Once Again, Foes Of A Looming Progressive Dictatorship Are Depending On An Unethical Pol To Save Them


It would be nice if Senator David Perdue, one of two Republicans in Georgia Senate run-offs that will determine whether the Democrats’ last four years of sabotaging President Trump’s Presidency is considered a success or a failure, was an ethical, trustworthy official. But as if Perdue already didn’t have enough obstacles to winning re-election, like the ridiculous attempted boycott of the run-offs some Republican wackos are pushing (the boycott plan narrowly beating out holding their breath and setting their heads on fire as alternatives to voting), there is also this: he appears to be among the worst of Congress’s inside traders.

I’ve written a lot about this ongoing scandal. (The chart above is from one of the earliest posts.) The practice continues because both parties’ members make so much money from it that they refuse to police themselves adequately. Perdue is just the latest offender to come under public scrutiny. This time, the motivation for the exposure is the critical nature of the Georgia races, prompting the now open and obvious committed ally of the Democratic Party, the New York Times, to do a front page hit job on the Senator their Dark Masters have to destroy. But just as being paranoid doesn’t mean they aren’t out to get you, being biased doesn’t mean you can’t be right. The Times article about Perdue is damning, and not especially surprising, since I would believe the same of most members of Congress. This is literally sanctioned corruption, and has been for a long, long time.

From the Times article:

“As a member of the Senate’s cybersecurity subcommittee, David Perdue has raised alarms that hackers from overseas pose a threat to U.S. computer networks. Citing a frightening report by a California-based company called FireEye, Mr. Perdue was among the senators who asked this spring that the National Guard prepare to protect against such data breaches.

“Not only was the issue important to Mr. Perdue, so was FireEye, a federal contractor that provides malware detection and threat-intelligence services. Beginning in 2016, the senator bought and sold FireEye stock 61 times, at one point owning as much as $250,000 worth of shares in the company…

“Last week, The New York Times reported that the Justice Department had investigated the senator for possible insider trading in his sale of more than $1 million worth of stock in a financial-analysis firm, Cardlytics. Ultimately, prosecutors declined to bring charges. Other media outlets have revealed several trades in companies whose business dealings fall under the jurisdiction of Mr. Perdue’s committees.An examination of Mr. Perdue’s stock trading during his six years in office reveals that he has been the Senate’s most prolific stock trader by far, sometimes reporting 20 or more transactions in a single day….”

“The Times analyzed data compiled by Senate Stock Watcher, a nonpartisan website that aggregates publicly available information on lawmakers’ trading, and found that Mr. Perdue’s transactions accounted for nearly a third of all senators’ trades reported in the past six years. His 2,596 trades, mostly in stocks but also in bonds and funds, roughly equal the combined trading volume of the next five most active traders in the Senate.”

There is much more. Many of Senator Perdue’s trades involved companies in a position to benefit from policy and spending decisions that were being considered by the committees and subcommittees of which he was a member. Nearly half of  Perdue’s FireEye trades occurred while he sat on the cybersecurity panel, which might have provided him with nonpublic information about companies like FireEye. While Perdue sat on that panel, FireEye landed a subcontract worth more than $30 million with the Army Cyber Command, which had operations at Fort Gordon in Georgia. In 2018, Mr. Perdue reported capital gains of up to $15,000 from FireEye trades.

In another episode, Perdue began buying stock in BWX Technologies, a Virginia-based company that supplies nuclear components for Navy submarines about a month before he took over as chairman of the Senate’s seapower subcommittee. Once there, he promoted adding a multibillion-dollar nuclear submarine of the type BWX Technologies provides components for. He reported earnings between $15,000 and $50,000 in capital gains when he sold that stock.

This is all, at very least, the appearance of impropriety, which Senators and Representatives are forbidding from engaging in. It’s not even a close call.

If the Republicans lose the Senate because enough voters are disgusted by this and refuse to trust a Senator who used his position to benefit financially, it is the party’s own fault. Republicans should police such conduct, and could. They apparently care more about their own riches than the fate of the nation.

25 thoughts on “Once Again, Foes Of A Looming Progressive Dictatorship Are Depending On An Unethical Pol To Save Them

  1. Looking on the bright side, he must be so busy trading he never has time to get on the Senate floor or in any hearing rooms?

    I’m surprised his reported gains are so small. Did he ever hit any really big wins?

  2. Some humorist (I don’t remember who) said something like “Take Congress, and take a pack of thieves, but then I repeat myself.”

  3. Before I even read the article, that graphic on the top is an absolute, unmitigated dumpsterfire.

    Average Households saw an average return of -1.5% from ’91-’96, Corporate Insiders saw an average return of 7.4% between ’75-’96, Senators saw an average return of 12.3% between ’93-98 and House Members saw an average return of 6% between ’85-’01.

    Not only are the dates not uniform (and there’s no legitimate reason for them not to be), but the date ranges aren’t even a uniform length of time, and some of them barely overlap. I can think of a couple reasons that someone’s average returns from 1975-1996 might be different than someone else’s returns from 1993-1998 without even broaching the concept of insider trading. Who the actual hell put those data points together as if they were meaningful?

    I said back in April that I could have cashed out my pension, bought a small car, lit that car on fire and saved money, because the market was doing so poorly. Currently, my year to date return is 13.02% (suck it, ’93-’98 senators). Dates are everything in finance.

    • HT, the returns are relative to over all market performance. I.e., some people beat the market and average households did not. These are not returns per se.

      • You’re right, and I feel moderately sheepish now.

        I’m still irate at the data. There is literally no reason not to have uniform timeframes here unless someone is baking the books. Annual financial disclosures have been required since the Ethics in Government Act of 1978. If you wanted to run figures from 91-96, you could do that.

        I would hazard to guess that these dates were cherry-picked as being egregiously bad. It’s obvious, and it has been for some time, that insider trading is bad in the senate, but if they were actually as bad as the Money Morning Staff displayed, they wouldn’t have to play that game.

        • Didn’t the tech bubble burst right around 2000? So the data for the Senate would be just about at the peak of the tech market, and for the House right after the bust. I don’t know what the average market yield is, except it seems like we used to be told to look for 5%. That doesn’t make the inside traders look very insiderish.

          That said, I really would like to see a true apples to apples comparison for these groups. And does the Times say what Perdue’s overall performance was?

          This facet is one reason a lot of Senators and Representatives end up a lot more affluent after their term in office is complete. I would venture to say that the same may be true of a lot of staffers as well.

          • OK, now that I look at the chart a third time, I see the caveat about relative to market performance. It makes a bit more sense that way. Like HT we’d still need a comparison with the same time period to really have a serious sense of this data.

            So, between the three of us have we completely muddied the waters here?

            • The chart “obviously” says: In various time periods, corporate insiders and their similarly situated peers in Congress have significantly outperformed the market in their stock holdings and tradings while in one other time period, American families underperformed the market in their stock holdings. There! Hah!

    • I’m sorry to see your investments are doing so poorlY, HT. 😉 You got 13.02 YTD, but the S&P is 17.46. By that measure, you’re 4.44 below market. Don’t even look at DJIA or NASDAQ; you’ll make yourself sick.
      I got a gentleman’s C in the only economics course I ever took, and that was a gift (one more factoid confirming that I’m a dumbass, as has been noted here), but I’m nearly double the S&P return YTD, thanks to a buy and hold strategy and a lot of luck. I don’t have close friends in business or finance, so no insider info, which pretty much is useless in ‘buy & hold’.
      But, you hit the nail on the head noting the different time frames, which calls the whole thing.into question. Ant, there are studies showing members of Congress do not do all that well in the market.
      Almost makes one think someone is cherry picking data to make a point.

      • It’s really simple. It is unethical for members of Congress to buy or sell stocks that their decisions can affect, or of companies that their positions provide special information regarding. Ethically, it is irrelevant whether these unethical practices are profitable or not. That’s moral luck only.It’s a conflict of interest and creates the appearance of impropriety.

        • No disagreement there, and that’s why the chart is far less significant than the facts that show a link between inside information and trading.

        • Absolutely true, and are they so inept at stock trading that even with insider information they can’t make a killing? /sarc

          Good thing, though, that we’re not electing them for their brains, eh?

      • I deserve that. I considered buying and to be fair I held everything I had, and I knew deep down that it was a great time to buy equity, I just couldn’t pull the trigger. I think I was just so turned off by my Q1 losses, and I thought the market was so volatile that I threw most of the new money to precious metals. I also hold what is probably a disproportionate amount of equity in Canadian firms, which are doing great, but it’s really the American markets that are booming.

        Regardless, Jack says it below. Self-dealing politicians, whether they’re good at self-dealing or not, are still a problem. I just get my hackles raised at garbage data.

  4. This brings to mind the apocryphal quote often credited (dubiously) to Mark Twain: “Politicians are like diapers. They need to be changed regularly and for the same reason.”

    • I remember my Torts professor in 1978, apropos of likely nothing related to anything on the syllabus, marveling how politicians went off the Washington, D.C. and always managed to come back extremely wealthy.

        • Personally, I find the Gores and Kerrys of the crew the most repellant. They are trust fund babies when they get there and then they figure out ways to really ramp up their net worth while in Congress. That’s major league grifting, more so than the Clintons Obamas who arrive there with little more than their credentials and, er, over-arching ambition. And end up spectacularly wealthy!

  5. So the spelling error in the title had me deeply confused for a second. I seriously wondered if there was a like a famously unethical Polish guy involved in conservative American politics.

  6. The net worth of anyone entering political life should be revealed. Their net worth when they leave political life should be revealed. The difference should be revealed. Explanation for the difference should be examined by forensic accounting.

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