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Senator's defense in stock-trading controversy undercut by new details

If the latest reporting is correct, there's reason to question the heart of David Perdue's answers to questions about his well-timed investments.
Image: David Perdue
David Perdue during a Senate Foreign Relations Committee hearing in the Capitol on June 18, 2020.Caroline Brehman / CQ Roll Call via AP file

Republican Sen. David Perdue, facing a runoff election in Georgia in 36 days, has faced a series of questions about his investment strategies in recent months, contributing to Jon Ossoff (D) calling the incumbent senator a "crook" during a recent debate.

But the questions took a turn last week when the Associated Press reported on Perdue's well-timed investments regarding one specific company.

[F]or the second time in less than two months, Perdue's timing was impeccable. He avoided a sharp loss and reaped a stunning gain by selling and then buying the same stock: Cardlytics, an Atlanta-based financial technology company on whose board of directors he once served.

The AP's article added that there's no evidence of Perdue, already a multi-millionaire, acting on "information gained as a member of Congress or through his long-standing relationship with company officials.... But legal experts say the timing of his sale, the fact that he quickly bought Cardlytics stock back when it had lost two-thirds of its market value and his close ties to company officials all warrant scrutiny."

It's against this backdrop that the New York Times added some additional details, noting that Perdue sold more than $1 million worth of stock in the company shortly before Cardlytics' stock price tumbled "when the company's founder announced he would step down as chief executive and the firm said its future sales would be worse than expected."

After getting out in time, Perdue saw the stock price bottom out, at which point he reinvested in the company on whose board he used to serve, and then profited when Cardlytics' stock price recovered.

The Times' report noted that this generated interest from the Justice Department, and federal investigators found a rather vague email Cardlytics' then-CEO -- Scott Grimes, a Perdue donor -- sent to the Republican senator in January, referencing "upcoming changes" at the company. Grimes soon after said the email was sent to Perdue by mistake. (It was apparently intended for someone with the same first name.)

Nevertheless, consider what happened after the Georgia lawmaker received the email.

Mr. Perdue then contacted his wealth manager at Goldman Sachs, Robert Hutchinson, and instructed him to sell a little more than $1 million worth of Cardlytics shares, or about 20 percent of his position, three of the people said. One person familiar with the inquiry into Mr. Perdue's trades said that the conversation was memorialized in an internal Goldman Sachs record later obtained by the F.B.I.

If this reporting is accurate, it undermines a key part of the Republican's defense.

The more the senator had faced questions about his investments, the more Perdue has said he relies on outside financial advisers to make trades. Indeed, I received a note from the communications director for the senator's re-election campaign last week, and he referred me to an article in The Hill, which said, "Perdue's campaign has said that his stock trades are managed by outside advisers."

At face value, this may appear compelling: if Perdue's investment strategies really were guided by others, he could address questions about these assorted controversies by saying he wasn't involved with the decisions.

But if the latest reporting is correct, and Perdue contacted his Goldman Sachs wealth manager with instructions about selling shares at an opportune time, then there's reason to question the heart of the senator's defense.

Perdue's political operation has emphasized that investigators with the Justice Department and the Securities and Exchange Commission did not pursue the matter further.

But that hasn't made the questions go away. Jon Ossoff, who'll face Perdue in the Jan. 5 runoff, said on CNN yesterday, "I think that a sitting U.S. senator exploiting his office, exploiting his access to privileged information, exploiting his power to enrich himself, while his own constituents are suffering and dying, absolutely makes Senator Perdue a crook. And he's afraid to come out and debate me, because he won't answer these charges, because he can't defend the indefensible."

Ossoff has challenged Perdue to three pre-election debates. The Republican incumbent, at least for now, has said he will not participate in any of those debates.