WASHINGTON — The odds of Rand Paul facing a penalty for his severely delayed disclosure of a stock purchase are slim, based on recent history of similar cases in the U.S. Senate.
The Senate Select Committee on Ethics, which oversees such lapses, hasn’t issued a disciplinary sanction in more than a decade, even after a flurry of questionable stock trades by members came to light last year amid the coronavirus pandemic.
On Wednesday, The Washington Post revealed that in late February 2020 Paul's wife bought stock valued between $1,000 and $15,000 in Gilead Sciences, which produces remdesivir — an antiviral used to treat COVID-19.
Just a couple weeks later, the coronavirus swept across the country, forcing the shutdown of offices, businesses and schools. Paul didn’t disclose his wife’s purchase until 16 months after the Senate’s 45-day requirement. His spokeswoman said the form was completed last year but somehow was lost in transmission.
“This is ‘the dog ate my homework’ excuse,” said Meredith McGehee, executive director of Issue One, a group monitoring congressional ethics issues. “In almost every instance, you get a confirmation. Oh, it was my wife, oh, the paperwork didn’t go through. As a public servant, you’re held to a different standard.”
But McGehee added, “They don’t feel any consequences for having been late, so who cares?”
Last year, the Senate Ethics Committee and the U.S. Justice Department launched several investigations of senators’ stock trading around the beginning of the pandemic. Former Georgia Sen. Kelly Loeffler, who is married to the chairman of the New York Stock Exchange, was probed for selling $20 million in stock after attending coronavirus briefings in January of 2020.
Republican Sen. Richard Burr of North Carolina was investigated for unloading more than two dozen stocks worth nearly $1 million in February of 2020, also just weeks before the coronavirus consumed the country. The scrutiny forced him to step down as chairman of the Senate Intelligence Committee.
The husband of Sen. Dianne Feinstein sold his stock shares in a biotech company in January of 2020, leading the FBI to question the California Democrat.
All of these cases were closed without any action.
“Obviously every senator and Senate employee has been ethical, if you get my sarcasm,” said McGehee.
Paul’s situation is similar in that in addition to the delayed reporting, the trade raises the question of whether he was the beneficiary of any private briefings or congressional information about the oncoming pandemic that would have triggered his wife’s interest in Gilead stock. Kelsey Cooper, Paul’s spokeswoman, told the Post the senator attended no briefings on the coronavirus pandemic.
On Thursday, CNBC reported that neither Paul nor his wife, Kelley, had bought an individual stock in at least 10 years before the Gilead purchase.
In a series of tweets on Friday, Kelly Paul said she made the investment based on publicly-available information:
“At the time I invested, the news was full of frightening images of Italian hospitals overrun with COVID. The head of the WHO publicly called Remdesciver a promising treatment, prompting my investment in what I hoped might be a cure,” Kelley Paul tweeted. “This information was in the news and public.”
She added: “Sadly remdesciver was not a cure, but my small investment in it, in which the stock price dropped after I bought it, was based on encouraging info from the WHO.”
Attorneys from the Campaign Legal Center have filed a formal complaint with the Senate Ethics Committee, requesting an investigation into whether Paul violated the Stock Act.
The 2012 law prohibits lawmakers and their staffers from buying and selling stocks based on information they learn through their congressional duties. The criminal statute provides for a fine of up to $250,000 and up to five years in prison for knowing and willing violations.
“The Stock Act does not excuse late filings. The harm of late filings is that they defeat the purpose of the Stock Act, which is real time disclosure of potential conflicts of interest and insider trading,” wrote CLC counsel Kedric Payne and Delaney Marsco. “Accepting his failure to timely file his (periodic transaction report) as merely an oversight requires an assumption that he was not aware of the intense public scrutiny that his colleagues Senators Richard Burr, Dianne Feinstein, and Kelly Loeffler faced in 2020 when their stock trades at the same time in February were revealed.”
The 4-page brief notes that Kelley Paul’s stock purchase came the day before Burr delivered remarks to a small group of business leaders in which he said the coronavirus transmission is “much more aggressive” than anything in recent history, comparing it to the 1918 pandemic.
“For these reasons, Sen. Paul cannot excuse his failure to report as a mistake with pushing the transmit button on the electronic form,” Payne and Marsco write.
Charles Booker, the leading Democratic candidate attempting to defeat Paul in next year’s midterm election, accused Paul of committing a crime and facilitating a cover-up.
“That’s why he needs to resign,” Booker said in a statement. “What kind of human being hears that there’s about to be a deadly pandemic that will kill thousands of people, and thinks to make a profit off of that suffering and despair?”
Resignation is a far-fetched outcome for Paul, who hasn’t yet been personally forced to address the issue.
It’s the Ethics Committee that holds the most power in gathering more information about the transaction and Paul’s steps to disclose it. But watchdogs are skeptical.
“Can they get away with it? Given the record of the Senate ethics committee, they probably will,” MeGehee said.
A spokeswoman for the Senate Ethics Committee, Shannon Kopplin, did not respond to an inquiry on whether there are plans to investigate Paul. An autoreply said Kopplin was out of the office through Aug. 22 with limited access to email.
