Sen. David Perdue, one of two multimillionaire Georgia Republicans facing tight runoff elections in January, drew scrutiny this spring for stock transactions made in the weeks ahead of the coronavirus outbreak in the U.S., while he was receiving privileged briefings on the impending pandemic.
According to news reports and Perdue's financial disclosures, the trades involved 112 transactions, and as much as $825,000 in sales and $1.8 million in purchases. The timing raised flags for various reasons. Perdue sold up to $165,000 in shares of a casino company that later shuttered, for instance, and made an investment in a company that manufactures personal protective equipment on the same day Perdue attended his first classified pandemic briefing.
In a series of transactions in late February, Perdue also invested up to $245,000 in the pharmaceutical giant Pfizer.
Though the Pfizer purchase has been reported previously, the events surrounding it have not: One week after those stock purchases, the company publicly announced it would be developing a coronavirus vaccine.
Although the Justice Department eventually cleared Perdue of insider trading, this synchronicity raises new questions about what the senator knew and when.
Perdue has argued that all his trades are executed by a third-party adviser, and that he has no say in day-to-day transactions. Still, he is among the most active traders in Congress: The New York Times reported on Wednesday that he has executed 2,596 market transactions in his single term, often involving companies that operate within the ambit of his Senate responsibilities.
This spring Perdue pushed back against allegations of insider trading in advance of the coronavirus, claiming that outside advisers made the calls without his input, but a bombshell New York Times report last week made clear that was a lie. This summer, Justice Department investigators found that Perdue had instructed one of his wealth managers to offload more than $1 million in a financial firm after the CEO tipped off the senator in a personal email.
The Pfizer transactions would seem to have required even more faith in his broker, who apparently felt counterintuitive confidence in the company's stock in the early stages of a market-wide crash, and during a week where its shares fell in line with the Dow's overall drop of more than 6%.
Perdue's broker would have been similarly undaunted by the company's Feb. 27 warning to investors that the pandemic "could adversely impact" its operations, including clinical trials:
The extent to which the coronavirus impacts our operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information which may emerge concerning the severity of the coronavirus and the actions to contain the coronavirus or treat its impact, among others.
In particular, the continued spread of the coronavirus globally could adversely impact our operations, including among others, our manufacturing and supply chain, sales and marketing and clinical trial operations and could have an adverse impact on our business and our financial results.
Perdue's broker chose to buy more Pfizer stock that day.
The broker bought even more the next day, when Perdue's office issued its first press release about the coronavirus — a joint statement with fellow Georgia Republican Sen. Kelly Loeffler that touted their attendance at "regular congressional briefings led by the Coronavirus Task Force."
The statement noted that the U.S. is "expediting the development of a vaccine."
In the next few days, it became clear that Pfizer had made the Trump administration aware of its pursuit of coronavirus therapeutics and a vaccine.
Pfizer's top scientist, Mikael Dolsten, attended a March 2 White House roundtable, addressing "how the federal government can accelerate the development of vaccines and therapeutic treatments for the coronavirus." Dolsten spoke about those efforts at a follow-up press conference, and referenced close partnerships with a number of government health agencies.
Pfizer released a statement later that day with further details, including a timeline:
Pfizer is engaging with a third party to screen these compounds under an accelerated timeline and currently expects to have the results back by the end of March. Upon completion of such screening, the company could be in a position to move forward with development depending on the results. Toxicology studies would then need to be completed prior to any clinical development, but if successful, Pfizer hopes to be in the clinic by no later than the end of 2020.
As a result, the stock's closing price rose from $33.42 on Feb. 28 to $34.88 on March 2, and then rose again to $36.40 on March 4.
On March 5 Pfizer announced its budding partnership with German company BioNTech to develop an mRNA-based vaccine, which it theorized could be brought to market faster than traditional vaccines. The project led to the company's groundbreaking Nov. 9 announcement that its vaccine had demonstrated 90% efficiency in its first stage 3 trial.
Around this time, Pfizer showed promise for long-term gains in other ways, as well. On March 20, a stock market analyst predicted that Pfizer's top product, a pneumonia vaccine, might outperform projections on the year as a result of the pandemic.
The company's stock, which had tumbled amid global turmoil on the financial markets, began to recover on March 24.
When public pressure forced Perdue to liquidate his stocks in mid-April, his Pfizer investments yielded profits as high as 9%. If he had held on until the Nov. 9 announcement, the Peach State Republican could have cobbled together gains as high as 25.7%.
It is not clear whether Perdue has a direct personal relationship with Pfizer executives or lobbyists. Federal Elections Commission filings show that Perdue's campaign over the last four years has accepted tens of thousands of dollars in donations from Pfizer's PAC, including a $2,800 contribution last November from company CEO Albert Bourla.
But that does not land Perdue anywhere near the top beneficiaries of Big Pharma money in Congress. Dozens of lawmakers take in more than $100,000 a year from the industry, and Pfizer is the biggest donor, according to data compiled by Kaiser Health News. Bourla himself contributes to a number of politicians and committees, mostly, but not entirely Republicans.
However, one of Pfizer's donations — a $2,500 contribution to One Georgia PAC — came on the same day as Perdue's first purchase of Pfizer stock this year.
The insider trading scandal this spring tested the public's confidence in elected officials, after a bipartisan group of senators were accused of using the privileges of their office to benefit financially from the coronavirus pandemic. (Loeffler, Perdue's Georgia Republican colleague, was among them.)
Investigators later cleared that group, with the exception of Sen. Richard Burr, R-N.C., who is still a subject of inquiry. There have also been no reports about what came of an SEC probe into Loeffler's transactions.
Perdue was the last of those officials to announce he had been cleared, which he first made public in September, in response to attack ads from Democratic opponent Jon Ossoff — who will face Perdue again in the Jan. 5 Georgia runoff election.
Last week, Salon reported that a government accountability watchdog has asked the Senate Ethics Committee to investigate another series of Perdue's trades, these involving stocks in a defense contractor that had benefited from a bill Perdue worked on, unrelated to the coronavirus pandemic.
The Perdue campaign did not immediately reply to Salon's request for comment.