Perfect timing
More investigative journalism from the Wall Street Journal is reporting on how federal officials working on the government response to COVID-19 made some "well-timed financial trades" when markets tanked and rallied at the beginning of the pandemic. In fact, March 2020 was the most active month for trading by officials across the federal government, including the Department of Health and Human Services, while some officials even started trading in January 2020, when the U.S. public was largely unaware of the threat posed by the coronavirus.
Some examples: Then-Transportation Secretary Elaine Chao scooped up more than $600K in two stock funds while her agency was involved in the pandemic response, while her husband, Republican Sen. Mitch McConnell, led negotiations for a market-enhancing stimulus bill. Similarly, a deputy to top health official Anthony Fauci, Hugh Auchincloss, sold off thousands of dollars in stock funds after learning about pandemic risks in January. Treasury's Jeff Goettman also bought Boeing ( BA) shares while being involved in administering the stimulus package for the planemaker, and invested in GE ( GE) before the company secured lucrative contracts to supply ventilators.
To be clear, it is very hard to convict lawmakers of insider trading, as agency ethics officials rarely have a full picture of what employees are working on or the information that they are privy to. Many of the rules center on the types of stocks officials can trade, not when they can trade, and there are no restrictions on diversified mutual funds or funds managed by external accounts. Another hurdle is proving the "material" part of "material non-public information," as well as events that happen on the macro scale (like the pandemic) or affect entire industries.
Go deeper: Members of Congress have a lot of privileged and classified information that could move stock prices, as well as financial incentives from companies that routinely lobby Congress. Those decisions could also play a role in how much a given stock is worth, and Congress sought to counteract that in 2012 by passing a bill known as the STOCK Act. While the legislation requires lawmakers to disclose trades within 45 days, many say it doesn't do enough to prevent insider trading and conflicts of interest. Another report by the WSJ last week centered around trades by government officials that invested in companies that lobbied their agencies for favorable policies. ( 8 comments)
  
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