For the last year, Perdue lied to local and national media about his role in his early-pandemic trades while he was downplaying the crisis
Atlanta, Ga. — Today, The New York Times published a bombshell report revealing that a federal investigation of Senator David Perdue (R-Ga.) earlier this year found he personally directed the sale of more than $1 million in stock shares, directly contradicting multipleprevious statements made by Perdue’s campaign claiming he had no direct involvement in the management of his stock portfolio.
Perdue used the claim as a false excuse to say he did not use his position in the Senate to profit off the pandemic. Without that defense, all of his other stock trades face new scrutiny and questions of whether or not he personally directed them after receiving multiple briefings on the COVID-19 pandemic.
Today, in response to the shocking report, investigative journalist and Democratic nominee for U.S. Senate in Georgia Jon Ossoff released the following statement:
“For months, David Perdue insisted to Georgians he had no control over his own stock portfolio. Today’s report reveals he’s been lying all along, and that federal investigators found Senator Perdue did personally direct his own stock trades. Perdue’s misconduct is repeated and flagrant. He is using his office to enrich himself, and he’s refusing to debate me because he knows he can’t defend the indefensible.”
Read key excerpts from The New York Times’ report below.
- Early this year, Senator David Perdue, Republican of Georgia, sold more than $1 million worth of stock in the financial company Cardlytics, where he once served on the board. Six weeks later, its share price tumbled when the company’s founder announced he would step down as chief executive and the firm said its future sales would be worse than expected.
- After the company’s stock price bottomed out in March at $29, Mr. Perdue bought back a substantial portion of the shares that he had sold. They are now trading at around $120 per share.
- The Cardlytics transactions drew the attention this spring of investigators at the Justice Department, who were undertaking a broad review of the senator’s prolific trading around the outset of the coronavirus pandemic for possible evidence of insider trading, according to four people with knowledge of the case who described aspects of it on the condition of anonymity. Though Mr. Perdue alluded to the federal inquiry in a campaign ad this fall, its details have not been previously reported.
- Investigators found that Cardlytics’ chief executive at the time, Scott Grimes, sent Mr. Perdue a personal email two days before the senator’s stock sale that made a vague mention of “upcoming changes.”
- The federal scrutiny, which also included attention from the Securities and Exchange Commission, is the most vivid example to date of how Mr. Perdue’s complex financial interests and frequent trading have complicated his pursuit of a second Senate term.
- Congress’s ethics rules do not bar lawmakers from holding or trading individual stocks, but like other Americans, they are not allowed to trade on inside information. Other lawmakers have decided it is not worth the political sweat that comes with the appearance of possible conflicts of interest and have steered their investments into diversified mutual funds. But Mr. Perdue, a former executive at Reebok and Dollar General, has been one of the most active traders on Capitol Hill.
- F.B.I. agents in Washington spoke with Mr. Perdue in June, asking him questions about his financial transactions. The extent of the conversation was unclear, according to two people with knowledge of the conversation.
- Mr. Grimes and Mr. Perdue had known each other since at least 2010, when Mr. Perdue joined the board of Cardlytics, then a small and privately held Atlanta start-up. Mr. Perdue resigned his directorship in 2014 after his election to the Senate, but struck an unusual financial arrangement on his way out that paved the way for him to benefit from holding a stake in the company when it went public four years later.
- As a senator, Mr. Perdue continued to hold shares of Cardlytics, where executives said he had made valuable contributions to the company, along with scores of other stocks that he traded. In 2019, Mr. Grimes made the maximum donation of $5,600 to Mr. Perdue’s re-election efforts, in what appeared to be his only political contribution of the election cycle.
- The email correspondence between the two men began on Jan. 21 and took place just before Mr. Perdue placed the well-timed trades.
- “David, I know you are about to do a call with David Evans,” Mr. Grimes wrote from his iPad, according to a copy of the exchange reviewed by The New York Times. “As an FYI, I have not told him about the upcoming changes. Thanks, Scott.”
- Mr. Perdue then contacted his wealth manager at Goldman Sachs, Robert Hutchinson, and instructed him to sell a little more than $1 million worth of Cardlytics shares, or about 20 percent of his position, three of the people said. One person familiar with the inquiry into Mr. Perdue’s trades said that the conversation was memorialized in an internal Goldman Sachs record later obtained by the F.B.I.
- Financial disclosure forms Mr. Perdue is required to file with the Senate show a Jan. 23 sale of $1 million to $5 million in Cardlytics stock.
- Investigators in Washington began scrutinizing Mr. Perdue in the spring; by June, the U.S. attorney’s office in Atlanta was handling the case along with prosecutors in the department’s criminal division in Washington.
- Mr. Hutchinson told the F.B.I. that Mr. Perdue and his wife weighed in only on broader investing issues, like the proportion of stocks and bonds to hold in their portfolio, according to a person with knowledge of his interview. But a person familiar with the senator’s money-management arrangements with Goldman Sachs said that Mr. Perdue retained some degree of discretion over which trades were made and when.
- In this case, Mr. Perdue’s legal team told investigators that Mr. Hutchinson had advised their client in October 2019 that he needed to sell Cardlytics shares to balance his holdings. The shares had increased in value and the advisers argued that Mr. Perdue should take the profits from the sales and reinvest them elsewhere to limit his exposure to the fluctuation of a single stock. Mr. Perdue elected to go forward with those changes in January, his lawyers said.
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