Questions are rising about the timing of a large investment in Tesla by the husband of House Speaker Nancy Pelosi (D-Calif.) shortly before President Joe Biden announced a project to make all federal fleet vehicles electric.
A watchdog group is pointing to a stock purchase last month made by Paul Pelosi, a multimillion-dollar venture capitalist who reportedly purchased up to $1 million worth of stocks in Tesla when the price of the company’s stock was about $640 a share. Late last week, the stock’s price had risen nearly $200 a share, closing Thursday at $838 on the NASDAQ.
“Tesla stock has been a darling of Wall Street for years, and the company stands to reap huge profits if the federal government moves to an all-electric fleet,” The Washington Times reported Friday.
The paper noted that the federal government has a massive fleet of vehicles — more than 645,000.
“It’s corrupt and unacceptable for members of Congress, particularly the speaker, to trade stocks in companies affected by their votes in Congress,” said John Pudner, executive director of TakeBack.org, a conservative group concentrating on pay-to-play corruption.
“Elected leaders from all political parties should live up to a standard of ethics that ordinary Americans see as vital to the country,” he added.
According to a recent financial disclosure filed by the speaker, the couple made 25 stock moves, which are known as call options, allowing her to purchase Tesla at $500 per share up to March 2022. The invested amount was as much as $1 million, the Times reported.
“The timing of the move proved fortuitous,” the paper observed.
A spokesman for the speaker said that her husband made the Tesla investments and that her political relationship with the administration was not relevant.
Still, in recent months Republicans were similarly accused of using so-called ‘insider information’ to make stock moves that bolstered their portfolio. They include Sen. Richard Burr (R-N.C.) and former Georgia Sens. David Perdue and Kelly Loeffler, though subsequent investigations found no evidence of wrongdoing regarding Perdue. Stock maneuvers by some Democrats were also questioned, the Times reported.
Lawmakers are prohibited under the Stop Trading on Congressional Knowledge (STOCK) Act of 2012 from using non-public information to profit in the markets and elsewhere. In addition to members of Congress, the law also applies to all government employees.
“Did Pelosi have insider knowledge that Joe Biden was going to replace the government’s vehicle fleet with American-made electric vehicles?” Matt Margolis of PJ Media wrote in a Thursday post.
“Without a doubt, such a thing would be difficult to prove,” he noted, adding that Biden’s ‘green’ agenda may have led people to invest in those technologies. “But that doesn’t make the purchase less suspicious, and an investigation to determine whether Pelosi broke the law is, at the very least, warranted here.”
“We know that mere disclosure of securities trades is not enough. The need for a stricter rule is abundantly clear,” noted Donna Nagy, a law professor at the University of Indiana, in an op-ed for Bloomberg Law, the Times reported.
James Trusty, a former federal prosecutor who currently works in the private sector specializing in insider trading cases, said a complete ban on trading by lawmakers would be best.
“Even if the actual charges are not provable beyond a reasonable doubt or trigger SEC action, the timing of trades with potential insider information always looks bad,” Trusty told the Times. “The best route for eliminating the problem would be to have true blind trusts imposed while people serve in Congress. Not ‘peek-a-boo’ stories or anything murky, just a blanket rule while you’re in office so there’s not even a temptation to cash in on access to information.”
Sen. Elizabeth Warren (D-Mass.) reintroduced additional anti-corruption legislation last month including a ban on stock trades by members of Congress.
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