Finance

Oversight Left To Georgia Voters For Kelly Loeffler Short-Selling America Before COVID-19 Hit

Still, in any investigation, the Justice Department declining to bring charges doesn’t mean a person did nothing wrong.

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In perhaps the most consequential congressional runoff in modern history, Raphael Warnock is taking on incumbent Kelly Loeffler for one of Georgia’s two Senate seats. We’re all fatigued at this point by crowing about the historical importance of every upcoming election, but Georgia’s Senate runoff, scheduled for January 5, really does seem to live up to the hype. Along with a parallel Georgia Senate runoff between Jon Ossoff and incumbent David Perdue, the Warnock-Loeffler race will determine control of the Senate, and in turn, whether President-elect Joe Biden is likely to have a first term full of successes or one that is completely stymied by obstructionism.

Even beyond, you know, the future of American democracy, this Georgia runoff election is important for another reason. You’re forgiven if you don’t remember this, because every day of 2020 felt like a hundred years, but Loeffler was one of several U.S. senators who dumped significant investment holdings at a time when senators were being forewarned about the seriousness of the coming pandemic, but average U.S. citizens were not. Loeffler not only avoided falling off the stock market cliff that crushed retail investors in mid-March of 2020, she also ploughed some of her newly sheltered assets into shares likely to do well in COVID-19 lockdowns, like those of telework company Citrix.

To be fair, Loeffler was investigated by the Justice Department, and the Senate Ethics Committee, and was not charged with any legal wrongdoing. Of course, both the Senate Ethics Committee and the Justice Department were Republican-led at the time (and were ineffectual and hopelessly partisan, respectively) and this was just prior to the most contentious presidential election in recent memory. Loeffler’s Republican colleagues were champing at the bit to exonerate a senator who has repeatedly bragged of being “the only U.S. senator that has voted 100 percent with President Trump.” Perdue was also investigated by the Justice Department over his large volume of stock trading at the outset of the coronavirus pandemic, and he did not have any charges brought against him either.

Still, in any investigation, the Justice Department declining to bring charges doesn’t mean a person did nothing wrong. Sometimes there is not enough evidence to file a criminal action, sometimes a person does a horrible thing that is not technically illegal, sometimes Bill Barr decides to use the Justice Department to punish perceived enemies and reward political allies. The moral measuring stick in this country should not be (even if it is, at this particular moment in history): “I was not convicted of a crime; therefore, I have done nothing wrong.”

Loeffler is easily, based on known assets and financial disclosures filed with the Senate, the richest congressperson. She and her husband (who is chairman of the New York Stock Exchange and holds a significant ownership interest in its parent company together with Loeffler) have an estimated combined net worth of between $800 million and $ 1 billion. They don’t need money. Even if a Bill Barr-run Justice Department thought it was legal to get a bunch of insider information in your role as a U.S. senator about the economic toll COVID-19 was about to take, and to then make a number of very suspiciously timed stock trades to build an already-enormous fortune at the expense of other investors who didn’t know what was coming, it’s still not exactly a public service.

Congress has unsuccessfully bandied about laws to ban its members from owning individual stocks. People who regulate themselves tend to do a pretty bad job of it. But even if Congress won’t just ban senators from trading in individual stocks, senators shouldn’t be doing it anyway, and especially not right at the outset of a pandemic when the nature of their trades is pretty much the definition of the appearance of impropriety.

At this point, the Senate Ethics Committee is not going to hold Loeffler accountable. Neither is the Justice Department. The only group left with any agency, the very last check on Loeffler’s immense financial and political power, is Georgia voters. I hope they announce to the world, as 2021 dawns on January 5, that we’ve moved beyond the lax moral standard for our leaders that has taken root over the past four years. In the United States of America, just barely escaping criminal conviction should not be good enough.

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Jonathan Wolf is a litigation associate at a midsize, full-service Minnesota firm. He also teaches as an adjunct writing professor at Mitchell Hamline School of Law, has written for a wide variety of publications, and makes it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at jon_wolf@hotmail.com.

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