Senator Loeffler Accused of Dumping Stock after COVID-19 Briefing

I believe the ghost of Lee Atwater is going to haunt U.S. Senator Kelly Loeffler this election year.

In case you don’t know, and we’re getting to a point where there are probably many who can’t remember, Atwater was a strategist for President Ronald Reagan in the 1980s. He was famous for running his mouth, at times inappropriately, along with being a brilliant consultant, something even his detractors readily admit. One of the phrases of his you may know well is, “in politics, perception is reality.”

It certainly is.

We are in a time of great upheaval, and if anyone says that’s not so, they’re fooling themselves. In the matter of a week, we have seen all of the gains of the stock market over the past three years vanish. We have seen Americans ordered to stay in their homes by way of shelter-in-place orders in both California and the City of New York as COVID-19 is marching its way now across our state. We have seen many people suddenly and unexpectedly out of work. We are watching people die quickly from this virus we don’t yet really understand as it’s in its infancy.

Members of the Legislative, Judicial, and Executive Branches of our federal government are often briefed on these kinds of threats and their potential impacts. This certainly happened with COVID-19. U.S. Senators on the HELP and Foreign Relations Committees received an Intelligence briefing regarding the virus on January 24th. (Senator Loeffler is on HELP; Senator David Perdue is on Foreign Relations.)

That same day, Senator Loeffler sold stock valued between $1.2 and $3.1 million that have seen the value of their shares reduced by half in the past week. She also bought stocks in a company called Citrix, whose slogan is, “Business continuity – on demand. Stop responding to business disruptions. Be ready for them.” The company focuses on teleworking. I don’t know about you, but I’m teleworking today and every day for the next two months at least.

So, was it insider trading? Elected officials are not allowed to profit off of their positions. Senator Loeffler has denied any wrongdoing.

Of course, it doesn’t look good. The purchase of Citrix is an awfully suspicious choice, even though she vehemently claims it’s coincidental.

It’s not as though market managers don’t pay attention to global events. They would have known by the end of January that China’s economy was tanking due to COVID-19. The People’s Daily had finally started reporting on it three days prior to the briefing. The Chinese government had locked down the city of Wuhan two days prior. Any avid reader of international news – which stock brokers must be – would be aware of these events and the kind of disruption this would signal. They would probably also be looking to see if there were any cases in the United States. The CDC confirmed the first case of COVID-19 in the country on January 21st in a patient who had recently traveled to Wuhan, China.

Senator Perdue also had some large stock sales after the briefing. His look far less egregious due to the fact that he stocked up (haha) on Disney and Delta, and neither of those are doing so great right now. Further, Lachlan Markay, the reporter at the Daily Beast who broke the story, notes Senator Perdue’s trades were already occurring before the briefing, making it unlikely there’s anything suspicious afoot with his behavior.

Of note, Markay’s thread is about the other senators facing questions about trades after the briefing – Richard Burr, Ron Johnson, and Diane Feinstein – and of those, he only sees issues with the trades of Senators Burr and Loeffler. The Washington Post helpfully has created a timeline for both Senators’ trades.

It also doesn’t look good that as Senator Loeffler (or her portfolio manager) was divulging herself of those problematic stocks, her public comments after the briefing on COVID-19 were way more upbeat than what other Senators took away from it and decided to tell their constituents. Now we know that those other Senators were right to warn their constituents so they could seriously prepare. Why was Senator Loeffler putting a Pollyanna glow on the situation? Tucker Carlson will reportedly be going in depth on this story on his show tonight on Fox News and has called for Senator Burr, at least, to resign, saying there is no greater moral crime. I can’t imagine he’ll have much different feelings about Senator Loeffler.

Personally, I think Senator Loeffler has terrible political instincts. I suspect she thought she could shrug this off and then spend enough money in commercials about her positives that the good people of Georgia would forget. Since she has said she knew about the trades on February 16th, why in the world would she not get out ahead of this issue? Perhaps she was banking on us being too busy trying to frantically tread water to notice.

I don’t know if Senator Loeffler is being honest about her trades or not. What I do know is that it probably doesn’t matter because the perception is the reality. As average Americans are suffering, any hint that their wealthy Senator is escaping the pain of COVID-19 by stepping on them is going to enrage them. Also, if you think Congressman Doug Collins is going to let this go anytime soon, oh boy, do I have a tweet for you:

Enter the Ghost of Lee Atwater. He’s going to haunt her from now until the election.


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