Rep. Tom Malinowski, a Democrat from New Jersey. Tom Williams/CQ-Roll Call via Getty Images
- Insider reported in March that Malinowski had failed to report dozens of stock trades.
- House ethics investigators voted 5-1 to refer their findings to the House Committee on Ethics.
- The Democrat-led House Committee on Ethics confirmed it’s continuing its own inquiry.
The independent Office of Congressional Ethics found “substantial reason to believe” that Democratic Rep. Tom Malinowski of New Jersey violated federal rules or laws designed to promote transparency and defend against conflicts of interest, according to investigation documents released Thursday.
In its 5-1 vote, the Office of Congressional Ethics formally referred its Malinowski investigation to the Democrat-led House Committee on Ethics, which on Thursday confirmed will continue reviewing the matter.
The investigation involved the question of whether Malinowski failed to properly disclose dozens of personal stock trades he made during 2019 and 2020, which Insider first reported in March.
Office of Congressional Ethics report on Rep. Tom Malinowski, a Democrat from New Jersey House Committee on Ethics
During the Office of Congressional Ethics’ investigation, Malinowski told investigators that his failure to properly disclose his personal investments was “carelessness on my part, which I regret and take full responsibility for. This is not a justification or excuse.”
Malinowski continued: “I have an overwhelmingly busy job … there is nothing in my financial world that I was trying to hide, but I did not put enough pressure on myself to do it” within federal deadlines.
In an August 26 letter to House Committee on Ethics Chairman Ted Deutch, a Democrat, and ranking member Jackie Walorski, a Republican, Malinowski attorneys Charles Borden and Samuel Brown asked for leniency.
They argued that the congressman in no way engaged in insider stock trading. They also said that Malinowski has “worked diligently to correct his reports and put in place measures to prevent any future problems” and that “no further action by the committee is warranted and this matter should be dismissed.”
Fine or even expulsion possible
The House Committee on Ethics has a range of options. It could do nothing — the most common outcome in cases before this committee tasked with policing its own. It also has the power to recommend to the full House a fine, reprimand, censure, or expulsion of a member.
The Malinowski investigation centers around his alleged violation of the Stop Trading on Congressional Knowledge Act of 2012 — or STOCK Act — the law in part requires members of Congress to disclose any individual stock trade they make within 30 to 45 days of making the trade, depending on the kind of trade.
In March, Insider revealed that Malinowski had failed to disclose dozens of stock trades during 2019 and 2020 that together were worth at least $671,000 and as much as $2.76 million.
The trades included more than two-dozen stock purchases and sales during the first several weeks of the COVID-19 pandemic, according to non-public information Malinowski’s office released to Insider after a reporter asked for it.
On March 19, 2020, for example, Malinowski sold up to $15,000 worth of stock in the New York-based Chembio Diagnostics Inc., an infectious-disease testing company whose offerings include COVID-19 testing kits. Chembio Diagnostics’ stock price closed at $2.93 a share that day — a significant increase from its close of $2.36 a share three days earlier, when the stock hit a five-year low.
“Filing these disclosures late was an oversight that he is taking steps to correct,” Colston Reid, Malinowski’s chief of staff, said at the time.
“This was not an effort on the part of the congressman to conceal any trade activities,” Malinowski’s spokesperson Amanda Osbourne added, separately.
But Malinowski’s stock drama was just beginning.
Days after the stock trade revelation, two nonprofit watchdog organizations — the Campaign Legal Center and the Foundation for Accountability and Civic Trust — asked the independent Office of Congressional Ethics to investigate Malinowski.
Well into the spring, Malinowski continued to aggressively trade stocks. His office said a financial adviser made the transactions on his behalf without the congressman’s “regular input.” But Malinowski again failed to make timely disclosures of up to $540,000 worth of stock trades from April, prompting another ethics complaint.
At that point, Malinowski said he would pause trading stocks. Then, in August, he formed a Congress-approved blind trust, operated by an independent trustee, that will buy and sell investments on Malinowski’s behalf “without any participation in, or knowledge of, such decisions” by Malinowski himself, according to the terms of the trust.
On September 7, 2021, the Committee on House Ethics formally confirmed that the Office of Congressional Ethics had on July 23 referred its investigative findings on Malinowski to the committee.
Malinowski’s money in politics reputation
Malinowski has in part built his career in elected politics on a platform of open government and financial transparency.
His 2020 campaign platform said the congressman “championed comprehensive reforms to limit the role of money in politics and increase transparency to ensure regular people — not corporations or special interests — have the strongest voices in Washington.”
And since he entered Congress in 2019, Malinowski has sponsored several bills regarding financial transparency and political money.
One required public companies to obtain shareholder authorization before making certain political expenditures. Another called for creating a public database to make transportation funding more transparent. A third targeted the finances of “scam PACs” — political committees that spend most of their money on nonpolitical activities.
Malinowski represents what’s today one of the most competitive House districts in the nation and will likely face a challenging — and expensive — re-election campaign in 2022.
He is also among 40 members of Congress — Republicans and Democrats alike — that Insider and other news organizations have this year found to have violated the federal conflict-of-interest and transparency law.
“The Ethics Committee has been put in an unprecedented position where it must determine the path forward for the now dozens of members of Congress from both parties who have been tripped up by the reporting requirements of the STOCK Act, and must do so within the partisan environment this situation has created,” Malinowski’s congressional office said Thursday in a statement.
But Kendra Arnold, executive director of the Foundation for Accountability and Civic Trust, which filed one of the ethics complaints against Malinowski, called for the House Committee on Ethics to punish Malinowski.
“The law requiring congressional financial disclosures are extremely important to determine whether members have wrongfully profited from their position, and Rep. Malinowski has shown a repeated and complete disregard for it,” Arnold said. “No member is above the law, and we hope the Ethics Committee upholds this important law.”