- A Democrat running for Congress in California failed to properly disclose investments in Moderna and Pfizer.
- Jay Chen is running against GOP Rep. Michelle Steel in the state's 45th Congressional District.
A Democrat in California running for U.S. Congress failed to report his investments in two pharmaceutical giants behind leading COVID-19 vaccines, Insider found.
Jay Chen, who's running against Republican Rep. Michelle Steel in California's 45th Congressional District, did not reveal until July 26 that he owned thousands of dollars of stock in both Moderna and Pfizer — hours after Insider contacted him with records indicating his ownership of his investments.
Federal law requires congressional candidates to publicly disclose their stock holdings in a certified, public report soon after announcing their candidacies.
Congress is actively considering banning members of Congress from trading stocks altogether because of widespread violations of the law and repeated examples of financial conflicts of interest.
Chen's campaign manager, Lindsay Barnes, told Insider in an email that the error was the result of "an honest misunderstanding" of disclosure requirements, and that that Chen sold his stock in the two companies in early 2021.
Chen had previously disclosed his Pfizer and Moderna stock holdings in an obscure state-level document, known as a "California Form 700," that he filed because of service on the Mt. San Antonio College's board of trustees.
Chen's California disclosure, which was filed in April 2021 and obtained by Insider, noted that he personally invested between $2,000 and $10,000 in both Pfizer and Moderna stocks in late 2020, immediately before the two companies began shipping millions of dozes of their COVID-19 vaccines.
When Chen, as a congressional candidate, submitted his annual federal financial disclosure to Congress in August 2021, he included each of his 31 investments listed on the California Form 700 — except for the Moderna and Pfizer stocks. He made no mention of them in his 2022 disclosure, either.
"Due to an honest misunderstanding in moving between state to federal disclosure requirements, the campaign unintentionally omitted the transaction within its federal disclosure," Barnes said. "As soon as the campaign realized this discrepancy, we immediately amended the report."
A congressional candidate could be fined if he or she "knowingly and willfully falsifies a statement or fails to file a statement" in accordance with US House guidance, although officials rarely pursue such investigations.
While candidates and members of Congress are required to submit financial disclosures to the House Ethics Committee, the committee does not proactively check to ensure the filings are complete and error-free.
Compare that to the federal government's campaign finance sector, where the Federal Election Commission has workers investigating the minutiae of each and every campaign's financial disclosures to ensure they're complying with federal laws and rules.
Congress considering stock-trade ban
The discovery of Chen's error comes at time when members of Congress are debating whether they and their spouses should even be allowed to trade stocks.
On Thursday, Punchbowl News reported, and Insider confirmed, that House Democrats are close to unveiling a Congressional stock trade ban that would make lawmakers, their spouses, and staffers put their assets into a blind trust or sell them altogether.
When asked, Chen's campaign manager told Insider that Chen believes that members of Congress should "not be allowed to trade individual stocks" and that he "will place his investments into a blind trust if elected."
Donald Sherman, the senior vice president and chief counsel at nonpartisan watchdog group Citizens for Responsibility and Ethics in Washington, told Insider that Chen's failure to disclose the Moderna and Pfizer investments further underscores the need for a congressional trading ban.
"The fact that members and candidates sometimes inadvertently, sometimes intentionally, withhold information from these forms is exactly why it is a smarter policy to have an outright ban on members of Congress buying, trading, or owning individual stocks," Sherman said.
Insider and other outlets have catalogued 66 members of Congress who've violated the federal Stop Trading on Congressional Knowledge (STOCK) Act of 2012, which requires members to publicly disclose their investments within 45 days of making them, among other mandates.
Insider's "Conflicted Congress" investigation also found numerous conflicts of interest within federal lawmaker's personal investments. Among them: Dozens of members of Congress invested in COVID-19 vaccine makers Pfizer, Moderna, and Johnson & Johnson at a time when lawmakers were voting on pandemic-related legislation together worth trillions of dollars.
According to Sabato's Crystal Ball at the University of Virginia's Center for Politics, the race between Steel and Chen "leans Republican" come November. California's 45th Congressional District is one of the nation's few congressional districts with both a large Asian population and two Asian candidates running against one another.
Chen is trailing in Steel in money raised, according to research organization OpenSecrets — Chen has raised $3 million compared to Steel's $4.7 million, though both campaigns have nearly the same amount of cash on hand, about $2 million.