JOHNSON CITY, Tenn. (WJHL) – Some of Tennessee First District Congressman Dr. Phil Roe’s (R-Johnson City) early 2020 stock trades have drawn national attention after The Tennessean newspaper published results of an investigation into the outgoing congressman’s trading activity.
A Tuesday report in The Tennessean laid out some details surrounding close to 700 trades made in the first several months of 2020 — significantly more than any other member of Congress reported as required by a 2012 law.
The Tennessean report, based on several weeks of exhaustive research into Roe’s hundreds of trades, showed early January purchases of tech stocks like Zoom and biomedical stocks like Moderna. The report also pointed out sales by Roe of stocks such as Royal Caribbean and Disney on March 6, before those companies temporarily halted operations due to the pandemic.
Those records, also reviewed by WJHL, show for instance that Roe purchased Zoom stock — valued at a total of between $1,000 and $15,000 — on Jan. 6 at $70.32 per share and again on Jan. 31 at $76.30 per share. Roe sold Zoom stock for somewhere in that same total range April 20, when it was worth $148.99 per share.
On March 6, Roe sold between $15,000 and $50,000 worth of Delta Airlines stock for $45.89 per share. At the end of trading yesterday, the stock was valued at $25.65 per share. Delta shares had actually begun their steep drop Feb. 24 after trading near $60 for most of 2020.
Use of Zoom as a remote communication tool has become ubiquitous during the pandemic and its price has roughly doubled since January. Moderna and several other companies whose stock Roe purchased Jan. 6 have seen their share prices rise due to their work on vaccine trials or other things related to fighting the pandemic and its effects.
Roe purchased between $1,000 and $15,000 worth of Moderna stock Jan. 6 at $18.13 per share. That stock had held steady between about $13 a share and $22 a share from June 2019 into late February 2020, when it began a meteoric rise.
Roe’s records don’t show him selling Moderna stock prior to mid-April. It reached $80 a share May 18 and has since dropped steeply and become embroiled in insider trading allegations of its own. It ended the day Wednesday at $52.18 per share.
If Roe sold any Moderna stock before May 26, it may not be revealed until August. The Tennessean report noted that Roe filed a request with the House clerk’s office to delay further reporting of his financial activity and now has until Aug. 13 to report his latest financial activities.
Roe defended his actions in an interview with WJHL Wednesday and accused The Tennessean of “a political hit job.”
Though the public record so far shows no clear proof Roe benefited from early knowledge about potential COVID19-related business impacts and bought or sold stocks accordingly, a Nashville public leadership expert said Wednesday it’s the media’s role to follow through.
The media have “put it out there that ‘yes, this looks as if it could be – we don’t know – but there could be an abuse of power there,’” Linda Peek Schacht said. “And if there is, then your responsibility I think as reporters who have raised it is to follow the story to the end.”
Schacht added a caveat. “What is available right now in the public record, while it may seem like a lot of trades, while the timing could be suspect, there isn’t anything yet that proves that the Congressman acted on information that the rest of the world did not have.”
Schacht served in the Jimmy Carter administration and in communications for former West Virginia Senator Robert Byrd. The former fellow at Harvard’s Center for Public Leadership led Lipscomb University’s Andrews Institute for Civic Leadership from 2010-2015.
The Tennessean reported on Roe’s high volume of trading and purchases of medical and tech-related stocks based on recent public disclosures, as well as sales of other stocks that have fallen steeply since March.
Roe’s office has said he leaves his financial trading in others’ hands. The newspaper reported on several instances in which Roe referred to briefings and other work related to his Congressional service that suggested the possibility he could have had information that might influence purchase and sales decisions.
Schacht said the typical course of action would be for the House Ethics Committee to consider whether to investigate Roe’s trades to determine whether there was any wrongdoing.
Public losing trust in government
Schacht said that studies by the Pew Research Center and others have shown a steadily eroding trust in government and politicians. Coupled with recent news about potential trading abuses by several senators, Roe’s trading — which The Tennessean noted occurred at much higher volumes than most representatives — was likely to draw scrutiny.
The paper reported Roe conducted 680 transactions in the first quarter of 2020. Those reports are required as a result of the 2012 STOCK (Stop Trading on Congressional Knowledge) Act.
Schacht said those types of disclosure laws are essential, but that they haven’t created an increasing sense of public trust in government.
“So there’s a real lack of trust in government that is just exacerbated when stories like this come out, but the reason that the watchdog groups exist and that the laws exist is to make sure that when there is legitimate wrongdoing it can be first looked at in the House Committee on Ethics and then if there is something that requires additional action then it’s referred to the appropriate authorities.”
Schacht noted polls show people also have a decreasing level of trust that groups like Congress will sufficiently police their own.
“So when I say something like, ‘it will go to the house committee on ethics,’ there’ll be many Americans who’ll say well they’ll just whitewash it anyway. My experience is not that they necessarily do that, but that’s the environment in which we live.”