Democratic Congressman Tom Malinowski finds himself on defense again as New Jersey Republicans lodge a barrage of attacks against him in wake of an Associated Press report claiming that in the early days of the pandemic the Congressman bought and sold as much as $1 million of stock in companies involved in the Coronavirus response.
According to the AP and a story first reported by Business Insider, two complaints have been filed against Malinowski with the Office of Congressional Ethics for failing to properly disclose trades as required by law.
In an interview with InsiderNJ, Malinowski says he wants to set the record straight on the AP story.
“There is no allegation of trading on insider information or abuse of my office of any kind,” Malinowski said. “The story is solely based on a late filing.”
Malinowski also says the trades were made by his broker based on publicly available information and without his input or prior knowledge. The firm in charge of Malinowski’s portfolio backs him up. In a statement, Gagnon Securities says, “All trades referenced by AP that were made in Congressman Malinowski’s account in 2020, including all short positions, were made by Gagnon Securities pursuant to its discretionary authority and without Congressman Malinowski’s input or prior knowledge.”
“I was late in filing some of the monthly reports — that was my oversight and it’s something for which I have taken full responsibility,” Malinowski stressed.
Malinowski says he’s submitted information to the Office of Congressional Ethics and that conversations have focused on setting up a blind trust.
“A blind trust basically means that all of the investments are transferred to a new investment adviser whom I’ve never met and will never speak to as long as I have the blind trust,” said Malinowksi, who has also co-sponsored a bill that would require all members of Congress to do the same thing.
We reached out to the Office of Congressional Ethics and the office says it cannot confirm or deny an investigation, adding that all inquiries are confidential.
Local New Jersey Republicans refuse to let Malinowski off the hook.
“While Congressman Malinowski was supposed to be working on behalf of the hard-working constituents of the 7th Congressional District, as Hunterdon County struggled through the pandemic, he was instead profiting from our pain,” Hunterdon County Republican Committee Chairman Gabe Plumber said.
“Malinowski hid his stock transactions and broke the law trying to cover up the financial gains he made selling out American companies during the pandemic for his own financial gain.”
“Again, I had no prior knowledge or input,” Malinowski added. “I was able to find out after the fact in order to make the filings. I think the lesson is that elected officials should not be invested in the stock market, period, unless they have a blind trust.”
In 2020, Malinowski narrowly beat his Republican challenger State Senator Tom Kean, Jr., the son of a popular New Jersey governor. Kean, Jr.’s allies were relentless, running a commercial falsely accusing Malinowski of helping to protect child sex predators. That ad was partly responsible for death threats Malinowski says he got from Q’Anon followers.
We’ve reached out repeatedly to Kean, Jr., but he has not responded to our calls. A former Kean, Jr., spokesperson, though, isn’t shy about commenting on Malinowski’s latest stock trades.
“Tom Malinowski broke the law hiding his pandemic profiteering from voters in one of the most competitive elections in the country,” said Harrison Neely, a Republican strategist. “His district cannot trust him to be honest just like they could not trust him to look out for their best interests during one of the most trying times in American history. While small businesses and his neighbors suffered, he personally cashed in on their pain.”
Malinowski says he expected New Jersey Republicans to come out swinging.
“They can’t run on what their party is doing in Washington, which is screwing New Jersey in every possible way,” Malinowski said. “They can’t run on my record. We’re delivering the Gateway Tunnel, we’ve already delivered lower health care costs and we’re fighting to claw back the SALT deductions. The only way they can do this is by manufacturing personal allegations as they tried to do in 2020 with those vile ads.”
Peter Woolley, the director of the School of Public and Global Affairs at Fairleigh Dickinson University in Madison, says he doesn’t expect Malinowski to face formal trouble in Congress.
“A few former Senators and President Trump lowered the bar,” said Woolley, referring to U.S. Senators David Perdue and Kelly Loeffler. Both Senators from Georgia were investigated for their stock trades and eventually cleared. However, Perdue and Loeffler lost their run-off bids for the Senate back in January. Woolley says the complaints filed against Malinowski could become a 2022 Republican campaign theme.
“Ordinary people have a difficulty sympathizing with people who have big stock portfolios, but then again, there are a lot of people in that district (CD-7) who have big stock portfolios, including Malinowski and Kean, Jr.,” Woolley said. “Potentially, there are a lot of people living in glass houses.”
Malinowski’s district could change before his re-election bid. District lines are usually redrawn every 10 years after the release of the U.S. Census Bureau Report. A bipartisan, 13-member commission comprised of six Republicans, six Democrats and an independent chair, makes the ultimate decision.
“I think the New Jersey political establishment will do what’s in their best interest, and if that means
restructuring the 7th to make it more Kean-friendly, they will,” said Peter Jacob, a progressive who lost in the 2018 Democratic Primary in Malinowski’s district. “Besides, the do-nothing Democratic party always needs a scapegoat to blame in order to remain apathetic on the issues that matter and appease the elite. I suppose it will come down to who makes the best deal behind closed doors.”
“It’s always a wild card but I have absolute confidence that my fellow Democrats are going to do everything they can to defend the seats we’ve won,” Malinowski said.
Malinowski faced similar stock trade questions back when he was an Assistant Secretary of State for Democracy, Human Rights, in the Obama administration.
“When I was confirmed for my job at the State Department, I was advised not to own stock in any foreign country that I might find myself working on,” Malinowski said. “So, we looked at the portfolio and there happened to be a Chinese insurance company. I told my broker to sell the stock. I looked at the statement again and noticed it was there and reached out again.”
For now, some Republicans appear to be honing in on one part of the Associated Press report. The AP says in February of 2020, days after members of Congress were briefed on COVID-19, records show Malinowski sold shares in Kimco Realty, a company that owned shopping centers across the country, including in New Jersey. A month later when the Company’s share price dropped by nearly 50 percent, the AP reports, the Congressman bought back far more stock in Kimco worth more money. The controversial practice the AP is referring to is called a “short sale.”
“Congressman Malinowski bet against his own district,” Somerset County GOP Chair Tim Howes said. “Whoever does his trades short sold Kimco Realty, which owned the Bridgewater Promenade, and this was shortly after a members-only briefing on the Coronavirus back in February of 2020.”
“My response to any question of an individual stock sale is that I was not involved in making individual decisions as the brokerage firm has attested,” Malinowski responded.
But it doesn’t appear Republicans will be letting up on Malinowski any time soon. Malinowski, though, says voters have a clear choice – whether they want a Democrat in the 7th Congressional District or a candidate from a party that’s now in the hands of Kevin McCarthy and Marjorie Taylor Greene.
“I am confident that the people who supported me are supporting me and they understand the nature of these attacks,” the two-term Congressman said. “I am confident they understand that Republicans can’t win this seat on the issues, can’t defend their party in Washington, they can’t question my results in terms of what I have delivered for the district and the state, and that the only way they can win is by manufacturing outrage over issues like this just like they did in 2018 and 2020.”
Whether Kean, Jr., will run again remains to be seen but one thing is for certain, Malinowksi’s re-election bid will be a nail-biter.