ATLANTA – Faced with a steady stream of reports of his well-timed stock trades, Senator David Perdue (R-GA) defends himself with a line that his greatest ally, President Donald Trump, has practically turned into a mantra.
“Totally exonerated,” says a recently released television ad by Perdue, which claims to have been fully authorized by the Department of Justice and the federal Securities and Exchange Commission.
Except that none of the agencies has this power.
The two agencies have investigated transactions made by Perdue at the start of the coronavirus pandemic, and both reportedly concluded those investigations without laying criminal or civil charges. But contrary to Perdue’s claims, that finding doesn’t amount to an exemption – because these agencies don’t explicitly issue them.
The Republican of Georgia, currently in the midst of a grueling campaign, has not provided any documentation to the public on government polls in his stock trading. Perhaps that’s because any messages Perdue might have received from the federal government would have likely painted a much more ambiguous picture of his business, securities law experts told The Daily Beast.
When closing a case, the SEC may notify the investigated entity that it “does not intend to recommend enforcement action.” But the message also includes a clear caveat that the notice “should in no way be interpreted as indicating that the party has been exonerated or that no action can result from the staff investigation.” Most of the time, say the defense attorneys who worked on the cases, neither agency issues a letter or notice of some sort that a case has been closed, letting them read the tea leaves to find out. what the investigators are preparing.
There is a significant difference between an exemption and a decision not to charge, experts say. “It’s good news for him, but it doesn’t exonerate him,” said Chris Bruno, a former DOJ prosecutor, who can lay criminal charges for insider trading. “It just means they haven’t been able to find any relevant evidence that would justify a case, at this static moment, beyond a reasonable doubt, and that’s different from someone’s exemption.” . They don’t say they’ve found evidence of innocence.
The SEC, which can take civil suits for financial rule violations, “is not in the realm of exemption,” said James Cox, professor of securities law at Duke University, who explained that the absence of charges against a person or a company may reflect a number of calculations.
The agency would rather not go to court without an overwhelming chance of success, Cox said. “Internally they look at these things and say, is this a 60-40 case, or a 90-10 case… They tend to be wrong on the 90% side.” Moreover, he said, the agency is very unlikely to “make an example of a sitting senator.”
Perdue’s office did not respond to a request for comment on the correspondence he received from federal investigators and why he claimed he had been fully exonerated. The SEC and DOJ did not return requests for comment.
But by playing a so-called “total exemption,” Perdue rips a page from Trump’s playbook – and in so doing, perhaps aims to bolster his appeal to the president’s voter base, which he and Senator Kelly Loeffler (R-GA) will have to present themselves en masse to win the second round of the January 5 elections.
Over the past four years, Trump has called for “total exoneration” hundreds of times, in response to everything from the investigation into Russia’s ties to his 2016 campaign to his 2019 attempt to secure political favors from Ukraine which resulted in his dismissal.
Loeffler, who came under similar scrutiny around his stock trading as Perdue, used the phrase and was even more explicit in using it to tie in with Trump. In May, she tweeted: “Just like @realDonaldTrump, I was completely and totally exonerated. For a message to Trump supporters, the message was clear: the scrutiny on me was wrong, as was the scrutiny on him.
“The echo there is pretty unmistakable,” a GOP strategist told The Daily Beast, speaking anonymously to discuss the strategy frankly. “The kind of phrase you would never use in this situation, except for a subtle reminder.”
During the second round campaign, both GOP senators felt compelled to put money behind ad campaigns claiming their stock transactions did not cross any legal or ethical lines. Both have come under close scrutiny by the press and federal investigators for months for their offloading of some inventory, and acquisition of others, around private Senate briefings related to the spread of the coronavirus in January.
A recent report in the New York Times found that in January, Perdue had personally called his independent broker and ordered him to sell $ 1 million in stakes in a financial company where he had previously served on the board. Perdue, a former corporate CEO who was by far the Senate’s most active stock trader, has also engaged in timely transactions in previous years. In 2018, for example, the Senator acquired shares in a U.S. Navy subcontractor as he took control of a Senate committee with jurisdiction over the Navy, and then sold the stock for a profit while he was working on a bill that directed new business. to the entrepreneur, The daily beast reported.
After the article was published, Representative Raja Krishnamoorthi (D-IL), chairman of the House Oversight Committee’s panel on finance, wrote to the SEC asking it to probe these transactions. The SEC declined to comment on the letter. It’s unclear whether or not their previous investigation of Perdue’s trades included its pre-coronavirus activity, although some experts say it’s likely that regulators would have looked at its investment history to discern patterns.
“They will follow where the evidence goes,” said David Chase, a Florida defense attorney and former SEC attorney, who said the agency refusing to lay charges says “they kicked foot in the tires and will not continue. “
At the same time, he clarified: “You will never get an exemption.
For Democrats, the fact that Perdue and Loeffler are devoting valuable campaign resources to defending themselves against these accusations – and in turn amplifying them to some extent – indicates that they have damaged the duo and voters are responding. Perdue has decided to skip a debate scheduled for Sunday with his Democratic opponent, Jon Ossoff, a move that will allow him to avoid any direct questions about his stock transactions. And Perdue has remained loyal to a friendly audience since the start of the second-round campaign, denying the national and local press the opportunity to ask questions about his trading and explanations.
There are Republicans and Democrats who believe, however, that the political impact of the stories will be minimal. The conventional wisdom surrounding the second round is that there are few voters in Georgia who are really on the fence, and victory for both sides depends on how many of their voters they can elect.
“This is an election with enthusiasm and not persuasion,” said Brendan Buck, former senior assistant to former President Paul Ryan (R-WI) and originally from Georgia. “We are past the moment to define ourselves … it is only shirts against skins, which can bring out confirmed Republican voters.
“We’re also in a time where it’s been proven time and time again that if you just walk through the scandal, people move forward pretty quickly,” Buck continued. “All [Perdue] must do is give his answer and attack the other side directly, because at the end of the day that will be the strategy … talking a lot more about his opponents, than talking about himself or about ideas or solutions or something like that.
And if Republicans can connect even more deeply with Trump in the process, some say, so much the better.
“It makes sense that you feel compelled to address it in your post that you draw a parallel with the President in a sort of coded way that could resonate with the people you need to make sure it comes out for you.” , the GOP strategist told The Daily Beast. “Trump provided the playbook – never explain or apologize, always declare victory and move on.”
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