Sen. David Perdue had never invested in the Navy supplier BWX Technologies until right before he assumed control of the Senate Armed Services Subcommittee on Seapower.
Sam Brodey
Congressional Reporter
Updated Nov. 18, 2020 8:31PM ET / Published Nov. 18, 2020 8:30PM ET
Right before he was put in charge of a powerful Senate subcommittee with jurisdiction over the U.S. Navy, Sen. David Perdue (R-GA) began buying up stock in a company that made submarine parts. And once he began work on a bill that ultimately directed additional Navy funding for one of the firm’s specialized products, Perdue sold off the stock, earning him tens of thousands of dollars in profits.
In January 2019, Perdue was named as the chairman of the Senate Armed Services Subcommittee on Seapower. It was good home-state politics for Perdue: Georgia is home to one of the most important Naval facilities on the East Coast, the Kings Bay Naval Submarine Base. And his appointment was seen as a win for the submarine segment of the Navy, with trade publications calling it a “coup” for submariners.
But in the month before he took over the job, Perdue did something unusual: he acquired up to $190,000 worth of stock in BWX Technologies, a company he had never invested in before. The Virginia-based firm had lucrative contracts with the U.S. Navy to develop high-tech components for its fleet of nuclear submarines—and it was looking to expand that business when lawmakers took on the 2019 version of the sweeping annual legislation that sets funding benchmarks for the U.S. military, called the National Defense Authorization Act.
Perdue would have a key role in shaping the NDAA as Seapower chairman, and later as one of the few lawmakers hand-picked by party leadership to hammer out the final version of the bill between the House and Senate. By the time the bill passed the Senate in June, Perdue touted several wins—one of which was securing $4.7 billion for Virginia-class submarines. As it happens, BWX is one of two to three vendors with Pentagon contracts to design and make key parts for Virginia-class submarines, including nuclear reactors that power them and the systems that launch missiles from the submarines.
From February to July, as he was shaping the defense bill and working for that submarine funding, Perdue reported selling off all his shares of BWX—reaping a healthy profit in the process. The senator’s final financial disclosure form for the year 2019 reported earnings of $15,000 to $50,000 in his trading of BWX. Due to the way congressional financial disclosures are structured—they ask lawmakers to classify the value of their assets in broad categories, not specific amounts—it is not possible to know the exact dollar value of Perdue’s profits, or that of his purchases and sales of stock. But the company’s stock price also rose from the time Perdue first bought, in December and January, through the six-month window during which he sold off the shares.
https://www.thedailybeast.com/sen-d...ly-timed-stock-trades-are-completely-innocent
Scott Amey, the general counsel of the Project on Government Oversight, a nonpartisan good-government advocacy group, said it’s concerning that a lawmaker like Perdue would invest in a defense stock out of the thousands of stocks available, given his specific responsibilities on the Armed Services Committee.
“Members have inside information about our national security and defense spending, and personally benefiting from that information should be banned,” Amey said.
In response to inquiries from The Daily Beast about this activity, Perdue’s office referenced past scrutiny of the senator’s stock trading, insisting that he does not have anything to do with his investment portfolio.
“This has been asked and answered—Senator Perdue doesn’t manage his trades, they are handled by outside financial advisors without his prior input or approval,” said a Perdue spokesperson. “No amount of lies from liberal media outlets or Democratic political groups will change that fact.” Perdue is defending his seat in a runoff election set for January 5, which will help decide control of the Senate.
Perdue’s investment in BWX is not the first time the senator, one of the most active stock traders in Congress and one of its wealthiest members, has engaged in conspicuously timed trading.
In 2017, the Georgia Republican purchased stakes in an Atlanta-based prepaid debit card provider called FirstData weeks after he pushed to overturn federal regulations affecting the sector, The Daily Beast reported in September. Through 2019, Perdue reported buying and selling shares in FirstData around key moments affecting the company’s value. His office denied that he acted improperly, calling any allegations to that effect “categorically false.”
To outside experts, the BWX trading activity is just another example—albeit from the same politician—to implement much stricter rules around lawmakers’ stock activity. A 2012 law called the STOCK Act prevents members from engaging in financial activity with any nonpublic knowledge they receive in their official capacities. While it was hailed as a breakthrough for good government, it’s proven so difficult to prosecute anyone for violations under the law that some critics have called it unenforceable.
Kedric Payne, who analyzes stock trades at the Campaign Legal Center, a nonpartisan money-in-politics advocacy group, said Perdue’s example is the very reason why many lawmakers avoid trading individual stocks.
“It is nearly impossible to make decisions affecting an industry and then receive a personal financial benefit without appearing to have a conflict of interest,” said Payne. “Even if officials rely on financial advisors to make trading decisions on their behalf, the perception of conflicts of interest remains because the public does not know if there are winks and nods prompting the trades.”
Though Perdue’s office has maintained that a third-party investment adviser carries out his trades, the senator has rejected the use of a blind trust for his assets, which would put to bed any questions about his potential influence over trades.
It’s not uncommon for lawmakers to own stock in companies that could be affected by their policymaking actions—the practice is not prohibited, so long as lawmakers are not trading on nonpublic information. But Perdue’s activity is unusual in how his leadership of a very niche subcommittee lined up with his investment in a company squarely within that niche—just as work began on the federal legislation most important to that company’s bottom line. BWX certainly thought so: it spent $1 million lobbying Congress over the NDAA in 2019, and after it passed, company brass called the legislation proof of “positive traction” for its programs during an August earnings call.
At the very least, Perdue’s trades create the appearance of a conflict of interest, ethics experts say, and leave broader questions about whether he was profiting off his legislative activity.
Sam Brodey
Congressional Reporter
Updated Nov. 18, 2020 8:31PM ET / Published Nov. 18, 2020 8:30PM ET
Right before he was put in charge of a powerful Senate subcommittee with jurisdiction over the U.S. Navy, Sen. David Perdue (R-GA) began buying up stock in a company that made submarine parts. And once he began work on a bill that ultimately directed additional Navy funding for one of the firm’s specialized products, Perdue sold off the stock, earning him tens of thousands of dollars in profits.
In January 2019, Perdue was named as the chairman of the Senate Armed Services Subcommittee on Seapower. It was good home-state politics for Perdue: Georgia is home to one of the most important Naval facilities on the East Coast, the Kings Bay Naval Submarine Base. And his appointment was seen as a win for the submarine segment of the Navy, with trade publications calling it a “coup” for submariners.
But in the month before he took over the job, Perdue did something unusual: he acquired up to $190,000 worth of stock in BWX Technologies, a company he had never invested in before. The Virginia-based firm had lucrative contracts with the U.S. Navy to develop high-tech components for its fleet of nuclear submarines—and it was looking to expand that business when lawmakers took on the 2019 version of the sweeping annual legislation that sets funding benchmarks for the U.S. military, called the National Defense Authorization Act.
Perdue would have a key role in shaping the NDAA as Seapower chairman, and later as one of the few lawmakers hand-picked by party leadership to hammer out the final version of the bill between the House and Senate. By the time the bill passed the Senate in June, Perdue touted several wins—one of which was securing $4.7 billion for Virginia-class submarines. As it happens, BWX is one of two to three vendors with Pentagon contracts to design and make key parts for Virginia-class submarines, including nuclear reactors that power them and the systems that launch missiles from the submarines.
From February to July, as he was shaping the defense bill and working for that submarine funding, Perdue reported selling off all his shares of BWX—reaping a healthy profit in the process. The senator’s final financial disclosure form for the year 2019 reported earnings of $15,000 to $50,000 in his trading of BWX. Due to the way congressional financial disclosures are structured—they ask lawmakers to classify the value of their assets in broad categories, not specific amounts—it is not possible to know the exact dollar value of Perdue’s profits, or that of his purchases and sales of stock. But the company’s stock price also rose from the time Perdue first bought, in December and January, through the six-month window during which he sold off the shares.
https://www.thedailybeast.com/sen-d...ly-timed-stock-trades-are-completely-innocent
Scott Amey, the general counsel of the Project on Government Oversight, a nonpartisan good-government advocacy group, said it’s concerning that a lawmaker like Perdue would invest in a defense stock out of the thousands of stocks available, given his specific responsibilities on the Armed Services Committee.
“Members have inside information about our national security and defense spending, and personally benefiting from that information should be banned,” Amey said.
In response to inquiries from The Daily Beast about this activity, Perdue’s office referenced past scrutiny of the senator’s stock trading, insisting that he does not have anything to do with his investment portfolio.
“This has been asked and answered—Senator Perdue doesn’t manage his trades, they are handled by outside financial advisors without his prior input or approval,” said a Perdue spokesperson. “No amount of lies from liberal media outlets or Democratic political groups will change that fact.” Perdue is defending his seat in a runoff election set for January 5, which will help decide control of the Senate.
Perdue’s investment in BWX is not the first time the senator, one of the most active stock traders in Congress and one of its wealthiest members, has engaged in conspicuously timed trading.
In 2017, the Georgia Republican purchased stakes in an Atlanta-based prepaid debit card provider called FirstData weeks after he pushed to overturn federal regulations affecting the sector, The Daily Beast reported in September. Through 2019, Perdue reported buying and selling shares in FirstData around key moments affecting the company’s value. His office denied that he acted improperly, calling any allegations to that effect “categorically false.”
To outside experts, the BWX trading activity is just another example—albeit from the same politician—to implement much stricter rules around lawmakers’ stock activity. A 2012 law called the STOCK Act prevents members from engaging in financial activity with any nonpublic knowledge they receive in their official capacities. While it was hailed as a breakthrough for good government, it’s proven so difficult to prosecute anyone for violations under the law that some critics have called it unenforceable.
Kedric Payne, who analyzes stock trades at the Campaign Legal Center, a nonpartisan money-in-politics advocacy group, said Perdue’s example is the very reason why many lawmakers avoid trading individual stocks.
“It is nearly impossible to make decisions affecting an industry and then receive a personal financial benefit without appearing to have a conflict of interest,” said Payne. “Even if officials rely on financial advisors to make trading decisions on their behalf, the perception of conflicts of interest remains because the public does not know if there are winks and nods prompting the trades.”
Though Perdue’s office has maintained that a third-party investment adviser carries out his trades, the senator has rejected the use of a blind trust for his assets, which would put to bed any questions about his potential influence over trades.
It’s not uncommon for lawmakers to own stock in companies that could be affected by their policymaking actions—the practice is not prohibited, so long as lawmakers are not trading on nonpublic information. But Perdue’s activity is unusual in how his leadership of a very niche subcommittee lined up with his investment in a company squarely within that niche—just as work began on the federal legislation most important to that company’s bottom line. BWX certainly thought so: it spent $1 million lobbying Congress over the NDAA in 2019, and after it passed, company brass called the legislation proof of “positive traction” for its programs during an August earnings call.
At the very least, Perdue’s trades create the appearance of a conflict of interest, ethics experts say, and leave broader questions about whether he was profiting off his legislative activity.
