions.
However, there are still questions about his transaction, too.
Perdue invested up to $245,000 in Pfizer, the pharmaceutical company, during multiple transactions around the same time that members of Congress began sounding the alarm that more should be done to address the spread of the virus.
Perdue also sold up to $165,000 in stocks for Caesar Entertainment, the casino company whose facilities have shuttered to help combat the spread of the virus.
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Both senators had praised President Donald Trump’s handling of the coronavirus pandemic even as Democrats accused the White House of being slow to act and downplaying, at least initially, the severity of its spread.
On Jan. 24, the Health, Education, Labor and Pensions Committee -- Loeffler is a member -- and the Foreign Relations Committee -- Perdue is a member -- held a briefing on coronavirus that was open to the entire Senate.
Perdue’s total sales in the weeks after fall anywhere between $148,050 to $995,000 and his purchases are in the range of $141,043 to $890,000. Among his new investments are stocks in Disney and Delta Airlines, companies that haven’t fared well during the outbreak.
“In the last five years, I’ve had outside professionals that manage my personal affairs,” Perdue said in an interview with Nexstar Media Group. “I don’t deal with it on a day-to-day basis. I think if you look through that period of time, you will find purchases and sales just like you would last year this time or any other time.”
The best way for members of Congress to avoid question about their stock trading is to avoid investing directly in companies, securities law experts said, either by creating a qualified blind trust or investing solely in mutual funds or similar financial vehicles that combine a pool of products.
“They shouldn’t be allowed to own individual stocks,” Richard Painter, a corporate law professor at the University of Minnesota, said. He worked as a White House associate counsel during the George W. Bush years. “They should be subject to the same conflict of interest laws that apply to executive branch officials.”
Reporters Chris Joyner and Greg Bluestein and audience specialist Isaac Sabetai contributed to this report.
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