'So extensive': GOP congressman violated federal law with up to $8.5M in late financial disclosures
And the Monsanto trade was just one of 136 stock and other financial transactions — totaling between $3.05 million and $8.56 million — that Allen failed to properly report, according to an exclusive Raw Story analysis of federal financial disclosures.
"The omissions are so extensive that I'm just in suspense for what the possible explanation could be,” said Kedric Payne, vice president, general counsel and senior director of ethics for the Campaign Legal Center, a nonpartisan government watchdog group. “I haven't seen anything like this before with it going back this far."
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The Stop Trading on Congressional Knowledge (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.
Passed by Congress in 2012, the STOCK Act is designed to stop insider trading, curb conflicts-of-interest and enhance transparency.
But many of the financial trades Allen reported earlier this month were at least three years past the STOCK Act’s reporting deadline. In response to a series of questions from Raw Story, Allen’s congressional office acknowledged in an emailed statement that the congressman experienced “reporting issues” and blamed them on a financial adviser who no longer works for the Georgia lawmaker.
“Congressman Allen’s investment decisions are handled by a financial adviser, who uses investment managers to implement trades at their own discretion, without consulting with or getting input from the Congressman,” said Carlton Norwood Jr., a spokesperson for Allen. “In May of this year, Congressman Allen became aware of some reporting issues and omissions that were caused by a compliance firm he had engaged. At that point, he hired counsel and a new compliance firm to start working with the House Ethics Committee to ensure all trades have been properly reported.”
Rep. Rick Allen (R-GA). Source: U.S. House of Representatives
Members of Congress are required to file what are known as “periodic transaction reports,” or PTRs, each time they make certain financial transactions worth more than $1,000.
The periodic transaction reports are due within 45 days of a trade being executed, whether by a member of Congress personally, or a financial adviser working on the member’s behalf. Lawmakers are only required by law to disclose the value of the trades in broad ranges.
“The [Aug. 10] PTR was filed as part of that process in consultation with House Ethics Committee counsel – who understands that it was the compliance firm, and not Congressman Allen, who was responsible for these errors and that additional action and amendments to his financial disclosure statements may be necessary,” Norwood said in a statement.
However, Payne says it’s ultimately up to the legislator to ensure that such reports are filed in a timely manner.
“It's always been clear that the member has the ultimate responsibility of filing the PTRs, and it cannot be simply blamed on any outside adviser,” Payne said.
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.
"It's a black hole when it goes to the Ethics Committee, and we don't know if they will assess penalties, or they just don't do anything about it.” Payne said.
Tom Rust, staff director and chief counsel for the House Committee on Ethics, which is tasked with investigating alleged STOCK Act violations, said “no comment” when reached by Raw Story.
Asked by Raw Story whether Allen has paid a fine, Norwood did not respond.
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Demian Brady, vice president of research for the National Taxpayers Union Foundation, said there should be more transparency from the congressional ethics committees “to see how they're enforcing the laws that they're responsible for administering.”
“It shouldn’t be so difficult to figure out whether a member’s getting fined or not for late compliance with these basic, it seems to me, fairly straightforward and simple reporting requirements,” Brady said.
Allen is appointed to the House Committee on Energy and Commerce and its Subcommittees on Communications and Technology; Innovation, Data, and Commerce; and Environment, Manufacturing and Critical Materials. He is also appointed to the House Committee on Education and the Workforce and its Subcommittee on Health, Employment, Labor and Pensions.
Allen’s stock transactions span dozens of companies including energy companies like defense contractor CAE Inc., Dominion Energy, General Electric, ExxonMobil, NextEra Energy and Phillips 66, technology companies such as Microsoft and Verizon and mining company Freeport-McMo-Ran.
This is at least the third separate time Allen has violated the STOCK Act.
Raw Story reported in June that Allen was late in disclosing his spouse’s March 27 sale — valued between $100,001 to $250,000 — of stock in SouthState Corporation, a financial services company.
In 2021, Insider reported that Allen has several financial filing flubs related to his stock trade activity from 2019 and 2020.
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 19 members of the 118th Congress who have broken the federal conflicts of interest law.
In recent weeks, repeat violators like Allen have broken the federal disclosure law again — Rep. Sen. Tom Carper (D-DE) violated the STOCK Act for the third time in 14 months, Rep. Kathy Manning (D-N.C.) 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.
"We see that the STOCK Act is not complied with the way it's intended to be, and if there are no consequences for the late filings, you continue to see that there probably will be less compliance with the law,” Payne said.
Campaign Legal Center supports legislation that would require members of Congress to divest of any stocks in individual companies, he said.
The most recent legislation introduced is the Ban Stock Trading for Government Officials Act, 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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