Republican Sen. James Inhofe, chairman of the Senate Armed Services Committee, bought tens of thousands of dollars in defense stocks just days after he pushed for record-breaking Pentagon budget of $750 billion, according to the Daily Beast. When he was asked by the Daily Beast about the stocks, a representative for the senator said he would cancel the purchase and avoid defense investments in the future.
Inhofe took over the chairmanship of the Armed Services Committee this August, after the death of previous chairman Sen. John McCain.
From the Daily Beast:
Inhofe... has repeatedly pressed President Donald Trump to dramatically scale up the Pentagon’s annual budget, which currently stands at $717 billion. Last week, after Trump hinted he would like to scale back parts of that budget, the Senator had a meeting with the president and Defense Secretary James Mattis, after which it was announced that the administration would seek even more defense funding: a record $750 billion in spending for fiscal year 2020.
News of that budget request broke on Sunday. On Tuesday, Inhofe’s financial adviser bought him between $50,000 and $100,000 in stock in defense contractor Raytheon, according to documents filed with Senate ethics officials.
As the Daily Beast points out, senators are barred from making investments based on non-public knowledge. But because the news of the Pentagon budget was already public at the time Inhofe made the purchase, it probably doesn’t count as insider trading, no matter how involved Inhofe was with the increased spending.
Inhofe’s spokesperson told Daily Beast that he was not directly involved in the purchase:
“All of Senator Inhofe’s financial transactions are handled by a third-party advisor,” wrote spokesperson Leacy Burke in an email. “The senator has had no involvement in and has not been consulted about his stock transactions.”
“[T]he Senator has called his financial advisor and they reversed, or busted, the transaction,” Burke added. “This means that the transaction was canceled before it was settled; the Senator never took ownership of it.”
But ethics experts say Inhofe may still possess insider information.
“The requested defense budget increase was no longer ‘nonpublic’ because it had already been publicized,” Brendan Fischer, the director of federal reform programs at the Campaign Legal Center, told the Daily Beast. “But Inhofe likely has other nonpublic inside information, such as insight into what the final budget will look like and which industries stand to benefit.”
More senior members of Congress are most often chosen by their parties to lead committees, though it isn’t required. Unless his fellow Republicans decide to vote against tradition Inhofe will likely retain his position as Armed Services chair when the next Congress takes over.