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Ethics panel releases reports on Malinowski, Kelly, Mooney and Hagedorn

Office of Congressional Ethics probes detail allegations

Rep. Mike Kelly, R-Pa., is being investigated by the House Ethics Committee.
Rep. Mike Kelly, R-Pa., is being investigated by the House Ethics Committee. (Tom Williams/CQ Roll Call file photo)

Four Office of Congressional Ethics reports detailing alleged ethical transgressions by Rep. Tom Malinowski, D-N.J., and Republican Reps. Mike Kelly of Pennsylvania, Alex X. Mooney of West Virginia and Jim Hagedorn of Minnesota were made public on Thursday.

Those reports are taken into consideration by the House Ethics Committee, a panel that is currently investigating the four lawmakers and, unlike the OCE, has subpoena power and can discipline members.

Rep. Alex X. Mooney

CQ Roll Call in August exclusively obtained the OCE report on Mooney, which found he spent thousands of campaign dollars on personal expenses, including at various fast food restaurants and trips to West Virginia resorts. 

Mooney also failed to properly report more than $40,000 in expenditures to the Federal Election Commission, which concealed even more instances of personal use by Mooney, according to the OCE report. Mooney paid his campaign back over $12,000 after the OCE began its inquiry. Using campaign funds for personal use is illegal.

“The OCE report shows the majority of the politically motivated allegations against me were found to lack merit,” Mooney said in a statement. “The remaining allegations either involve legitimate officially-related or campaign expenses at West Virginia businesses or involve campaign expense reporting that is largely technical in nature.  I will cooperate with the House Ethics Committee to resolve any remaining issues. Like President Trump and many other conservative leaders, I will continue to fight through the sea of slanted information and politically motivated leaks that have marred my right to a confidential examination of the facts.”

Rep. Mike Kelly

Kelly represents the congressional district that includes Butler, Pa., the same town he was raised in and lives in currently. Cleveland-Cliffs owns a plant in Butler that employs 1,400 workers. That company is the only remaining American producer of grain oriented electrical steel, which is used in domestic power grid transformers. The plant was at risk of being shut down if not for government action to address foreign steel companies circumventing tariffs and undercutting its business.

On April 28, 2020, Commerce Secretary Wilbur Ross called the CEO of Cleveland-Cliffs and told him the agency soon planned to announce a so-called Section 232 investigation that Cleveland-Cliffs could potentially benefit from. As a result of the Commerce Department’s action, Cleveland-Cliffs decided not to close its plant in Kelly’s hometown. That same day, Kelly’s staff was informed of Commerce’s intent to open an investigation by a senior agency official and Cleveland-Cliffs.

The next day, on April 29, Kelly’s wife, Victoria, bought between $15,001 and $50,000 in Cleveland-Cliffs securities, a trade that was executed shortly after the company decided against issuing termination notices to 13 percent of its workforce, according to the OCE report.

“Victoria Kelly purchased stock in Cleveland-Cliffs just after the Commerce Department advised Cleveland-Cliffs about its planned support — in the form of a self-initiated Section 232 investigation — but before the Department publicly announced this course of action,” the OCE report said.

Victoria bought the Cleveland-Cliffs stock at $4.70 per share and sold it on Jan. 11, 2021, at $18.11 per share, resulting in a profit.

On May 4, 2020, the Commerce Department announced its Section 232 investigation into foreign steel imports that could help Cleveland-Cliffs. Kelly praised the investigation, noting it is the last American producer of electrical steel products crucial to the electrical grid.

“Congressman Kelly has been open and transparent about his required financial disclosures during his decade in the United States House of Representatives, including the inquiry by the House Committee on Ethics,” a spokesperson for Kelly said in a statement. “Details published in news reports regarding those disclosures were found because the Congressman publicly reported his financial records. Both the Congressman and Mrs. Kelly have been, and will continue to be, advocates and supporters of the Butler Works/Cleveland Cliffs plant in Butler, where they are lifelong residents.”

The OCE hired an expert consultant to analyze Victoria’s trading. 

“Ms. Kelly’s purchase of Cleveland-Cliffs stock on April 29, 2020 represented a sharp departure from her investment behavior, leading to the inference that this investment was due to some special event or consideration,” the expert concluded.

The House Ethics Committee’s website notes that a member is prohibited from using their official position for personal gain.

“In summary, Victoria Kelly made an uncharacteristic stock purchase in Cleveland-Cliffs on April 29, 2020 and profited from this purchase. The purchase occurred just after her husband, in the course of his official job duties, learned confidential information about the company,” the OCE report said.

The Pittsburgh-Post Gazette reported on the trade in Sept. 2020.

Rep. Tom Malinowski

Members are required by the STOCK Act to report their securities transactions — exceeding $1,000 — within 45 days of the trade execution. These trades are reported on forms filed with the House called Periodic Transaction Reports, or PTRs.

The OCE found Malinowski “knowingly failed to enter reportable PTR transactions into the online reporting system in accordance with STOCK Act deadlines, intentionally conflated PTR transactions he did report, did not disclose short sales in a consistent manner (or according to his stated intent), and failed to properly disclose assets and transactions on his 2019 annual financial disclosure statement.”

Business Insider previously reported that Malinowski failed to disclose his stock trades.

“The OCE’s report confirms what Congressman Malinowski has consistently stated: that his stock transactions were made solely by his broker, based on publicly available information, and were made without Congressman Malinowski’s input or prior knowledge,” a spokesperson said in a statement. “The Ethics Committee’s inability to resolve this matter at this time was the same outcome for every member included in today’s routine disclosure, and in no way reflects an escalation. In the last 90 days, since receiving the OCE report, the Ethics Committee has not once requested any additional information from Congressman Malinowski.”

Rep. Jim Hagedorn

The Minnesota Reformer reported in 2020 that Hagedorn paid a company owned by a staffer over $100,000 in taxpayer dollars to print mailers. Later that year, Politico reported that Hagedorn appeared to maintain a rent-free campaign office.

The OCE report found Hagedorn used official funds for contracted services with companies owned or controlled by his staffers. It also found his campaign used private office space for free or below fair market value.

“From the moment he learned of the franking issues in his office, Congressman Hagedorn acted in a responsible and transparent manner,” a lawyer for Hagedorn said in a statement. “He self-reported the matter to the Ethics Committee and will continue to work with it to bring it to a conclusion. Moreover, he had no knowledge of the underlying issues and has acted in good faith throughout.”

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