This story was updated to remove a sentence stating that Corker once worked for CBL. Corker worked from EMJ, which performed work on behalf of CBL.
U.S. Sen. Bob Corker and U.S. Rep. Chuck Fleischmann, both Chattanooga Republicans, engaged in stock trades over the past couple of years in companies that were directly affected by legislation or political activities they were involved in or knew about from their roles in Congress, according to a new report from Politico.
The online news site listed Corker and Fleischmann among 38 members in the 535-member Congress who were involved in "reckless stock trading that leaves Congress rife with conflicts."
Both Corker and Fleischmann insisted the trades cited by Politico had nothing to do with their congressional roles and were fully disclosed as required by congressional ethics rules. Fleischmann said he was unaware of the trade cited by Politico in advance of his vote and Corker said he sold his stock cited in the Politico story to try to avoid any appearance of a conflict, not to make any extra money.
Politico said Corker invested in Chesapeake Energy, a company advocating for ending the oil export ban at the same time he was cosponsoring the bill to end the ban, which eventually was passed by Congress. The day after it became clear the ban would end, Sen. Corker sold at least $500,001 in shares of Chesapeake stock.
But Todd Womack, Corker's chief of staff, said the senator initially sold his stock in Chesapeake at a loss prior to his vote to avoid any perception of a conflict.
"Prior to the vote, when it was reported that leadership planned to include provisions related to energy in the omnibus spending bill — out of an abundance of caution and to avoid even the appearance of a conflict of interest — Sen. Corker sold his shares at a significant loss," Womack said.
Corker is not a member of the Senate energy committee. But Corker, who is a member of the Senate banking committee, has pushed for the federal government to limit its financial backing for government-supported enterprises (GSEs) such as Freddie Mac and Fannie Mae, which have nearly $5 trillion of debt that Uncle Sam could have to absorb.
Corker told CNBC in the fall of 2015 that investors should short, or buy in anticipation of a price drop in the value of the publicly traded GSEs. Corker has been criticized for such comments.
Corker's trades in the Chattanooga-based CBL & Associates Properties also were probed last year by the Securities and Exchange Commission to see if he was given information improperly. The SEC investigation did not find any improper behavior.
But the Campaign for Accountability questioned why Corker and his family made 70 trades of stock in CBL from 2008 to 2015 — more than any other investment.
For his part, Fleischmann was cited by Politico for profiting from Vice President Joe Biden's moon shot on cancer research, making a strategic investment ahead of the official announcement. In the summer of 2016, a Fleischmann family account invested in two companies, Juno Therapeutics and Celgene, which were developing new cancer drugs, according to financial disclosures by Fleischmann. One of the investments was made a week before the Obama administration announced new measures that would speed up approval for cancer therapies, Politico said.
Fleischmann said he "treats my investments like a blind trust and was unaware of the transaction since my financial adviser makes the transactions."
"To be clear, my investments do not violate the standards set by the House Committee on Ethics and I will continue to serve the people of the Third District of Tennessee with unwavering integrity," Fleischmann said in a statement Tuesday.
Fleischmann said he lost both of his parents to cancer.
"I am proud that I am able to use my personal experience to speak out about this terrible disease which affects too many people," he said. "Due to my work on the Appropriations Labor, Health and Human Services Subcommittee I vote for the recommended topline funding (for the cancer research). There are no longer earmarks in Congress and I do not determine or advocate where NIH's (National Institute of Health) funds specifically go once they have been allocated."
But Tennessee Democrats blasted the personal investments by Corker and Fleischmann.
"It's unseemly," said Mary Mancini, chairman of the Tennessee Democratic Party. "Over 1 million people are living in poverty in our state, including over 300,000 children. Meanwhile, Sen. Corker and Rep. Fleischmann are using their elected offices to line their pockets."
Mancini also chided Fleischmann for supporting the repeal and replacement of Obamacare in legislation adopted by the U.S. House on May 4. The Democratic Party chair in Tennessee said only 21 percent of people approve of the House action "because it rolls back protections for people with pre-existing conditions and throws 24 million people off of their coverage.
"Maybe if he spent as much time reading the health care bill as he did on his own stock trades, he would have made a better decision," Mancini said.
Contact Dave Flessner at dflessner@timesfree press.com or at 423-757-6340.
This story was updated May 17 at 5:30 p.m. to add Fleischmann quote.