When Georgia’s Republican Governor Brian Kemp chose Kelly Loeffler to fill Johnny Isakson’s U.S. Senate seat after the veteran lawmaker stepped down for health reasons at the end of 2019, her vast wealth was very much on Kemp’s mind. As co-owner of Atlanta’s WNBA franchise, a former financial services company CEO, and the wife of the chairman of the New York Stock Exchange (and the founder and CEO of the Intercontinental Exchange, which owns NYSE), Loeffler could be expected to self-finance a 2020 special-election campaign and then — assuming she wins — a regular 2022 reelection campaign. Her money and her gender, thought to provide some appeal to the suburban women who have been turning against the GOP in recent Georgia elections, were important enough to Kemp that he ignored Donald Trump’s public and private demands that he give the Senate seat to his impeachment pit bull Doug Collins, a congressman and favorite of the MAGA crowd.
Collins (along with an assortment of Democrats) is now challenging Loeffler in a November nonpartisan special election, so the freshly minted and little-known senator could use a few months of quiet subservience to Trump and to her reelection ally Mitch McConnell to build a positive public profile, at least among Republicans. Instead, she’s increasingly getting negative attention for suspect stock-market activity before and during the coronavirus pandemic, raising suspicions that she and her moneybags hubby benefited from her privileged access to intel about the crisis and its economic impact. The first round of reports broke in mid-March, and fingered Loeffler along with the most prominently mentioned suspect, Richard Burr of North Carolina (chairman of the Senate Intelligence Committee). Senators Dianne Feinstein of California, Jim Inhofe of Oklahoma, and Loeffler’s Georgia colleague David Perdue also got some ink.
The latest reports are strictly about Loeffler, as the Atlanta Journal-Constitution reported on Wednesday:
U.S. Sen. Kelly Loeffler’s most recent financial disclosures show that millions of dollars in stocks were sold on her behalf at the same time Congress was dealing with the impact of the coronavirus.
The largest transactions — and the most politically problematic — involve $18.7 million in sales of Intercontinental Exchange stock in three separate deals dated Feb. 26 and March 11. Loeffler is a former executive with ICE, and her husband, Jeff Sprecher, is the CEO of the company, which owns the New York Stock Exchange among other financial marketplaces.
Selling off shares of a stock-market-management company when such markets were about to undergo historic losses inevitably sounds fishy, and the rationalizations offered by Loeffler’s campaign simply reinforce the fact that the very rich are not like me or you:
Loeffler’s campaign said the ICE stock sales were prearranged and part of her and her husband’s compensation package. Records provided by the campaign show Loeffler and her husband exercised their employee options to buy ICE stock at a discounted rate, then sold much of it within a few weeks …
Loeffler and her staff have said she did nothing wrong. Her active portfolio reflects a woman of immense wealth who is confident in the market but also committed to following the rules, a spokeswoman said.
She, and the other senators feeling hit for major stock-exchange activity before and during the crisis, could have easily avoided this problem, the Journal- Constitution observes:
Chester Spatt, a professor of finance at Carnegie Mellon University, said all these senators could have avoided controversy by declining to buy or sell stocks in individual companies. Spatt, who served as an SEC economist from 2004 through 2007, said senators now must deal with the erosion of public confidence as a result of these transactions.
“This is why senators shouldn’t be doing this,” he said. “The burden is on them to demonstrate they were not using insider information.”
Aside from any possible legal or institutional (e.g., Senate Ethics Committee) consequences, Loeffler’s money-shuffling is poorly timed from a political standpoint. Unlike the other senators in the spotlight, she’s drawing fire from people in both parties. Here’s what Doug Collins had to say about the first burst of news about Loeffler and the stock market:
He will certainly confess to a new wave of nausea now on behalf of himself and the hard-core conservatives already backing him against Loeffler.
Fortunately for Loeffler, she will not have to face voters until November, in a special nonpartisan “jungle primary,” which means that if no candidate wins a majority, the top-two finishers, regardless of party, will proceed to a January 2021 runoff. Aside from the governor and his Georgia allies, she can count on all sorts of GOP Establishment support in Washington. The Club for Growth, for example, is attacking Collins and helping the incumbent firm up her conservative street cred.
While several Democrats have declared for the special election (businessman Matt Lieberman has gotten a lot of ink strictly because he is the son of Joe Lieberman), party leaders have quietly consolidated behind the candidacy of Ebenezer Baptist Church pastor Raphael Warnock, who has also uttered sharp words about Loeffler’s stock transactions. While the intensity of the Loeffler-Collins rivalry creates the possibility of a two-Republican runoff, 2020 partisanship — Georgia is likely to be a presidential battleground state, and will likely have two competitive House races plus Perdue’s competitive reelection race — makes that improbable. More likely is a late shift among Republican voters toward whoever looks stronger against Warnock, though an intervention by the ever-erratic POTUS should not be ruled out. Since there’s no way she can get around the political disadvantages of being crazy rich at a time so many are suffering, Loeffler might as well cut the purse strings for real.
