Exclusive: Watchdog files complaint with SEC accusing GOP Sen. David Perdue of insider trading

This is not the first time Perdue has come under scrutiny for allegations of insider trading

By Roger Sollenberger
November 20, 2020 3:19AM (UTC)
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Sen. David Perdue (R-GA) (Drew Angerer/Getty Images)

A watchdog group filed a complaint on Thursday with the Securities and Exchange Commission (SEC) alleging that Sen. David Perdue, R-Ga., abused his office to enrich himself through insider trading.

The allegations stem from a Wednesday report in the Daily Beast, which described Perdue's investment in a company that makes submarine parts. Perdue sold that investment for a healthy profit while he took the lead on a funding bill which eventually awarded lucrative defense contracts to the same company.

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In 2019, shortly before he was appointed as the chair of the Senate Armed Services Subcommittee on Seapower, Perdue invested $190,000 in BWX, one of only two or three companies contracted to make key parts for Virginia-class submarines. Perdue, the multimillionaire former CEO of Dollar General and a highly active stock trader, had never invested in the company before, according to the report.

Perdue then began work on the funding bill, which ultimately secured $4.7 billion of government funds for Virginia-class submarines. He was reportedly "hand-picked by party leadership to hammer out the final version of the bill between the House and Senate."

BWX stock rose while Perdue pushed for the funding, and he sold his shares for tens of thousands of dollars in profit, according to his 2019 financial disclosure forms.

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Perdue's office told The Beast that his investment portfolio was managed by third-party advisers, and the senator does not make these trades himself. The explanation echoed the campaign's response to a separate round of insider-trading accusations earlier this year.

"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," a spokesperson told the outlet. "No amount of lies from liberal media outlets or Democratic political groups will change that fact."

But Kedric Payne, senior director of ethics at the Campaign Legal Center, the nonpartisan group which advocates for transparency in politics, said the events showed why many lawmakers tend to avoid trades — even if they hand off responsibility to outside advisers.

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"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," Payne told The Beast. "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."

"If you believe it is mere coincidence that Senator Perdue bought and sold stock in this company while he was drafting legislation to award it billions in federal contracts, I have a bridge to sell you," Brad Woodhouse, president of the American Democracy Legal Fund, the group which filed the SEC complaint against Perdue, told Salon in a statement.

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"Instead of using his chairmanship to strengthen the Navy and protect the brave men and women who serve in our armed forces, Senator Perdue used the position to make money for himself," Woodhouse said. "The Securities and Exchange Commission must begin an immediate investigation into this clear case of insider trading by Senator Perdue."

This is not the first time Perdue has come under scrutiny for allegations of insider trading. The Daily Beast reported in September that Perdue appeared to have capitalized on debit card regulations he had worked to weaken.

And this spring, Perdue, along with several other lawmakers, including fellow multimillionaire Georgia Republican Sen. Kelly Loeffler, was swept up in an insider trading scandal related to tens of thousands of dollars in stock purchases made on the day he received a private Senate briefing on the coronavirus pandemic in January.

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The Department of Justice and the Senate both launched investigations into the trades in the spring, and Perdue was exonerated in September. Loeffler, his colleague, was cleared of the same allegations in May, shortly after her husband, the chair of the New York Stock Exchange, made a $1 million contribution to a pro-Trump super PAC.

Perdue and Loeffler both face runoff elections in January. The races will determine whether Democrats or Republicans will control the U.S. Senate.


Roger Sollenberger

Roger Sollenberger is a staff writer at Salon. Follow him on Twitter @SollenbergerRC.

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David Perdue Elections Georgia Insider Trading Jon Ossoff Kelly Loeffler Pentagon Politics Republicans Senate