U.S. Sen. Kelly Loeffler says she will no longer invest in stocks for individual companies, an attempt to push past the criticism she faces about transactions made on her behalf during the coronavirus pandemic.
Loeffler made the announcement in an opinion piece published by the Wall Street Journal. In it, she blames backlash to her recent investments on political opponents and the media. She said her and her husband's wealth, expected to surpass $500 million, will now be invested in funds that are not tied to the performance of a single company.
“... I am taking action to move beyond the distraction and put the focus back on the essential work we must all do to defeat the coronavirus,” the senator wrote. “Although Senate ethics rules don’t require it, my husband and I are liquidating our holdings in managed accounts and moving into exchange-traded funds and mutual funds.”
Nate Brand, spokesman for the National Republican Senatorial Committee, which has endorsed Loeffler, joined her in accusing news media of causing her troubles. He said Republican voters were never concerned.
“Grassroots support from Republicans in Georgia and the NRSC have not wavered, because Senator Loeffler has been working around the clock to keep Georgians healthy and safe and provide much-needed relief to families and businesses during this pandemic,” Brand said in a statement.
Loeffler has denied wrongdoing from the start, saying that financial advisers made these decisions about her investments independently and without her input.
However, Loeffler’s rivals from both sides of the aisle said that her announcement is not enough to quiet their criticism.
“We’re not buying it,” said Dan McLagan, campaign spokesman for U.S. Rep. Doug Collins, a Republican who is challenging Loeffler.
“This is essentially a guilty plea, and Georgians who just saw their retirement plans crater while she profited are not going to agree to the plea deal,” he said.
Collins’ team and the Democratic party both questioned why Loeffler did not agree to put her assets in a blind trust that would ensure she had no control over investment decisions. A spokesman for the Democratic Party of Georgia also said that her past transactions still should be investigated.
“Georgia voters deserve answers about why Senator Loeffler and her husband sold off millions worth of stocks and invested in a medical supplies-producing company and a teleworking company while publicly downplaying the coronavirus threat,” Alex Floyd said. “Rather than doing damage control, Senator Loeffler should commit to a full Senate Ethics Committee investigation and start being honest with Georgians.”
Loeffler’s husband, Jeff Sprecher, is chairman and founder of Intercontinental Exchange, which owns the New York Stock Exchange. Before she was appointed to the U.S. Senate in December, Loeffler served as the head of an ICE subsidiary.
The criticism about her stock transactions started the day The Daily Beast reported about trades dating from Jan. 24, the same day that Loeffler attended a senators-only briefing on the coronavirus.
The couple invested in companies like Citrix, which provides work-from-home software, and Oracle, a computer technology company. They also sold off $1.8 million in stocks.
More recently, a report filed on March 31 detailed additional transactions that include $18.7 million in sales of ICE stock that Loeffler and Sprecher said was part of their compensation agreements.
During that same period, they also sold off shares in retail stores like Lululemon and T.J. Maxx and invested in a company that makes COVID-19 protective garments.
Loeffler used the Journal essay to identify for the first time the firms she said were responsible for making the transactions: Goldman Sachs, Morgan Stanley, Sepio Capital and Wells Fargo.
She said her agreements with these advisers have been in place for years as she and Sprecher worked to avoid any perception of insider trading.
Loeffler said in her op-ed that the Jan. 24 briefing on COVID-19 did not contain private information and mainly consisted of senators posing questions to the public health officials in attendance.
Government watchdog groups have filed complaints asking the Senate Ethics Committee, the Securities and Exchange Commission and the Justice Department to investigate trades made by Loeffler and other senators who have actively traded stocks during the health crisis.
Democrats and securities law experts have also advocated for changing the law to prohibit members of Congress from purchasing stock in individual companies in order to avoid accusations of insider trading.
Blind trusts were also an option. Loeffler told business leaders in Savannah this week that she was considering the option, although it appears that she decided to put her money in mutual and exchange-traded funds instead.
“I’m not doing this because I have to,” she wrote. “I’ve done everything the right way and in compliance with Securities and Exchange Commission regulations, Senate ethics rules and U.S. law. I’m doing it because the issue isn’t worth the distraction.”
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