New reporting has found that Rep. Dan Crenshaw (R-Texas) traded stocks for the first time as a member of Congress during March 2020, while Congress was negotiating and voting on the CARES Act.
Crenshaw bought six stocks in March 2020, five of which he bought between March 25 and 27, the days that both chambers of Congress voted on and passed the CARES Act, The Daily Beast has found. He failed to disclose these buys at first, in violation of the STOCK Act, which makes it illegal for members of Congress to participate in insider trading and requires them to disclose stock transactions.
It wasn’t until December, months after the stock purchases, that Crenshaw disclosed the value of the buys. They are reported in a range, The Daily Beast writes, and the maximum value is $120,000. His office disputes this figure, and says it’s “around $30,000 at most.”
Though Crenshaw’s reported stock buys don’t total to as much as the headline-grabbing millions that former Senators Kelly Loeffler (R-Georgia) and David Perdue (R-Georgia) had traded around the time the pandemic was setting in, it’s still nothing to sneeze at. Even $30,000 is only slightly less than the mean annual income of $34,103 in the U.S.
The stock market experienced a huge crash on March 12, 2020, which marked the sixth worst crash of all time for the Dow. That was the day that, according to records analyzed by The Daily Beast, Crenshaw bought between $1,001 and $15,000 in Amazon stocks. Then, while Congress was passing the CARES Act, he bought a similar value of stock each in Southwest Airlines, Boeing, two energy companies and an index fund that matches the performance of the S&P 500.
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Crenshaw joins a cohort of both Republicans and Democrats who previously disclosed at least 1,358 transactions between March and April, though Senators Loeffler and Richard Burr (R-North Carolina) faced particular scrutiny last year for their transactions of millions of dollars potentially qualifying as insider trading. None of the lawmakers ended up facing criminal charges.
All of Crenshaw’s investments have been successful, The Daily Beast finds, with Amazon, which was one of the more profitable stock buys for him, now at over 1.5 times the value that it was when Crenshaw bought it. Boeing’s stock was also one of Crenshaw’s more profitable buys, having grown 38 percent since he acquired it.
Boeing had lobbied heavily for $17 billion of the CARES Act to go to them, and the day Crenshaw bought the stock, it led the board in losses.
Though Crenshaw’s buys may not explicitly be illegal, experts told The Daily Beast that his stock trading raises ethical questions. “Members of Congress should not be actively trading securities in the middle of a crisis,” said Ben Edwards, a securities law expert and law professor at the University of Las Vegas Nevada. “It shows that when the market crashes, that person is thinking about themselves and using the volatility to their own advantage,” Edwards told The Daily Beast.
A Washington Post business reporter, Hamza Shaban, pointed out that Crenshaw’s initial refusal to report his stock trades and the opacity around how much he traded is a failure of the system. The story “highlights the layers of dysfunction behind the idea of self-disclosures and the limits of accountability through transparency,” Shaban wrote on Twitter.
Revelations behind stock trades during the pandemic have also led some political observers and politicians to be critical of the fact that members of Congress can participate in stock trades at all while in office.
Last year, Annie Lowrey of The Atlantic wrote that, though the stock trades may not be explicitly illegal, the erosion of public trust that they create is harmful in and of itself. “The fix here should not be in a specific parsing of individual portfolios and communications, but in a broad rule designed to bolster public confidence in the country’s political institutions,” Lowrey wrote in March. “Members of Congress — with or without inside information — simply should not be allowed to trade stocks.”
Sen. Elizabeth Warren (D-Massachusetts) has also taken action on stock trading within Congress. Late last year, after revelations about the trading that Loeffler and Perdue participated in, Warren and Rep. Pramila Jayapal (D-Washington) introduced a bill to bar lawmakers from owning or trading stocks at all while in office.