Insider Trading and Federal Conflict of Interest Violations Swept Under the Rug – Mish Talk

When Federal Officials Help Their Own Financial Interests

Here’s a free link to the Wall Street Journal article When Federal Officials Help Companies—and Their Own Financial Interests

Last year, the Federal Deposit Insurance Corp. deliberated over whether to tap Microsoft Corp. as its primary cloud provider. Three key officials involved in the discussions, or their family members, owned shares in Microsoft, including the deputy chief information officer who pushed to pick the company.

By early this year, Microsoft had become the agency’s primary cloud platform.

The Wall Street Journal this fall documented a sweeping pattern of executive-branch officials owning and trading stock in companies affected broadly by the work of their agencies, sometimes in violation of a federal conflict-of-interest law.

The examples identified by the Journal are “very brazen conflicts of interest,” said Craig Holman, a government-ethics expert at the nonpartisan advocacy group Public Citizen.

U.S. law prohibits federal officials from working “personally and substantially” on any matters in which they have a significant financial stake. The rules are aimed at preventing officials from using their influence over policy for personal gain.

At the U.S. Export-Import Bank, an official used her government position to help her husband’s lobbying organization, which was seeking to block or delay a policy change proposed by the Trump administration.

On Feb. 19, 2019, Mike McGarry, the Cruise Lines International Association Inc.’s senior vice president of global government affairs, sent an email about the matter to his wife, Natalie McGarry, who was a top adviser at the Ex-Im Bank. The bank, which helps companies finance sales, doesn’t have any authority over cruise lines, but Mrs. McGarry had something important: a contact in the White House.

In 2021, agencies referred 55 ethics matters to the Justice Department. Prosecutors declined to take up all but seven.