The Daily Beast broke the story last night that on the day Senators received a closed-door briefing from the Senate Health Committee on the Coronavirus threat, Georgia Sen. Kelly Loeffler began selling stock.
That first transaction was a sale of stock in the company Resideo Technologies valued at between $50,001 and $100,000. The company’s stock price has fallen by more than half since then, and the Dow Jones Industrial Average overall has shed approximately 10,000 points, dropping about a third of its value.
It was the first of 29 stock transactions that Loeffler and her husband made through mid-February, all but two of which were sales. One of Loeffler’s two purchases was stock worth between $100,000 and $250,000 in Citrix, a technology company that offers teleworking software and which has seen a small bump in its stock price since Loeffler bought in as a result of coronavirus-induced market turmoil.Sen. Kelly Loeffler Dumped Millions in Stock After Coronavirus Briefing, Daily Beast, March 20, 2020
This looks bad, and raises questions for sure. But I wanted to hear both sides of the story. After all, the senator and her husband (Jeffrey Sprecher, CEO of Intercontinental Exchange, the parent of the New York Stock Exchange) are worth around $500 million, at last count, and 29 relatively small (for them) trades isn’t a mass selloff.
This could have simply been part of a strategy to reposition for less market risk. In my day job, one of my duties is as a fiduciary. Selling off stocks for a few months has not been unusual or nefarious.
But then, this:
Now that looks really bad. These sell-off transactions literally began the day Loeffler got the briefing. If true, this is not only politically awful, but it’s also illegal. Members of Congress cannot trade based on non-public briefings or information.
And to make it look worse, while the trades were happening, Loeffler tweeted “Democrats have dangerously and intentionally misled the American people on #Coronavirus readiness. Here’s the truth: @realDonaldTrump & his administration are doing a great job to keep Americans healthy & safe.”
Loeffler’s actions and words are not in alignment. If you remember, Loeffler was appointed by Georgia Gov. Brian Kemp to fill the short term of Sen. Johnny Isakson, who retired on December 31, 2019. Loeffler is in a free-for-all jungle race against both Republicans and Democrats.
Notably, Rep. Doug Collins, who was President Trump’s choice for Isakson’s Senate seat, is running, along with at least four Democrats, including Rev. Raphael Warnock, pastor of Ebenezer Baptist Church–Martin Luther King’s pulpit. So was this merely a hit job?
Lachlan Markay, one of the reporters on the story, is a good reporter and I’ve met him at least once. A solid guy with a good reputation. I don’t believe this is some smear or hit job. It happened.
The Daily Beast did reach out to Loeffler’s office for comment, and no response was offered. But later, Loeffler did tweet a response, calling it a “ridiculous and baseless attack.”
“I do not make investment decisions for my portfolio,” she continued. “Investment decisions are made by multiple third-party advisors without my or my husband’s knowledge or involvement.”
That may be true. But it’s an awfully bad coincidence that her advisors decided to dump stock the same day she received a private briefing. It’s a bigger coincidence that other senators, including Sen. Richard Burr, a Republican from North Carolina, also sold stock after the briefing.
Senator Burr filed a financial disclosure form for personal transactions made several weeks before the U.S. and financial markets showed signs of volatility due to the growing coronavirus outbreak,” his spokesperson said. “As the situation continues to evolve daily, he has been deeply concerned by the steep and sudden toll this pandemic is taking on our economy.”Senator Dumped Up to $1.7 Million of Stock After Reassuring Public About Coronavirus Preparedness, ProPublica, March 19, 2020
Burr’s transactions are much more concerning than Loeffler’s actually. ProPublica reported:
Burr is not a particularly wealthy member of the Senate: Roll Call estimated his net worth at $1.7 million in 2018, indicating that the February sales significantly shaped his financial fortunes and spared him from some of the pain that many Americans are now facing.
Basically Burr dodged a bullet. Loeffler merely sold a small part of her vast portfolio. But if Loeffler is asking us to believe that this was solely the result of her advisors making independent decisions without guidance, that’s a big pill to swallow.
It reminds of the prevarications and excuses of Martha Stewart, who was convicted of insider trading in 2004.
There have already been calls for Loeffler’s resignation, along with Burr’s. This needs to be thoroughly investigated, and soon. We can’t have U.S. Senators, elected or appointed, profiting off America’s collective woes.
If Loeffler can’t offer a better and more evidence-based rebuttal than “it wasn’t me,” I’m afraid she will have to resign, or at least withdraw from the coming special election in November.
I do want to hear both sides, but the facts are very damning here. Loeffler is going to need a very, very good explanation. For her sake, and for the sake of Gov. Kemp’s reputation, I hope she has one.