Stock Trades Reported By NJ Congressional Reps Show Possible Conflicts

NEW JERSEY — A New York Times investigation published recently raises conflict-of-interest questions about whether 97 sitting members of Congress, including four representing New Jersey, acted on insider information from their committee work when they or immediate family members sold stock, bonds or other financial assets.

The Times notes there are few restrictions when it comes to members of Congress buying or selling stocks. The Times said the officials cited in the report defended the transactions as proper.

The newspaper analyzed nearly 3,700 trades reported by lawmakers from both parties that posed potential conflicts between their public responsibilities and private finances over a three-year period from 2019-2021.

The Times investigation found that in New Jersey, the four lawmakers owned various amounts of stock, and each faced possible conflicts of interest.

In some cases, The Times said it found transactions were routine and the connection to any possible influence was tangential but in others, it was more blatant.

Congress has long been criticized for not imposing stricter regulations on stock trading by its members, despite the potential for conflicts of interest.

Here’s the full list of NJ lawmakers named in The Times investigation:

Josh Gottheimer: The report states that Gottheimer frequently bought and sold stock and options of Microsoft, where he worked as a senior manager before joining Congress. Two transactions, made in late 2021, were each worth $5 million to $25 million. During that time, Gottheimer served on the Homeland Security Committee, which was holding hearings on cybersecurity issues. "As a member of the Financial Services Committee, Mr. Gottheimer, along with his spouse, also bought and sold numerous bank and brokerage stocks, including JPMorgan Chase, Wells Fargo, Stifel and BBVA," the report stated. Gottheimer co-sponsored a bill that would further restrict member trading. Reported trades in 326 companies; 43 potential conflicts

Tom Malinowski: According to the Times report, Malinowski "shorted — or bet on a decline in the shares of — Carnival Corporation, Ferrari and Tesla in 2019 and 2020 while sitting on the House Committee on Transportation and Infrastructure." The Congressman did not file transaction reports for his trades in those years and became the subject of an Office of Congressional Ethics inquiry in early 2021. "That July, the same month the ethics office referred the matter to the House Committee on Ethics, he placed his assets into a blind trust. The committee said last year that it was still reviewing the Malinowski filing issues." The Office of Congressional Ethics released its report in October of last year and came to the conclusion that Malinowski had no knowledge of the trades. Reported trades in 82 companies; 3 potential conflicts.

Frank Pallone Jr.: "Mr. Pallone, the longtime ranking Democrat on the House Energy and Commerce Committee, reported in August 2021 that his wife had sold all of her shares in two energy companies," the Times reported. Reported trades in 9 companies; 2 potential conflicts.

Mikie Sherrill: Sherrill reported buying and selling shares of defense contractors while she was a member of the House Armed Services Committee, according to the report. "She also sold shares of Alphabet and Meta in 2019 while she was the chairwoman of the oversight subcommittee of the Science, Space and Technology Committee, which has held hearings about online disinformation," the Times report said.

In February 2020, Sherrill and her husband sold off their individual stocks. She was also late to report sales of shares in the investment bank UBS, where her husband was employed, the report said. Reported trades in 179 companies; 12 potential conflicts.

Malinowski's spokesperson Naree Ketudat told Patch that the current financial disclosure system is primed for "partisan exploitation" and the Congressman would like to see a simpler requirement put in place that would eliminate any suggestion of impropriety. “The Office of Congressional Ethics found no improper conduct by Congressman Malinowski, other than late paperwork filings. Congressman Malinowski has already gone above and beyond the requirements of the law by placing his life’s savings into a qualified blind trust — that is why he also supports and is sponsoring the ban on member stock trading," Ketudat said.

Gottheimer told Patch he turned over management of his retirement savings and investments to a third party, who has full investment discretion. "Throughout my time in Congress, decisions related to my managed investments have been made at the direction of that third party," Gottheimer said. "I don’t believe Members of Congress, judges, or any government employee in a policy role, should be involved in the day-to-day trading of securities, including cryptocurrencies. Now, I am taking the extra step of setting up a blind trust. Additionally, I have also been working closely with Congresswoman Spanberger on her bill, TRUST in Congress Act, which I'm also co-sponsoring. That legislation will require Members of Congress to place any stocks or bonds in a blind trust to ensure they have no direct involvement in their investments. I have also urged Rep. Spanberger to broaden her legislation to cover judges and all government employees who are involved in procurement or federal policymaking.”

Sherrill and Pallone did not respond to Patch's request for comment.

» Read the full investigation on the New York Times and see the full list of lawmakers named.