Newly — and fiercely — critical of using public office for personal financial gain, Gov. Rick Perry this week unveiled a campaign ad demanding that lawmakers who use “insider knowledge to profit in the stock market” be jailed, and he rolled out an overhaul plan of the federal government that would make that possible by criminalizing insider trading by members of Congress.
Some longtime observers of the Texas governor say his effort to portray himself as a reform-minded government “outsider” is inconsistent with his record, which they argue is peppered with instances in which his personal and political relationships became entangled in ways that helped him profit financially.
Craig McDonald, director of the left-leaning money-in-politics group Texans for Public Justice, said that despite Perry’s comments this week, over the years the Texas governor has “taken advantage of a number of insider deals himself,” from getting a great bargain on real estate purchased from a friend and fellow lawmaker in Horseshoe Bay, to a seemingly too-good-to-be-true 1996 stock deal.
“When it comes to insider cronyism,” McDonald said, “Perry does not have clean hands.”
Perry’s campaign communications director, Ray Sullivan, said that any suggestions that the governor’s financial dealings have been anything but above board are politically motivated, and that Perry’s “professional and personal decisions are highly transparent and continually pass muster.”
Sullivan said Perry’s personal investments were in a blind trust for his entire gubernatorial tenure, until he dissolved it in September. He has released decades worth of personal tax returns, in addition to required Texas Ethics Commission disclosures. Sullivan said the Securities and Exchange Commission’s examination, which was later dismissed, of one of Perry’s 1996 stock trades was the result of attacks from his opponents during his 1998 race for lieutenant governor.
Texas publications have tracked Perry’s every move, and land deals are no exception.
In the months leading up to his 2010 gubernatorial re-election, The Dallas Morning News reported that Perry had purchased land in Horseshoe Bay from his longtime friend and fellow state lawmaker, Troy Fraser, for $150,000 less than its appraised value of $450,000. Perry sold the property in 2007 for more than $1 million.
In 2002, the Houston Chronicle reported that Perry had transferred 60 acres of Austin land he owned into a blind trust right before the 1999 Texas Legislature met. His trust sold the property for a profit a few days after then-Gov. George W. Bush signed legislation that allowed development on the land. Back then, Perry spokesman Sullivan told the Chronicle the decision was made “by the trustee, not the governor.”
And in September, The Huffington Post reported that federal authorities investigated Perry two years after a 1996 transaction in which he bought 2,800 shares from Kinetic Concepts Inc., a health technology company owned by Dr. James Leininger, a top donor to Perry and to Republicans. A month later, Perry went on to sell 8,000 shares of his Kinetic stock, making $38,000 off the deal.
In a 1998 interview with the Morning News, Perry said he spoke with Leininger on the same day his stockbroker made the purchase but that they never mentioned the stocks, and that the timing was a coincidence. Though an anonymous Austin attorney’s reports of Leininger offering Perry a “stock tip” spawned a federal inquiry, campaign spokesman Mark Miner told The Huffington Post that he was only aware that the Securities and Exchange Commission “reviewed the matter and dismissed it.”
The governor’s critics are unpersuaded.
“If Perry thinks members of Congress belong in jail, what would he think about an elected official who purchased 2,800 shares of stock after speaking with that company’s CEO on the same day a giant investment group purchased 2.2 million of its shares?” said Chris Harris, the head of American Bridge 21st Century, a progressive, anti-Republican political action committee.
Perry’s comments about insider trading in his major policy speech in Iowa on Tuesday and in a 25-second ad his campaign released on Monday appeared to be a response to a 60 Minutes report that aired Sunday outlining the well-timed (and legal) stock market trades by lawmakers who are privy to sensitive information on industries they regulate. So far, Perry has been the only presidential candidate to chastise members of Congress, calling on them to outlaw insider trading in their midst. (Watch that portion of Tuesday’s speech below.)
Lawmakers “have abused the public’s trust, trading on inside information to pad their stock portfolios,” Perry said. “Congress has proven it can’t be trusted to watch our money, and now it’s clear they can’t be trusted with theirs.”
Business Insider Emails & Alerts
Site highlights each day to your inbox.