The naked corruption of Kelly Loeffler and David Perdue
Government of, by, and for the top 0.1 percent
Control of the United States Senate hinges on two January 5 runoff elections in Georgia, where incumbent Republicans David Perdue and Kelly Loeffler are facing Democrats Jon Ossoff and Raphael Warnock respectively. Most immediately, the race is a contest over whether President-elect Joe Biden and the Democratic Party will be able to govern — especially by passing another big coronavirus rescue package.
However, Loeffler and Perdue are also excellent examples of what interests the Republican Party serves — namely, the ultra-rich, which includes both Loeffler and Perdue personally. These are two people who were rich before they got into politics, and leveraged their power as senators to make themselves even more rich — by profiteering off the pandemic. It is government of, by, and for the top 0.1 percent.
Let me consider their cases in turn. David Perdue is a longtime businessman who served as CEO of Dollar General in the mid-2000s, where he worked diligently to source more products from China. According to his financial disclosures, he is worth between $15 million and $43 million.
As Michela Tindera writes at Forbes, Kelly Loeffler and her husband Jeffrey Sprecher own a big stake in International Exchange, a financial clearinghouse company that Sprecher founded and where he remains CEO and chairman. (That company also owns the New York Stock Exchange, where Sprecher is again chairman.) After closely examining Loeffler's financial disclosure forms and other information, Tindera estimates that the couple is worth at least $800 million, and likely over $1 billion — or roughly quadruple the wealth of the second-richest member of Congress, Senator Mitt Romney (R-Utah).
Here's how the pandemic profiteering worked. On January 24, there was a private all-Senate briefing about the looming disaster — long before there was a broad public understanding that the U.S. was going to get slammed by COVID-19. Immediately afterward, both Loeffler and Perdue started trading strategic stocks. As The Daily Beast reported at the time, Loeffler executed 29 transactions valued between $1.275 and $3.1 million in the following days before the market crashed, almost all of them sales — one exception was a purchase of Citrix, which sells teleworking software. (Also, Loeffler recently violated the legal prohibition on soliciting campaign funds in a Senate office building.)
Perdue made a similar number of trades, but bought more than Loeffler — in particular, an investment of up to $850,000 in DuPont, which manufactures personal protective equipment. And as The Associated Press reports, in late January he sold between $1 million and $5 million in shares of Cardlytics, a financial technology firm, at $86 per share. Then, when the market had bottomed out in March, he snapped up between $200,000 and $500,000 of Cardlytics shares at $30 apiece; since then the share price has shot back up to $121. Nice tidy little profit to counterbalance the 270,000 dead Americans. (The Daily Beast also reports that in 2019, Perdue bought up shares of a submarine parts manufacturer before voting to give the company a lucrative contract, then sold it for another handsome profit.)
When reports of these trades first came out, both Loeffler and Perdue insisted they had nothing to do personally with the moves. "I have never used any confidential information I received while performing my Senate duties as a means of making a private profit ... professionals buy and sell stocks on our behalf," wrote Loeffler in an April 8 Wall Street Journal op-ed. Perdue told the Atlanta Journal-Constitution that advisers made his investment decisions on their own.
In the first place, candidates not taking direct control of their stock trades does not actually remove the conflict of interest. If you are a senator, and you hire a bunch of asset managers to look after your investments without any kind of blind trust, you still know what those investments are. You can make decisions knowing that your Goldman Sachs lackeys will make the profit-maximizing move in response — which is the best-case scenario of what happened here.
But realistically speaking, it is virtually impossible to believe that all these trades had nothing to do with the two senators. Are we really to believe it was a coincidence that these asset managers started making "there is a pandemic coming" trades the very same day the two were receiving classified briefings on the disaster? Come on. Indeed, The New York Times recently reported that Perdue was lying with his blanket denial — he did directly instruct his manager to sell the Cardlytics shares after receiving a cryptic email mentioning "upcoming changes" from the company's then-CEO. (Perdue and Loeffler have been cleared of legal wrongdoing by the Department of Justice, but given that Attorney General Barr is a shameless Trump stooge, that is hardly reassuring.)
Since then, both Perdue and Loeffler have largely downplayed the pandemic. Unlike Ossoff and Warnock, both have been holding large, in-person rallies. In July, both Loeffler and Perdue came out against extending the boost to unemployment insurance in the CARES Act, and since then neither have answered questions about further economic rescue measures from Atlanta Magazine. Instead, since the election they have amplified Trump's flagrant lies that Georgia's Republican governor and secretary of state somehow helped Joe Biden steal the election there.
Over the last decade or so, there has been a long discussion of why Democrats are bleeding votes in rural areas (precisely where Republicans run up huge margins in Georgia). And on one level it's an important debate — there is good evidence that as Democrats embraced austerity, deregulation, and free trade that harmed such places, it hurt their vote share.
But on another level, it is frankly staggering that the Republican Party has swooped in to replace them. The Democrats may not be much of a friend to the working class or rural farmers, but Republicans are straight-up picking their pockets. If you want a couple senators to govern solely on behalf of their massive asset portfolio while leaving everyone else twisting in the wind, vote Perdue and Loeffler.