Representative Dan Crenshaw (R-TX) did not buy or sell any shares in his first 13 months as a congressman. That changed in March 2020, when he made half a dozen purchases as the biggest economic relief program in history was written and debated.
Five of those purchases took place in the three days between March 25 and March 27, when the Senate and House voted on the CARES Act and former President Trump signed it. Crenshaw, who backed the bill, did not initially disclose the transactions, in violation of the STOCK Act, a law that requires members of Congress to notify the public when engaging in securities transactions. Months later, he changed his records to reflect the purchases.
The transactions, which are only listed in a range of values, total a maximum of $ 120,000 and do not compare in size or volume to the types of transactions that made headlines executed before the pandemic by the senses. Kelly Loeffler and David Perdue. They didn’t emerge until December, when Crenshaw amended its annual report, which was originally submitted in August.
“You are referring to financial disclosures that use a range to report share purchases, and you choose the higher end of the range to come up with that figure of $ 120,000,” said Justin Discigil, director of communications for Crenshaw, in an email. . “The actual figure is at most around $ 30,000,” said Discigil, and “his purchases were in no way unethical or related to official business.”
However, the timing, along with Crenshaw’s business history and ties to the industry, raise questions as to why it made the purchases and failed, on two occasions, to disclose them.
“Members of Congress should not actively trade securities in the midst of a crisis. It shows that when the market collapses, that person thinks to himself and uses volatility to his advantage, ”said Ben Edwards, a securities law expert and professor at the William S. Boyd School of Law. ‘University of Las Vegas in Nevada. . “We all have limited attention, and if you have [an] one eye on your stock portfolio, then you’re not giving this crisis or the American people the attention they need. “
Crenshaw, elected in 2018, had never traded individual ruling shares until the crisis erupted, according to public records. Then, when global markets collapsed on March 12, Crenshaw bought between $ 1,001 and $ 15,000 on Amazon. Two weeks later, as Congress voted on the CARES Act, Crenshaw bought shares valued at the same price range in Southwest, Boeing, energy infrastructure maker SPX and Kinder Morgan, a Texas-based company specializing in construction of pipelines. He also bought into an index fund linked to the performance of the S&P 500.
While it is not clear why Crenshaw initially did not disclose the transactions, they came as a growing number of senior lawmakers were trapped in an insider trading scandal. With the exception of the Amazon purchase, all of Crenshaw’s transactions came within a week after ProPublica announced that Senator Richard Burr (R-NC) had sold up to $ 1.72 million as a result. of private briefings on coronaviruses. On March 20, The Daily Beast reported that Loeffler and her husband had sold seven figures of shares after his first confidential pandemic briefings. Control quickly fell on transactions executed by Sen. David Perdue (R-GA), Jim Inhofe (R-OK), Dianne Feinstein (D-CA) and John Hoeven (R-ND), spurring investigations by the Department of Justice, Senate Ethics Committee, and Securities and Exchange Commission. None of the lawmakers faced criminal charges. Perdue and Loeffler lost their re-election candidacy to Democratic challengers Jon Ossoff and Reverend Raphael Warnock in the January runoff.
In response to the scandal, the Campaign Legal Center analyzed all congressional stock trades made between February 2 and April 8, finding that a dozen senators completed 127 combined trades within the allotted time frame and 37 House members have carried out at least 1358 transactions.
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However, Crenshaw’s name did not appear in these reports as he had not disclosed his purchases. The STOCK Act, a 2012 law designed to deter elected federal officials from trading in inside knowledge, requires Congress to post all transactions within 45 days. Not only did Crenshaw fail to disclose the transactions at the time, but he failed to include them in his annual disclosure, filed in August. And while this filing shows Crenshaw holds the new assets, the form also requires members to list transactions, including dates, that Crenshaw left blank. They only emerged when Republican Lone Star filed an amended annual report in December.
The Crenshaw spokesman told the Daily Beast that the former Harvard and former Navy SEAL had tabled the amendment “to resolve office issues in his report, such as making sure the dates were correct.”
At the time of the transactions, Congress was scrambling to put together the CARES Act, a monumental emergency relief package costing over $ 2 trillion that Crenshaw supported. The Republican-led Senate approved the bill on March 25, the day Crenshaw bought shares of SPX and the S&P 500 fund. The package passed through the House the next day, when Crenshaw took over Southwest and Kinder Morgan. , and was promulgated by Trump on March 27, the day Crenshaw acquired its stake in Boeing.
At the time, Crenshaw sat on House committees for the budget and homeland security. Boeing in particular has been lobbying a lot, and successfully, for a piece of the CARES law, first asking for $ 60 billion and then hoping to receive a $ 17 billion tranche that lawmakers have earmarked for “essential businesses.” the maintenance of national security ”. The non-partisan Institute for Fiscal and Economic Policy said at the time that it was “widely understood that the sponsors of the bill want much, if not all, of that $ 17 billion to go to a only company: Boeing. But in late April, the maker passed the deal, opting instead to raise $ 25 billion in private investment through action taken by the Federal Reserve regardless of the CARES Act. The day Crenshaw bought Boeing, markets broke their brief positive boom and the company led boards of directors that day in terms of losses. Its investment has now grown by over 38%. Boeing employee PAC donated $ 3,000 to Crenshaw’s 2020 campaign.
All of Crenshaw’s purchases have shown returns, with the biggest returns from Boeing, Amazon and Southwest Airlines. Amazon has gone from around $ 1,820 per share on March 12 to $ 2,979 today, and Southwest Airlines has gone from around $ 41 to just over $ 60.
“It’s not hard to see that airlines would be among the hardest hit stocks in a global pandemic that restricted air travel,” Edwards said. “So in the short term they’re going to be hammered, but in the long term the sky is going to be busy again.” That calculation includes the likelihood of the federal government intervening to keep the industry up, and in mid-April the airlines got their $ 25 billion bailout.
Edwards said that if the limited information available makes it impossible to know why Crenshaw and other officials are making specific transactions, new reforms introduced in response to the trade scandal would make such transactions impossible.
“Some of the proposals to limit share buying would really curtail a business like this. For example, Senator Warren’s plan would ban the buying and selling of individual stocks and simply allow members to follow the markets through index funds, ”he said. “Another proposal is to force lawmakers to disclose their business plans in advance, which executives of publicly traded companies are already doing. This would reduce the likelihood or suspicion that they are using private information or their own legislative powers to their advantage. “
Kedric Payne, senior ethics director at the Campaign Legal Center, told the Daily Beast in November that lawmakers in public trust shouldn’t risk even the appearance of having a personal financial interest in their government work.
“It’s almost impossible to make decisions affecting an industry and then receive a personal financial benefit without appearing in a conflict of interest,” Payne said. “Even though officials rely on financial advisers to make business decisions on their behalf, the perception of conflict of interest remains, as the public does not know if there are any winks and nods prompting the transactions.”
Last week, Business Insider reported that Transparency advocate Rep. Tom Malinowski (D-NJ) failed to disclose dozens of stock trades during 2020. Malinowski, who like Perdue – but unlike Crenshaw – claims that a third-party financial adviser executes its transactions independently, said his time in the barrel has whetted his appetite for reform.
“This reinforces my view that members of Congress should not be invested in the stock market or, if they are, they should not have visibility into the stocks they hold,” Malinowski later told NJ.com. “Inevitably, even though decisions are made by an investment firm without input from the congressman, there can be this perception of influence because what we do in Congress affects every aspect of the economy.
Crenshaw does not currently own many individual stocks. Beyond the March transactions, it only owns shares in Starbucks, Alphabet – Google’s parent company – and a small stake in Schlumberger, a global oil services provider based primarily in Europe, with a branch in Houston. The energy-dependent metropolis is also home to Kinder Morgan, but the offices of both companies are located just outside the lines in the gerrymandered district of Crenshaw.
The trades intersect with Crenshaw’s government work, particularly in the energy field. The oil and gas industry contributed a total of $ 453,247 to his re-election efforts in 2020 and was its industry’s biggest patron in terms of PAC donations. And while that may not have posed a direct conflict of interest last year, it may no longer be: On January 21, the House Republican leadership removed Crenshaw from his assignments. to the Homeland Security and Budget Committee and transferred it to the Energy Committee. and trade.
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