The Daily Beast
Representative Dan Crenshaw decided that the pandemic was the perfect time to buy and not disclose shares
Tom Williams / GettyRep. Dan Crenshaw (R-TX) did not buy or sell shares in his first 13 months as a congressman. That changed in March 2020, when he made half a dozen purchases while the largest economic aid package in history was written and debated. Five of those purchases took place in the three days between March 25 and 27, when the Senate and the House voted for CARES Ato and former President Trump sanctioned it. Crenshaw, who supported the bill, initially did not disclose the transactions, in violation of the STOCK Act, a law that requires members of Congress to inform the public when they engage in securities negotiations. Months later, he changed his records to reflect purchases. The negotiations, which are listed only in a range of values, add up to a maximum of $ 120,000, and do not compare in size or volume to the types of outstanding transactions carried out before the Sens pandemic. Kelly Loeffler and David Perdue. They only appeared in December, when Crenshaw amended its annual report, originally submitted in August. “You are referring to financial disclosures that use a banner to report stock purchases and are choosing the upper end of the banner to reach that value of $ 120,000,” Justin Discigil, director of communications for Crenshaw, told the Daily Beast by e -mail. “The actual number is about $ 30,000 at most,” said Discigil, and “in no way were your purchases unethical or related to official business.” The timing, however, coupled with Crenshaw’s own commercial history and its connections to the industry, raises questions about why he made the purchases and twice failed to disclose them. “Members of Congress should not actively trade securities in the midst of a crisis. It shows that when the market crashes, that person is thinking about himself and using volatility to his own advantage, “said Ben Edwards, a specialist in securities law and a professor at the William S. Boyd School of Law at the University of Las Vegas Nevada. “We all have a limited amount of attention, and if you have [an] I look at your stock portfolio, so you’re not giving this crisis or the American people all the attention they demand. Crenshaw, elected in 2018, had never traded individual shares in office until the crisis broke out, according to public records. Then, when global markets crashed on March 12, Crenshaw bought between $ 1,001 and $ 15,000 on Amazon. Two weeks later, while Congress was voting on the CARES Act, Crenshaw bought shares valued at the same price range in Southwest, Boeing, a manufacturer of energy infrastructure SPX and Kinder Morgan, a Texas-based company that specializes in pipeline construction. He also purchased an index fund linked to the performance of the S&P 500. While it is not clear why Crenshaw did not initially disclose the transactions, they came as an increasing number of high-profile lawmakers were being caught up in a scandal of trading with inside information. Except for the purchase from Amazon, all Crenshaw transactions took place a week after ProPublica reported that Senator Richard Burr (R-NC) had sold up to $ 1.72 million following private coronavirus briefings. On March 20, The Daily Beast reported that Loeffler and her husband had sold seven-digit shares after their first confidential pandemic briefings. The ballot soon fell on the negotiations carried out by Sens. David Perdue (R-GA), Jim Inhofe (R-OK), Dianne Feinstein (D-CA) and John Hoeven (R-ND), prompting investigations by the Department of Justice, the Senate Ethics Committee and the Securities and Exchange Commission. None of the lawmakers faced criminal charges. Perdue and Loeffler lost their re-election proposals to Democratic opponents Jon Ossoff and Rev. Raphael Warnock in the second round of elections in January this year. In response to the scandal, the Campaign Legal Center analyzed all Congressional stock negotiations made between February 2 and April 8, finding that a dozen senators made 127 combined transactions in the time period and 37 members of the House made at least 1,358 transactions. However, Texas representative Dan Crenshaw Dunks at the newly elected QAnon queen, Marjorie Taylor Greene Crenshaw did not appear in these media reports because he did not disclose his purchases. The STOCK Act, a 2012 law designed to prevent federally elected officials from negotiating on the basis of internal knowledge, requires Congress to publish all transactions within 45 days. Not only did Crenshaw fail to disclose transactions at the time, he also did not include them in his annual disclosure, filed in August. And while that process shows that Crenshaw owns the new assets, the form also requires members to list the transactions, including the dates, that Crenshaw left blank. They only appeared when the Lone Star Republican amended the annual report in December. Renshaw’s spokesman told The Daily Beast that the former Harvard student and former Navy SEAL had introduced this amendment “to fix clerical issues in their report, like making sure the dates were correct”. At the time of the transactions, Congress was struggling to create the CARES Act, a monumental emergency aid package that cost more than $ 2 trillion and which Crenshaw supported. The Republican-led Senate passed the bill on March 25, the day Crenshaw bought shares in SPX and the S&P 500 fund. The package was approved by the House the next day, when Crenshaw conquered Southwest and Kinder Morgan, and was sanctioned. by Trump on March 27, the day Crenshaw acquired its stake in Boeing. At the time, Crenshaw served on the House’s budget committees. and Homeland Security. Boeing, in particular, successfully lobbied heavily for a portion of the CARES Act, initially asking for $ 60 billion and then hoping to receive a slice of $ 17 billion that lawmakers have set aside for “business essential to maintaining national security. “. The non-partisan Institute of Fiscal and Economic Policy said at the time that it was “generally understood that the authors of the bill want a lot, if not all, of that $ 17 billion for a single company: Boeing.” But in late April, the manufacturer approved the deal, opting to raise $ 25 billion in private investments thanks to moves that the Federal Reserve made independently of the CARES Act. On the day Crenshaw bought Boeing, the markets burst its brief positive burst, and the company led the boards that day in losses. Its investment has already grown more than 38%. Boeing employee PAC donated $ 3,000 to Crenshaw’s 2020 campaign. All Crenshaw purchases showed returns, with the highest yields from Boeing, Amazon and Southwest Airlines. Amazon jumped from about $ 1,820 per share on March 12 to $ 2,979 today, and Southwest Airlines went up from about $ 41 to just over $ 60. would be among the hardest hit stocks in a global pandemic that has restricted air travel, ”said Edwards. “So in the short term they are going to be hammered, but in the long run, the sky will be choppy again.” This calculation includes the likelihood that the federal government will help keep the sector up and, in mid-April, airlines obtained their $ 25 billion bailout. Edwards said that while the limited information available makes it impossible to know why Crenshaw and other officials make specific trades, further reforms introduced in response to the commercial scandal would make such transactions impossible. “Some of the proposals to limit stock purchases would actually reduce activities like this. For example, Senator Warren’s plan would prohibit the purchase and sale of individual shares and would only allow members to track markets through index funds, ”he said. “Another proposal is to demand that legislators disclose their negotiation plans in advance, which executives of public companies already do. This would reduce the likelihood or suspicion that they are using private information or their own legislative powers to their advantage. ”Kedric Payne, senior director of ethics at the Campaign Legal Center, told the Daily Beast in November that lawmakers in public confidence should not risk even the appearance of having a personal financial stake in their government work. “It is almost impossible to make decisions that affect an industry and then receive a personal financial benefit without appearing to have a conflict of interest,” said Payne. “Even if employees rely on financial advisors to make business decisions on their behalf, the perception of conflicts of interest remains, because the public does not know whether there are winks and nods asking for negotiations.” Last week, Business Insider reported that Rep. Tom Malinowski (D-NJ), an advocate for transparency, did not disclose dozens of stock transactions throughout 2020. Malinowski, who likes Perdue – but unlike Crenshaw – says a third-party financial advisor independently runs his negotiations, said his time in the barrel has whetted his appetite for reform. “This reinforces my view that members of Congress should not invest in the stock market or, if they are, they should have no visibility of the shares they own,” Malinowski later told NJ.com. “Inevitably, even if decisions are made by an investment firm without input from the member of Congress, there may be this perception of influence because what we do in Congress affects all aspects of the economy.” Crenshaw does not currently have many stock individuals. In addition to the March negotiations, he owns only shares of Starbucks, Alphabet – Google’s parent company – and a small stake in Schlumberger, a global oilfield service provider based mainly in Europe, with a branch in Houston. The energy-dependent metropolis also hosts Kinder Morgan, but the offices of both companies are located off the lines of the gerrymandged district of Crenshaw. Business intersects with the work of the Crenshaw government, specifically in energy. The oil and gas industry contributed a total of $ 453,247 to its reelection efforts in 2020 and was its industry’s biggest sponsor in terms of PAC grants. And while that may not have represented a direct conflict of interest last year, it may no longer be the case: on January 21, the House Republican leadership removed Crenshaw from his duties on the Homeland Security and Budget committee and transferred him to the Energy and Commerce Committee. Read more at The Daily Beast. Got a tip? Submit to The Daily Beast here. Get our top stories in your inbox every day. Subscribe now! Daily Beast Membership: Beast Inside goes deeper into the stories that matter to you. To know more.