Yahoo News OK But Why Are Members of Congress Allowed to Play the Stock Market in the First Place?
Donald Trump's ascension to the presidency was the alarm going off in the bank. Smash the glass and grab everything you can. This is true with regard to the First Family, who are relentlessly monetizing public office through a rolling series of conflicts-of-interest. It's true of many in the president's Cabinet, who often nakedly represent the interests of the industries they're tasked with regulating—and which they will likely (re-)join in some capacity, with appropriate compensation, when they leave government. But it's also true of many outside the executive regime. Maybe it's not so much that the alarm is going off, but that the president has demonstrated the security guards are fast asleep.
We had some new and infuriating evidence of this a couple of weeks back, when we learned a couple of Republican senators unloaded a whole bunch of stock at a very convenient time. That is, the time between when they began to receive closed-door briefings in February on how bad the coronavirus crisis might get and when financial markets reacted to this.
Senator Richard Burr, chairman of the Senate Intelligence Committee—a post that makes him privy to more information than pretty much anyone outside the White House—dumped up to $1.7 million in stock while publicly assuring us all that the U.S. was well positioned to weather the storm. Audio also emerged of Burr telling wealthy and well-connected constituents around the same time that actually, things were going to get really bad. Classy. NPR, which surfaced that recording, now reports the Justice Department has launched a full investigation into Burr's stock trades, though it seems like it could be tough to make a case. Burr's lawyer claimed in a statement he was trading on public information and that the senator welcomes a "thorough review of the facts." Burr reacted to the initial story about the recording by suggesting it was a "tabloid-style hit piece," perhaps the first time NPR has been grouped in with the New York Post.
And then there's Georgia Senator Kelly Loeffler, also a Republican, who happens to be married to the CEO of the company that owns the New York Stock Exchange. Initially, it emerged that Loeffler had dealt up to $3 million "in a series of transactions beginning the same day as a Senate briefing on the virus." But the Atlanta Journal-Constitution provided us an update on Wednesday.
The largest transactions — and the most politically problematic — involve $18.7 million in sales of Intercontinental Exchange stock in three separate deals dated Feb. 26 and March 11. Loeffler is a former executive with ICE, and her husband, Jeff Sprecher, is the CEO of the company, which owns the New York Stock Exchange among other financial marketplaces.
During the same time period reflected on reports filed late Tuesday, the couple also sold shares in retail stores such as Lululemon and T.J. Maxx and invested in a company that makes COVID-19 protective garments.
Nothing to see here! Just a senator selling off retail stock and acquiring shares of a company that makes PPE at a very convenient time. Loeffler's spokesperson had an explanation, kind of:
“Sen. Loeffler came to Washington on a promise to be a different kind of elected official,” Kerry Rom said. “She holds herself to high standards of ethics and transparency, including acting in accordance with both the letter and spirit of the law, which she has done at every step of her time in the Senate and in her lengthy career in financial services.”
A different kind of elected official, indeed. Loeffler has said throughout that neither she nor her husband control their portfolios on a day-to-day basis, and the investment firm that oversees them is merely executing a strategy formulated well in advance. It's all a coincidence! Meanwhile, Loeffler—like Burr—spent the time where all these fortuitous transactions were going down telling the American public that everything was groovy, man. In fairness, she was just toeing the White House line at the time, when Trump was still saying the cases would go from 15 to zero and the virus would disappear miraculously. A little over a month later, of course, he now says he will consider it a success for his administration if 200,000 Americans die.
It's tempting to believe all this shadiness is just an outgrowth of the Trump era, where only people who sufficiently lack integrity or shame would enter Republican politics. (How else could you sign up to defend what you know you'll have to defend?) But Burr is an old-guard Republican, and besides, the fact that members of Congress can stock-trade while in office points to a real systemic corruption. Trump is, per usual, a particularly garish expression of all the worst elements of the china shop into which we saw fit to release him. A chameleonic bull. Perhaps this is another area where the generational crisis we're plunged into could be an opportunity for permanent revolution in how we do things. Vote by mail, universal paid sick leave, and you don't get to play the market when you hold public office. Also, make cruises illegal.
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