A Minnesota nonprofit filed an ethics complaint Friday against U.S. Rep. Dean Phillips regarding stock trades he made in the early days of the COVID-19 pandemic.
The complaint, filed with the Office of Congressional Ethics, calls for a full investigation into Phillips for “possible violations of the STOCK Act, federal securities law and House Ethics Rules.”
“The fact that a congressman was buying and selling stock immediately before major price moves related to his work on House subcommittees certainly calls for an investigation and, more importantly, an explanation from Rep. Phillips,” said Andy Cilek, executive director of the Minnesota Voters Alliance, the group that filed the complaint.
Financial disclosure reports indicate that Phillips was among 37 House members who bought and sold stocks in the early days of the coronavirus pandemic.
Throughout February, Phillips unloaded stocks in companies that were expected to be harmed by the pandemic and purchased stocks in companies that benefited from the public-health crisis, Alpha News reported.
Phillips participated in various COVID-19 briefings on February 27 and 28 as a member of the House Foreign Affairs Committee.
On February 28, Phillips purchased stock in Abbott Laboratories, which has received four emergency use authorizations from the FDA for its COVID-19 tests. He also purchased stock in Baxter International, a multinational health care company that has experienced “significant revenue growth” because of the pandemic, a medical industry publication reported.
A purchase for stock in ViacomCBS Inc. is also listed on the first-term congressman’s Periodic Transaction Report, a disclosure form all members of Congress must complete after selling or buying stocks in excess of $1,000. February 28 is again listed as the transaction date.
Phillips sold up to $15,000 in preferred securities in AerCap Holdings, the self-described “world leader in aircraft leasing.”
Overall, Phillips purchased up to $225,000 and sold up to $335,000 worth of stock on February 28. The pandemic was not declared a national emergency until March 13.
Friday’s complaint also raises questions about whether Phillips used nonpublic information to secure a loan for MyMeds Inc., a company he co-owns.
“Additionally, the evidence suggests he may have used nonpublic information related to the Paycheck Protection Program (PPP) and the PPP Flexibility Act to help secure a loan for a company he co-owns and then authored legislation to loosen restrictions on companies that received a PPP loan for his own personal gain,” states the complaint.
MyMeds Inc. received a $150,000 to $350,000 PPP loan, which was approved on the first day of the program, according to the complaint. Phillips then co-authored the PPP Flexibility Act in May.
“In a time of crisis, when hundreds of millions of Americans face unprecedented economic uncertainty, it is difficult to imagine any act that reflects more poorly on the House than using nonpublic information related to this public health crisis, or to craft legislation in response to a global pandemic, to enhance a Member’s own personal wealth,” says the complaint.
“In addition to the potential violations of federal law and House Ethics Rules, the behavior of Rep. Phillips has eroded public trust in our government at a time when that trust is more necessary than ever,” it continues.
The Phillips campaign has flatly denied any wrongdoing, saying the congressman hasn’t talked with his financial advisors since he was elected in 2018.
“Dean does not discuss stock trades with his financial management team and has not communicated with his financial advisors since being elected in November of 2018,” a spokesperson for the campaign previously told Alpha News. “This is a false accusation peddled by a desperate campaign resorting to Trump-style tactics.”
Cindy Pugh, one of the complaint’s filers and a former Minnesota representative, said “this kind of behavior is unacceptable.”
“Whether Rep. Phillips has an explanation or not, it is reckless disregard for the honor of his office to not affirmatively ensure that his personal stock trading never even appears to violate the public trust,” she said.
Read the full complaint: