Press release from Campaign for Accountability:
WASHINGTON, D.C. – Today, Campaign for Accountability (CfA) filed a second complaint with the Securities and Exchange Commission and the Senate Select Committee on Ethics, alleging Sen. Robert Corker (R-TN) concealed information about his stake in several hedge funds – funds managed by his campaign donors – in violation of federal law and Senate rules.
CfA Executive Director Anne Weismann said, “Sen. Corker hasn’t just made a mockery of Senate disclosure rules, he may have committed a crime. Authorities should investigate why Sen. Corker was so intent on hiding the underlying assets of these funds that he filed inaccurate disclosure forms year after year.”
Between 2013 and 2015, it appears Sen. Corker failed to disclose the underlying assets in at least six hedge funds in violation of Senate rules. In addition, Sen. Corker may have failed to disclose at least $2 million in income from the funds.
Senate ethics rules require members to disclose the underlying assets in funds that do not qualify as Excepted Investment Funds (“EIF”s). To qualify as an EIF, a fund must 1) be widely held, 2) be publicly traded/available or widely diversified, and 3) the filer cannot exercise control over the underlying financial interests. If the fund does not meet these three criteria, the underlying assets of the funds must be disclosed. To be widely diversified, a fund must have over 100 investors.
Sen. Corker invested in funds managed by three Tennessee-based firms: Gerber/Taylor Management Company, TSWII Management Company and Pointer Management, LLC. In some cases, letters written by Gerber/Taylor that Sen. Corker submitted to the Senate ethics committee appear to confirm that not all of the funds in which the senator invested had more than 100 participants. In other cases, forms submitted by the hedge funds to the SEC, reveal the funds had fewer than 100 investors.
Since 2004, the top employees of Gerber/Taylor, TSWII, Pointer, and their families have donated $204,020 to Sen. Corker’s Senate campaigns and $75,000 to his leadership PAC. The founder of TSWII, L. H. Caldwell III, was among the co-chairs of Sen. Corker’s campaign committee ahead of his 2006 election. Since 2004, Mr. Caldwell and his family have donated $73,280 to Sen. Corker’s campaigns and $20,000 to his leadership PAC. Notably, Caldwell’s three younger children made 13 contributions to Sen. Corker’s campaigns between December 2004 and March 2011. The occupation of the children reported to the FEC for these contributions was “student” and the address provided was for the Caldwell family home in Lookout Mountain, Tennessee, even when they had jobs and lived elsewhere, raising questions about whether Mr. Caldwell was the real donor.
In November, CfA filed a complaint alleging Sen. Corker may have engaged in insider trading and made false statements on his personal financial disclosure forms. The complaint details how Sen. Corker made 70 trades of stock – many of which were not disclosed — in a real estate investment company CBL & Associates Properties. Some of Sen. Corker’s trades of CBL stock closely preceded company announcements that led to changes in the stock’s price and seemingly resulted in the senator making millions of dollars. CBL employees have been major contributors to Sen. Corker’s campaigns, and Sen. Corker previously had a business relationship with a CBL affiliate.
“It’s clear Sen. Corker has made a fortune investing with his top campaign contributors and has broken ethics rules to avoid scrutiny of these relationships. The SEC, the Senate ethics committee and the Department of Justice should all take a long, hard look and see what, exactly, the senator has been working so hard to hide,” Ms. Weismann said.
Read the full complaint here.
Note: Post on the first complaint HERE, including Corker’s contention that the allegations are false and politically motivated. After revealing that some things were omitted from a disclosure statement, Corker said that “technical errors” were involved, HERE.
UPDATE: Email from Micah Johnson, Corker’s communications director: “This is yet another baseless accusation by this political special interest group. These claims are categorically false and nothing more than a smear campaign. When amending the senator’s financial disclosure report, our office worked directly with the Senate Ethics Committee to ensure items were reported accurately and in line with Senate guidelines.”