What They’re Saying: Loeffler Stock Scandal A “Major Political Liability” That “Could Do Lasting Political Harm”

Unelected “political mega-donor” Senator Kelly Loeffler is facing another round of scrutiny following new disclosures that her husband purchased stock in a company that “makes COVID-19 protective garments.” This comes after previous revelations that Loeffler dumped stock following a senators-only coronavirus briefing and bought shares in a company offering teleworking software — all while publicly downplaying the threat. 

Yesterday, the New York Times called the growing scandal a “major political liability” and the Associated Press reported the transactions “drew notice from government watchdog groups.” Georgia local news also covered the increased “scrutiny.”

WATCH:

Facing bipartisan backlash, calls for investigations, and concerns about down-ticket damage from Georgia Republicans, Loeffler is already seeing support from deep-pocketed Washington conservative groups dry up as she struggles to defend her and her husband’s “unseemly” trades in the weeks following an exclusive all-Senators coronavirus briefing. While Loeffler’s “timely trades” were made as the market plunged, she continued to try to convince the American public that “the economy is strong, & jobs are growing.”

New York Times: Loeffler’s Wealth Becomes a Risk as Rivals Charge She Profited on the Coronavirus

By Nicholas Fandos

April 1, 2020

Key Points:

• When Georgia’s governor picked Kelly Loeffler, a little-known Atlanta businesswoman, to fill the state’s vacant Senate seat late last year, her vast personal wealth and ability to fund her own campaign were top selling points for Republicans.

• Ms. Loeffler, whose husband runs the New York Stock Exchange, pledged to put $20 million of her own fortune toward holding onto the seat in a special election this November. She bought a private plane to fly to and from Washington. And she blanketed televisions with ads highlighting her American-dream-style rise from a humble family farm to the pinnacle of high finance.

• Now, amid an economic crisis brought on by the coronavirus pandemic, Ms. Loeffler’s wealth is threatening to become a major political liability. She is facing questions about whether, in actively trading millions of dollars in stocks over the past couple of months, she and her husband have profited off the crisis based on information she received through her position as a senator.

• Ms. Loeffler, who adamantly denies wrongdoing, is one of several senators whose investments have come under scrutiny in recent days. The Securities and Exchange Commission and the F.B.I. are investigating the decision by Senator Richard M. Burr, Republican of North Carolina, to liquidate most of his portfolio in mid-February before the markets collapsed, a review that a person familiar with it said would most likely include multiple other lawmakers.

• But Mr. Burr is retiring. The fallout for Ms. Loeffler, a political newcomer up for election in just seven months, is potentially much more damaging. She faces a formidable challenge not only from Georgia’s resurgent Democrats but also from Representative Doug Collins, a Republican and vocal defender of President Trump who has refused to drop out of the race despite pleas from party leaders.

• The controversy stems from millions of dollars worth of trades made in the name of Ms. Loeffler and her husband in late January after she attended a private, senators-only briefing on the virus with top government health officials. At that time, as the disease was raging in China, few Americans realized its potential to become a pandemic.

• The stocks sold, including Exxon Mobil, Ross Stores and AutoZone, later lost a significant amount of value, prompting accusations of insider dealing by critics who argued that the timing of the transactions could not be a mere coincidence.

• New public disclosure forms filed with the Senate late Tuesday showed that stocks worth millions of dollars owned by Ms. Loeffler and her husband continued to be actively traded in February and early March, as the markets began to sharply decline. In some cases, the couple saved money they might have otherwise lost by selling, but in aggregate the trades do not appear to have made a substantial impact on their net worth, which exceeds $500 million.

• Still, questions about her investments could do lasting political harm to Ms. Loeffler at a time when many Americans are on edge and concerned about the devastating financial toll the crisis has taken on them.

• “She may not have any kind of legal problems, but it does indicate she comes from a very different world than 99.99 percent of Georgians,” said Charles S. Bullock III, a political-science professor at the University of Georgia.

• Mr. Bullock said the stock trades — particularly if they become an explicit target of a federal investigation — could “plant the seed of doubt in some voters’ mind: Can a person who is this wealthy represent your concerns, as, say, a family that has lost its job because of this pandemic?”

• “Georgia hospitals are at their breaking point and Georgians are losing their jobs, their businesses and their retirement savings, yet apparently all Senator Loeffler could think about was her stock portfolio,” said Helen Kalla, a spokeswoman for Senate Democrats’ campaign arm.

Read the full story here.

AP: Georgia Sen. Loeffler gets renewed scrutiny over stock moves

By Brian Slodsyko and Mary Clare Jalonick

April 1, 2020

Key Points:

• The husband of Georgia Sen. Kelly Loeffler recently acquired as much as $415,000 in stock in DuPont de Nemours, a chemical company that manufactures protective equipment in exceedingly high demand because of the coronavirus pandemic.

• The transaction, detailed in a mandatory disclosure the Republican filed late Tuesday, comes as senators in both parties have faced questions about the stock transactions they made in the weeks before the coronavirus upended the U.S. economy, wiping out jobs and personal wealth.

• Like Burr, Loeffler came under fire last month after she and her husband dumped substantial portions of their portfolio. The transactions came after a series of private congressional briefings on the then-burgeoning pandemic.

• The new purchases disclosed by Loeffler include the purchase of DuPont stock, a company that could see profits soar from the sale of protective equipment as hospitals search for desperately needed supply. Loeffler says she had no involvement in the trades.

• Their latest financial moves are likely to give more ammunition to critics of the newly appointed senator, who is on the ballot this year. Her top Republican primary rival, Rep. Doug Collins, previously accused her of “profiting” while “people are losing their jobs, their businesses, their retirements.”

• Tuesday’s filing shows Loeffler’s husband purchased anywhere between about $166,000 and $415,000 in DuPont, spread across four transactions in late February and early March. The company’s website says “thousands of DuPont employees are working around the clock in all parts of the world to increase capacity of protective garments during this time of high demand.”

• The couple’s new investment in DuPont drew notice from government watchdog groups, particularly because they also recently invested in a tech company that offers telecommuting software that could also benefit from the pandemic.

• “I think it deserves an extra amount of scrutiny because when she did the first round of sales after she got nonpublic information, she also bought a stock in a telecommuting company,” said Jordan Libowitz, a spokesman for the group Citizens for Responsibility and Ethics in Washington, which filed a Senate ethics complaint against Loeffler and Burr last month.

Read the full story here.

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