GOP lawmaker breaks financial law after ripping opponent for breaking financial law
A New Jersey freshman congressman has violated a decade-old financial disclosure and conflicts-of-interest law — the same one he slammed his opponent for breaking.
Rep. Tom Kean Jr. (R-NJ) violated the Stop Trading on Congressional Knowledge (STOCK) Act when, on Sept. 18, he was as much as four months late disclosing six personal stock transactions, according to a federal financial document reviewed by Raw Story.
Taken together, the transactions are worth up to $90,000.
Kean’s violation, first reported by the New Jersey Globe, is particularly notable given that his 2022 campaign for Congress hit his Democratic opponent, then-Rep. Tom Malinowski, with withering criticism over Malinowski’s numerous STOCK Act violations.
A congressional staffer for Kean, who declined to be named for publication, told Raw Story that a money manager for one of the congressman’s several financial accounts erred in reporting transactions to an attorney Kean hired, Stephen Roberts, of political regulatory law firm Holtzman Vogel.
“Upon taking office, I hired professionals to make certain that any and all transactions that I have control or interest in are reported accurately and quickly,” Kean himself told Raw Story via a statement. “However, this week, the attorney charged with overseeing my personal transaction reporting for the House shared with me that transactions from a family trust account, which I have no control over, were shared with him in an untimely fashion despite regular check-ins and confirmation of accurate reporting.”
The STOCK Act requires key government officials, including members of Congress, to publicly report within 45 days most purchases, sales and exchanges of stocks, bonds, commodity futures, securities and cryptocurrencies. Members of Congress themselves are ultimately responsible for ensuring that their trades are disclosed on time, in compliance with federal law.
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Kean reported stock purchases in metal can manufacturing company Crown Holdings, medical and industrial conglomerate Danaher Corporation and financial services companies Fidelity National Information Services and JP Morgan Chase. He also reported two stock sales in Fidelity and financial technology company Global Payments, Inc., as a part of the Kean Family Partnership.
The transactions took place between April 3 and July 31.
The Kean congressional staffer said Kean Jr. is a one-third beneficiary of the Kean Family Partnership, and it is “100 percent not controlled by Congressman Tom Kean Jr.” Kean’s father, former New Jersey Gov. Tom Kean Sr. is the “only individual who is authorized to direct trades, direct buys, sells, movements,” the staffer said.
“The attorney immediately took all appropriate steps to get that information up to date and all reporting is now in good standing,” Kean said. “I am thankful to my attorney for swiftly addressing these issues; however, I am deeply disappointed in the team tasked with managing that account for failing to meet the high standards I set and am taking necessary steps to ensure this error is not repeated.”
Roberts, Kean’s lawyer, sent a letter to Kean on Monday confirming what the congressman said, writing, “I was alerted by one of the financial professionals responsible for the management of certain accounts that those third parties made transactions dating back to April 3, 2023, that I understand were not previously reported to you, your staff or myself.”
Roberts continued, “Importantly, I was routinely informed on a regular basis by these same professionals that there were no reportable transactions. Upon learning of these omissions, I conducted a full review of each of your reportable accounts.”
The standard fine for violating the STOCK Act is $200. But the House Committee on Ethics and Senate Select Committee on Ethics have historically waived the fees for many violators, and the committees refuse to publicly release information on who it has fined or the amount of the fines it does issue.
It seems a pass will be given to Kean as well.
“It is our impression, and it's the lawyer’s impression, that the Ethics committee is just going to waive any type of fine,” the Kean staff member said. “We can’t report what we don't know, and obviously, that's got to be fixed, but we expect any type of fine to be waived. The attorney worked with the Ethics Committee while submitting this to get it all up to date.”
Maggie Savoca, 59, of Fanwood, N.J., supported Malinowski and works with progressive advocacy group Indivisible’s local OneNJ7 team. Savoca said Kean is “out of touch with the average person he represents,” and expressed frustration at the lack of consequences for the violation.
“When you have money, people give you free stuff, or they give you a pass, whereas the average working American is late on their credit card payment or their rent, not too many times will they be given an opportunity to not get fined,” Savoca said. “People who have as much money as him can afford to lose track of a couple of tens of thousands of dollars unlike a lot of people I know who are having trouble paying their rent.”
‘Ironic’
In November, Kean beat out Malinowski for his seat representing New Jersey’s 7th congressional district.
Malinowski failed to properly disclose between $671,000 and $2.76 million in trades in 2020, with more than two dozen stock transactions taking place during the first several weeks of the COVID-19 pandemic. One stock sale in March 2020 involved shares of a medical-diagnostic company that made COVID-19 tests, Insider reported.
Congressional stock trading subsequently became a hot topic during the New Jersey congressional election, with Harrison Neely, a spokesman for Kean when he was a state senator, telling NorthJersey.com: “Tom Malinowski made a fortune betting against the American economy during the pandemic and intentionally covered it up during an election year. He blew through the law designed to stop members of Congress from insider trading over 140 times and earned himself a bipartisan ethics investigation."
Kean himself told NBC News that Malinowski is "a poster boy for why reform is necessary in the House of Representatives," adding the congressman's "investment strategy included betting on individual American companies to fail over the course of the last two years."
And the National Republican Congressional Committee called out Malinowski for “corrupt violations” and having "profited off the pandemic” in an ad, NorthJersey.com reported.
“Kean’s campaign nailed him on it, said he was under ethics investigation,” Savcoa said. “It's ironic that it was terrible when his opponent did it.”
The Democratic Congressional Campaign Committee previously called Kean a "hypocrite" since he sold at least $175,000 in stock that included Johnson & Johnson, which developed COVID-19 vaccines, and his family foundation bought at least $15,000 in stock for a COVID-19 test manufacturer.
But at the time, Kean made regular financial disclosures required of congressional candidates and was not an elected member of the U.S. Congress with access to privileged information, NorthJersey.com reported.
Who’s responsible for timely disclosures?
Like Kean, Rep. Maria Elvira Salazar (R-Fla.) violated the STOCK Act after blasting her Democratic predecessor for breaking the same law, Raw Story reported.
Salazar was late in disclosing her spouse’s $1,001 to $15,000 sale of stock in Florida renewable energy company, NextEra Energy Partners, which wasn’t her first STOCK Act violation as she more than two months late last year in disclosing $500,000 in stock of senior healthcare services company, Cano Health Inc. Insider reported.
"How can we trust her to represent us in Miami or oversee $2 trillion in government funds while she violates and skirts federal law with her own finances?" Salazar wrote of her congressional opponent, then-Rep. Donna Shalala (D-FL), when Shalala failed to properly report half-a-dozen stock sales while representing Florida’s 27th Congressional District.
“What Donna Shalala did was not a ‘mistake’ but is deeply concerning … she has broken the public’s trust,” Salazar added.
Kedric Payne, vice president, general counsel and senior director of ethics for the Campaign Legal Center, a nonpartisan government watchdog group, told Raw Story last month that “it’s ultimately up to the legislator to ensure that such reports are filed in a timely manner.”
His comments came after Raw Story broke the news that Rep. Rick Allen (R-GA) was as much as six-and-a-half years late disclosing between $3.05 million and $8.56 million in stock transactions, an error he blamed on a financial adviser.
“It's always been clear that the member has the ultimate responsibility of filing … and it cannot be simply blamed on any outside adviser,” Payne said.
Savoca called out Kean for blaming his money manager.
“At the end of the day, it's his responsibility just like it's everybody's responsibility to pay their bills on time and file their taxes, and if they're fortunate enough to have savings and stocks and things like that, file whatever they need to in order to be law abiding,” Savoca said.
Savoca said the local chapter of Indivisible is gearing up for an event where House Speaker Kevin McCarthy (R-CA) is set to come to town Friday for a “beer and chili” fundraiser for Kean amidst a looming government shutdown. McCarthy has previously signaled support for banning members of Congress from trading stocks, although he’s not made it a priority since becoming House speaker.
"Kean, Jr. is an out of touch product of nepotism, who came into Congress on the heels of profiteering off the pandemic by selling pharmaceutical stocks,” said Andrew O'Neill, Indivisible's legislative director.
“It's good that politicians like Kean, Jr. are being called out for violations of the STOCK Act, but behavior like his, that is at best unscrupulous and at worst corrupt, makes it clear we need to ban members of Congress from owning or trading stocks in the first place,” O’Neill said.
Epidemic of violations
Dozens of members of Congress have failed to comply with the STOCK Act.
During the 117th Congress from 2021 to 2022, at least 78 members of Congress — Democrats and Republicans alike — were found to have violated the STOCK Act's disclosure provisions, according to a tally maintained by Insider.
Raw Story has this year identified 25 members of the 118th Congress who have broken the federal conflicts of interest law, including the new addition of Kean.
In recent weeks, repeat violators have broken the federal disclosure law again.
Rep. Sen. Tom Carper (D-DE) recently violated the STOCK Act for the third time in 14 months. Rep. Kathy Manning (D-NC) recently became a two-time offender, and Rep. Debbie Wasserman Schultz (D-FL) was several months late disclosing a family stock sale — again.
The ongoing violations come at a time when a bipartisan group of lawmakers have introduced several similar bills aimed at banning congressional stock trading.
The most recent legislation introduced is the Congressional Stock Trading Act, introduced by Sens. Jon Ossoff (D-GA) and Mark Kelly (D-AZ) in September, which would require members of Congress and their family members to divest from their stocks or place them a blind trust.
“Members of Congress should not be playing the stock market while we make federal policy and have extraordinary access to confidential information,” Ossoff said in a press release. “Stock trading by members of Congress massively erodes public confidence in Congress with serious appearance of impropriety, which is why we should ban stock trading by members of Congress altogether.”
The Ban Stock Trading for Government Officials Act was introduced in July, which would prohibit members of Congress, the president, the vice president, senior executive branch officials, their spouses and children from trading stocks and would require greater transparency with financial disclosures, The Hill reported.
Another two-party bill, the Bipartisan Restoring Faith in Government Act was introduced in May and is co-sponsored in part by political rivals in Reps. Alexandria Ocasio-Cortez (D-NY) and Matt Gaetz (R-FL).
Other materially similar bills include the Ending Trading and Holdings in Congressional Stocks (ETHICS) Act, the TRUST in Congress Act and the Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act. In the decade since the STOCK Act’s passage, the push for a total ban on lawmakers trading stocks while in office gained but then lost momentum last year when the Democratic-led House, then led by Speaker Emerita Nancy Pelosi, decided not to conduct a hearing on any of the stock-ban bills and never brought it to the House floor for a vote.
News organizations including the New York Times, Insider, NPR and Sludge have documented rampant financial conflicts of interests among dozens of members of Congress, such as those who bought and sold defense contractor stock while occupying positions on congressional armed services committees or otherwise voting on measures to send such companies billions of federal dollars. The executive and judicial branches are riddled with similar financial conflict issues, too, as the Wall Street Journal has reported.
The Wall Street Journal won a 2023 Pulitzer Prize for its investigation into financial conflicts among officials who work in federal agencies while Insider won the Society of Professional Journalists’ Sunshine Award for its reporting on congressional financial conflicts.
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House Speaker Kevin McCarthy (R-CA). (AFP)