As pandemic spread pain and panic, Dem congressman chased profit
May 21, 2021
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In the early days of the pandemic, New Jersey Rep. Tom Malinowski scolded those looking to capitalize on the health crisis, saying it was "not the time for anybody to be profiting" from selling goods to combat the pandemic.
The two-term Democrat did not heed his own admonition.
Since early 2020, Malinowski has bought or sold as much as $1 million of stock in medical and tech companies that had a stake in the virus response, records show. The trades were just one slice of as much as $3.2 million in trades he did not properly disclose.
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The issue of congressional stock trading took on a new urgency last year when at least three senators were the subject of inquiries about whether they made financial decisions based on insider information. Though no one was charged, their dealings stirred outrage and highlighted the limitations of the Stock Act, a 2012 law intended to curtail congressional stock trading.
Malinowski’s trades received little attention at the time. Yet his failure to report his activity to Congress as required by law, which was first reported by Business Insider, have made him the latest to face scrutiny.
He snapped up securities at bargain prices after markets plunged — profiting when valuations recovered. In other cases, he sold shares before they fell substantially, according to an analysis of a list of Malinowski's 2020 trades released by his office.
He also engaged in the controversial practice of short selling stocks, placing bets that the values of specific businesses would decline.
"It boggles my mind why he’s doing it," said Richard Painter, a University of Minnesota law professor who served as President George W. Bush’s ethics attorney.
There is no indication Malinowski acted on inside information. Still, it’s difficult to assess the full scope of his financial activity. Nearly six months after 2020 drew to a close, mandatory reports to Congress detailing his trades have not been made public.
In an interview Thursday, Malinowski said his broker handles all of his trading decisions and he does not speak to the firm about specific transactions. His office provided a statement from the firm stating that it made trades "without Congressman Malinowski’s input or prior knowledge."
"At no point in the last 25 years have I directed, suggested, or even asked questions about a particular trade being made by my brokerage firm," Malinowski said.
He also said he was in the process of setting up a blind trust to hold his financial portfolio, which he will have no control over.