Robert Faturechi

Trump Media outsourced jobs to Mexico even as Trump pushed 'America first'

Former President Donald Trump’s social media company outsourced jobs to workers in Mexico even as Trump publicly railed against outsourcing on the campaign trail and threatened heavy tariffs on companies that send jobs south of the border.

The firm’s use of workers in Mexico was confirmed by a spokesperson for Trump Media, which operates the Truth Social platform. The workers were hired through another entity to code and perform other technical duties, according to a person with knowledge of Trump Media. The reliance on foreign labor was met with outrage among the company's own staff, who accused its leadership of betraying their “America First” ideals, the person said.

The outsourcing to Mexico helped prompt a recent whistleblower letter from staff to Trump Media’s board that has been roiling the company.

That complaint, reported by ProPublica last month, calls for the board to fire CEO Devin Nunes, a former Republican congressman. The letter alleges he has “severely” mismanaged the company. It also asserts the company is hiring “America Last” — with Nunes imposing a directive to hire only foreign contractors at the expense of “American workers who are deeply committed to our mission.”

“This approach not only contradicts the America First principles we stand for but also raises concerns about the quality, dedication, and alignment of our workforce with our core values,” the complaint reads.

A Trump Media spokesperson said the company uses “two individual workers” in Mexico. “Presenting the fact that [Trump Media] works with precisely two specialist contractors in Mexico as some sort of sensational scandal is just the latest in a long line of defamatory conspiracy theories invented by the serial fabricators at ProPublica,” the spokesperson said.

The spokesperson declined to answer other questions about the company’s Mexican contractors, including how much they’ve been paid, how many have been used over time and how their hiring squares with Trump’s promises to punish firms that send jobs outside of the U.S. The Trump campaign did not respond to questions.

For a company of its prominence, Trump Media has a tiny permanent staff, employing just a few dozen people as of the end of last year, only a portion of whom work on the Truth Social technology.

Trump Media’s hiring of Mexican coders also prompted frustration within the staff, the person with knowledge of the company said, because they were perceived by staff to not have the technical expertise to do the work.

On its homepage, Truth Social bills itself as “Proudly made in the United States of America. 🇺🇸”

Both as president and in his campaign for a second term, Trump has criticized companies that send jobs abroad, particularly to Mexico. If elected, he has pledged to “stop outsourcing” and “punish” companies that send jobs abroad.

For example, Trump recently threatened agricultural machinery giant John Deere with tariffs if it went through with plans to move some of its manufacturing to Mexico.

“I’m just notifying John Deere right now, if you do that, we’re putting a 200 percent tariff on everything you want to sell into the United States,” Trump said.

He has made a similar threat against automakers building cars in Mexico, demanding they hire American workers and manufacture domestically.

“I'm not going to let them build a factory right across the border,” Trump promised, “and sell millions of cars into the United States and destroy Detroit further."

Trump owns nearly 60% of the social media company, a stake worth around $3.5 billion at the stock’s Friday closing price — more than half of the former president’s net worth.

The results of the election are widely seen as a major factor in the future value of the company. As the Nov. 5 election draws closer, Trump Media’s stock price has fluctuated wildly even as little or nothing has changed in the company’s actual business, which generates scant revenue. The stock closed Friday down 40% from its recent peak on Tuesday. Despite that drop, it has still nearly doubled since the beginning of October.

One Trump Media board member, Eric Swider, offered a defense of relying on foreign labor in a statement to ProPublica from his lawyer.

“President Trump maintains an America First policy, which includes prioritizing American workers. Trump Media, however, is a global multi-media company. For a global multi-media company to utilize subcontractors, which in turn may utilize coders located in a foreign country, is a practice common to the industry,” the statement said. “Such global multi-media companies like Trump Media would have no right to control the employment decisions of its subcontractors, which may employ workers in a multitude of different countries in addition to the United States.”

Swider, a businessman based in Puerto Rico, serves on the board alongside better known figures such as Donald Trump Jr. and Linda McMahon, the former Trump cabinet member who is now co-chair of his transition team.

The outsourcing to Mexico is not the only instance of Trump Media relying on foreign workers. ProPublica previously reported that the company used a foreign firm to source labor in the Balkans.

Nunes, for his part, is quoted in a new book about Truth Social, “Disappearing the President,” boasting about his ability to keep costs down at Trump Media, though he didn’t mention outsourcing.

“Nobody grew as fast as we did. I don't think there's any other example even close to us out there, especially with as little money as we spent,” Nunes said. “Don't forget that. We built this for a fraction of what these other companies were built for.”

Do you have any information about Trump Media that we should know? Robert Faturechi can be reached by email at robert.faturechi@propublica.org and by Signal or WhatsApp at 213-271-7217. Justin Elliott can be reached by email at justin@propublica.org or by Signal or WhatsApp at 774-826-6240.

Mica Rosenberg contributed reporting.

Whistleblower slams Trump Media for outsourcing jobs abroad as betrayal of 'America First'

An internal whistleblower complaint at Trump Media calls for CEO Devin Nunes to be fired, alleging he has “severely” mismanaged the company and opened it to “substantial risk of legal action” from regulators, according to a copy reviewed by ProPublica.

The letter also says that former President Donald Trump’s company is hiring “America Last” — alleging that Nunes imposed a directive to hire only foreign contractors at the expense of “American workers who are deeply committed to our mission.”

“This approach not only contradicts the America First principles we stand for but also raises concerns about the quality, dedication, and alignment of our workforce with our core values,” the letter says.

Trump’s promise to “stop outsourcing” and “punish” companies that send jobs abroad has been a centerpiece of his political career, including his current campaign for president.

The letter also accuses Nunes, a former Republican congressman, of hiring unqualified members of his inner circle and being dishonest with employees at the company, which runs the social media platform Truth Social.

ProPublica reported this month that several executives and staffers had been forced out of the company, and people involved with Trump Media believed the ousters were retaliation in the wake of a whistleblower complaint. The complaint has been the subject of intense interest among former employees, according to interviews and records of communications among former employees. Several people with knowledge of the company had told ProPublica the concerns revolve around alleged mismanagement by Nunes.

No specific employee signed the letter that was reviewed by ProPublica. It claims to represent “over half” of the company’s staff, including “multiple department heads and C-level officers.” The copy reviewed by ProPublica has been circulating among people connected to the company, and it’s unclear whether there are any differences between it and the version recently submitted to Trump Media’s board.

The copy reviewed by ProPublica is addressed to the audit committee of the board and says it was submitted through the company’s anonymous whistleblower channel.

Trump Media declined to answer detailed questions about the whistleblower complaint or provide comment from the board. But the company’s lawyer in a letter accused ProPublica of writing another in a “series of hit pieces” and “once again basing it upon unreliable sources, attempting to paint a picture of internal turmoil.”

In a previous statement, the company’s lawyer said in a letter that Trump Media “strictly adheres to all laws and applicable regulations.”

Nunes and the Trump campaign did not respond to questions.

The whistleblower complaint paints a picture of turmoil and profound problems in the company at a time when Trump Media’s stock has soared nearly 150% in less than a month, pushing the company’s market value to roughly $6 billion. Even though Truth Social generates virtually no revenue, the company’s stock has attracted enormous interest from Trump fans and speculators.

The stock’s rally has generated a windfall, at least on paper, for Trump, whose majority ownership stake in the company is now worth more than $3 billion. (He recently said he has no plans to sell.)

Among the company’s board members are Trump’s son Don Jr. and two of his former cabinet members: Robert Lighthizer, the former U.S. trade representative, and Linda McMahon, who headed the Small Business Administration and is a major donor and current co-chair of Trump’s transition planning committee.

After the ProPublica story was published this month, an attorney representing Trump Media, Jason Greaves of Binnall Law Group, sent ProPublica a letter demanding an “immediate retraction.” The letter described the article as “false and defamatory” but provided no evidence showing anything in the story was inaccurate.

Following the whistleblower complaint to the board, the company enlisted an outside lawyer to investigate and interview staffers, a person with knowledge of the company had told ProPublica. It’s not clear what the result of that review was or whether it’s ongoing. Governance experts told ProPublica that company boards have a duty to address red flags that suggest corporate wrongdoing.

In perhaps the most serious charge, the letter alleges that Nunes’ “missteps have put us at substantial risk of legal action with our regulators, vendors, shareholders, and employees, and have already resulted in litigation.”

The letter does not give examples of what Nunes has done that could risk action by regulators.

The letter says that not only is Trump Media understaffed — with just “20 technical employees” — but that Nunes has blocked the hiring of Americans. LinkedIn profiles and an invoice obtained by ProPublica show about half a dozen people listed as based in the Balkans doing work for Trump Media, in tasks including software engineering and customer support.

The front page of Truth Social contains the tagline: “Proudly made in the United States of America. 🇺🇸”

The whistleblower letter portrays Nunes, who left a two-decade career as a California congressman in 2022 to become CEO of Trump Media, as ill-equipped to run a tech company.

“Mr. Nunes has consistently lied, targeted employees, and mishandled company resources by placing critical functions in the hands of unqualified members of his inner circle,” it says.

The letter doesn’t give examples of Nunes’ alleged lies or identify the members of his inner circle.

The tone of the letter is more in sorrow than in anger.

“We have approached this with patience, kindness, and grace, hoping for improvement, but the situation has only deteriorated,” the letter states, adding, “We remain fully committed to the mission of restoring and defending free speech on social media.”

Another concern in the letter is about money. Employees were pressured to sell their shares of the company at $20 before it went public, leaving them without a stake in the enterprise and costing them financially, according to the letter. The company’s stock was briefly trading at more than three times that price after it went public in March. After dipping as low as $12 in September, it closed this week above $29.

The letter includes a warning: If the board does not act, the problems could spill into public view and Trump Media could be gravely damaged.

“The more these internal failures — ranging from leadership mismanagement and broken promises to legal vulnerabilities — remain unaddressed, the more likely they are to leak out, likely triggering a PR crisis,” the letter says. “If these issues become public, they will severely tarnish Truth Social’s reputation, erode public trust, and draw negative media attention.”

Do you have any information about Trump Media that we should know? Justin Elliott can be reached by email at justin@propublica.org or by Signal or WhatsApp at 774-826-6240. Robert Faturechi can be reached by email at robert.faturechi@propublica.org and by Signal or WhatsApp at 213-271-7217.

Top execs exit Trump media amid allegations of CEO’s mismanagement and retaliation

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

Former President Donald Trump’s media company has forced out executives in recent days after internal allegations that its CEO, former Rep. Devin Nunes, is mismanaging the company, according to interviews and records of communications among former employees.

Several people involved with Trump Media believe the ousters are retaliation following what they describe as an anonymous “whistleblower” complaint regarding Nunes that went to the company’s board of directors.

The chief operating officer and chief product officer have left the company, along with at least two lower-level staffers, according to interviews, social media posts and communications between former staffers reviewed by ProPublica. The company, which runs the social media platform Truth Social, disclosed the departure of the chief operating officer in a securities filing Thursday afternoon.

ProPublica has not seen the whistleblower complaint. But several people with knowledge of the company said the concerns revolve around alleged mismanagement by Nunes. One person said they include allegations of misuse of funds, hiring of foreign contractors and interfering with product development.

In a statement, a spokesperson for Trump Media did not answer specific questions but said that ProPublica’s inquiry to the company “utterly fabricates implications of improper and even illegal conduct that have no basis in reality.”

“This story is the fifth consecutive piece in an increasingly absurd campaign by ProPublica, likely at the behest of political interest groups, to damage TMTG based on false and defamatory allegations and vague innuendo,” the statement said, adding that “TMTG strictly adheres to all laws and applicable regulations.”

Trump Media’s board comprises a set of powerful figures in Trump’s world, including his son Donald Trump Jr., former U.S. Trade Representative Robert Lighthizer and the businesswoman Linda McMahon, a major donor and current co-chair of Trump’s transition planning committee.

Nunes was named CEO of the company in 2021, with Trump hailing him as “a fighter and a leader” who “will make an excellent CEO.” As a member of Congress, Nunes was known as one of Trump’s staunchest loyalists.

After the internal allegations about Nunes were made at Trump Media, the company enlisted a lawyer to investigate and interview staffers, according to a person with knowledge of the company.

Then, last week, some employees who were interviewed by the lawyer were notified they were being pushed out, the person said. The employees being pushed out include a human relations director and a product designer, along with Chief Operating Officer Andrew Northwall and Chief Product Officer Sandro De Moraes. The person with knowledge of the company said Trump Media asked the employees to sign an agreement pledging not to make public claims of wrongdoing against the company in exchange for severance.

On Thursday afternoon, Northwall posted on Truth Social announcing he had “decided to resign from my role at Trump Media,” adding that he was “incredibly grateful” to Trump and Nunes “for this opportunity.”

“As I step back, I look forward to focusing more on my family and returning to my entrepreneurial journey,” the statement said.

De Moraes now identifies himself on his Truth Social bio as the “Former Chief Product Officer” of the company.

Some word of the departures became public earlier this week when former Trump Media employee Alex Gleason said in a social media post that “Truth Social in shambles. Many more people fired.”

Trump personally owns nearly 60% of the company. That stake, even after a recent decline in the company’s stock price, is worth nearly $2 billion on paper, a significant chunk of Trump’s fortune. He said last month he was not planning to sell his shares. What role Trump plays, if any, in the day-to-day operations of the company is not clear.

Since it launched in 2021, the company has become a speculation-fueled meme stock, but its actual business has generated virtually no revenue and Truth Social has not emerged as a serious competitor to the major social media platforms.

Among Nunes’ moves as CEO, as ProPublica has reported, was inking a large streaming TV deal with several obscure firms, including one controlled by a major political donor. He also traveled to the Balkans over the summer and met with the prime minister of North Macedonia, a trip whose purpose was never publicly explained by the company.

Trump Media has a formal whistleblower policy, adopted when the company went public in March, that encourages employees to report illegal activity and other “business conduct that damages the Company’s good name” and business interests.

Do you have any information about Trump Media that we should know? Robert Faturechi can be reached by email at robert.faturechi@propublica.org and by Signal or WhatsApp at 213-271-7217. Justin Elliott can be reached by email at justin@propublica.org or by Signal or WhatsApp at 774-826-6240.

How executives and well-connected investors make exquisitely timed trades in health care stocks

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox

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Series: The Secret IRS Files

Inside the Tax Records of the .001%

The case was a bold step for the Securities and Exchange Commission.

In 2021, the agency accused Matthew Panuwat of insider trading. Five years earlier, he had learned that his own company, a biopharma operation called Medivation, was about to get acquired. But instead of buying shares in his employer, he bought options in a competitor whose stock could be expected to rise on the news. The agency says he made $107,000 in illicit profits.

For the first and so far only time, the SEC filed a case that accuses an executive of using secret information from his own company to trade in the stock of a rival. “Biopharmaceutical industry insiders frequently have access to material nonpublic information” that impacts both their company and “other companies in the industry,” Gurbir Grewal, the commission’s director of enforcement, warned in announcing the case. “The SEC is committed to detecting and pursuing illegal trading in all forms.”

One of the cornerstones of the agency’s case against Panuwat is that Medivation had a policy that explicitly barred employees from buying or selling competitors’ stock based on company information not available to ordinary investors.

It wasn’t just Panuwat who risked violating Medivation’s policy, a trove of confidential IRS data obtained in recent years by ProPublica shows.

It was also his then-boss, CEO David Hung.

The records show Hung traded frequently in the stock and options of pharmaceutical companies, betting tens of millions of dollars on the rise or fall of shares of dozens of such firms, some of which were direct competitors with his company. Several of his trades came just before news about a rival that he could have learned about in his position as CEO. In one case, he traded ahead of news he personally announced.

The size of Hung’s trades dwarfs those that got his subordinate, who has denied any wrongdoing, in the crosshairs of the SEC.

Hung’s spokesperson acknowledged the CEO has learned nonpublic information about competitors, but denied that information ever informed any of his dozens of trades.

Earlier this year, ProPublica revealed that some executives with access to nonpublic industry informationhad made remarkably well-timed transactions in the securities of their direct competitors and partner companies. Securities law experts said many of the trades, which in some instances rapidly delivered millions of dollars in profit, warranted examination by regulators. The transactions ranged across sectors: from energy to toys, paper products to mortgage servicers.

But one industry stood out for both its frequency and variety of questionable trades: biotech and other relatively small health care enterprises such as medical device makers and drug companies. Dozens of wealthy executives and well-connected investors reported superbly timed stock trades in such companies, including in businesses they competed with or had personal ties to.

ProPublica has analyzed millions of transactions documented in the tax records of the wealthiest taxpayers, including many of the nation’s top business leaders. A high proportion of these trades involved plain vanilla investments, with long-term holdings of blue chip stocks and the like. But a minority of the transactions displayed what experts say are hallmarks of potentially suspicious trading.

Finding well-timed trades was only a starting point for ProPublica’s analysis. We then scrutinized transactions that occurred just before market-moving news, particularly those that represented a departure from an investor’s previous investing pattern, because they either had hardly if ever traded a particular company's stock, were trading an unusually high dollar amount or were making use of risky options for the first time. We examined whether those people had any possible nonpublic means of obtaining information about the companies whose stock rose or fell at an opportune moment. We provided anonymized descriptions of these trades to academics, former prosecutors and former SEC officials, and focused on those they said should have garnered the attention of regulators.

Among the notable examples:

The chairman of a biotech company bought shares in a corporate partner just as the partner was reaching the final stages of secret negotiations to be purchased.

The chairman of a bone health company made aggressive bets on a medical technology firm run by an adviser to his board just before its sales took off, netting him $29 million in a series of options trades.

A wealthy investor with ties to a niche area of cancer research personally traded, for the first time ever, in a company in that sector just before it was taken over. He bought high-risk options that earned him a quick $1 million in profit.

An information edge can be lucrative in any industry, but especially so in the health care sector. Many of its companies are built around only one or a handful of products, making their shares particularly volatile and ripe for profit by investors with inside knowledge. Biotechs and other up-and-comers face clear make-or-break moments: Clinical trials, signals from regulators or takeover rumors can cause wild swings in share prices.

Since beginning to report on our massive trove of IRS records in 2021, ProPublica has analyzed the data and used it as the basis for a series of articles, The Secret IRS Files, that reveal the many ways in which the tax code favors the rich and how the ultrawealthy exploit those advantages.

The IRS data also included millions of records of wealthy taxpayers’ stock and options trades, provided by the brokerages that handled the trades. While the SEC routinely reviews stock trading data from brokers and exchanges, the agency does not have access to IRS data, which in many ways is more comprehensive. (A spokesperson for the SEC declined to comment for this article.)

The securities experts said there is no fixed definition of what makes a trade suspicious and worthy of further investigation. A propitious trade for a relatively small amount, for example, might still warrant scrutiny if the investor has a tie to the company. One excellently timed trade is less noteworthy if the investor frequently trades in that security. A trade with a modest return could still be problematic if it came before news the investor knew about in advance or set in motion. And even if a trader’s investment strategy in a stock wasn’t ultimately successful, a single lucrative trade could still be deemed illegal.

The experts interviewed by ProPublica about the trading patterns examined in this story said that while each should trigger closer scrutiny from regulators, the question of whether they would lead to any action would depend on a host of additional factors. They noted that stock trades are generally deemed to violate insider trading laws only when multiple elements are met. The trader must have had information, not yet publicly known, that would affect the company’s share price. And the trader, or the person who provided the tip, must have had a duty not to disclose the information or use it for personal benefit.

ProPublica’s records give no indication as to why investors made particular trades or what information they possessed. The wealthy investors named in this story either denied their trades were improper or did not comment.

The personal trading policy for Medivation, the multibillion-dollar company Hung ran, was particularly explicit. It warned its employees to be careful trading the shares of competitors because Medivation’s employees possess nonpublic information that can affect those companies’ stock prices as well. “For anyone to use such information to gain personal benefit,” the policy stated, “is illegal.”

But ProPublica’s data show Hung, who has led a number of biopharma companies and has been described in the press as a master dealmaker, risked violating the company’s policy by trading in the securities of competitors. During the decade-plus in which Hung led Medivation, most of his proceeds from securities transactions in companies other than his own involved the pharma sector.

With timely trading, he sometimes scored gains of hundreds of thousands of dollars or managed to avoid a calamitous loss. (The records show that he sometimes lost money as well.)

Securities experts with whom we described his trading patterns and high-ranking role (but not his name) said the investments appeared to show a top executive capitalizing on information not available to the average investor.

In July and August 2011, Hung’s tax records show, he sold more than a million dollars’ worth of stock in a company called Dendreon. Dendreon was then producing a promising prostate cancer therapy that Hung’s firm was competing against, working to get their own drug to market. The day after Hung sold the last of his two roughly half-million-dollar tranches of Dendreon stock in August, the company’s share price fell 67% because of poor sales and a lack of initial enthusiasm from doctors about its prostate cancer drug.

Industry experts said that when a pharmaceutical is in late-stage development, as Medivation’s drug was at the time, the company will normally have its representatives examine the competitive landscape, including surveying doctors’ offices about rival drugs. And business-side employees of companies, even competitors, frequently mingle and trade gossip at conferences.

A few months later, in October 2011, Hung again bought shares of Dendreon, but quickly made a U-turn days after, selling those shares off for about $150,000, essentially the same price he had bought them for. A week later, Hung announced that his company had learned that trials had gone so well for its own prostate cancer therapy that the drug was going to start being offered even to participants who had been given a placebo. “These results are both an important step toward making this life-extending potential treatment available to the prostate cancer community and a significant milestone for our company,” Hung said in a press release at the time.

Just as Hung announced his company’s promising results, Dendreon released lackluster quarterly earnings. Its stock fell 37%.

David Nierengarten, an analyst who covered both companies at the time, told ProPublica the earnings report caused most of the fall, but part of it could also be attributed to Medivation’s clinical trial results, which posed a threat to Dendreon’s market share. Hung’s spokesperson said that Hung did not know the outcome of his company’s clinical trials when he sold Dendreon’s shares.

Hung sold Dendreon shares on almost two dozen occasions over six years, with most of the trades for less than $150,000. Hung’s spokesperson denied he had any relevant nonpublic information when he made his Dendreon trades.

In one instance, tax records show Hung traded a competitor’s stock ahead of news he himself disclosed that experts said would likely qualify as material.

On Aug. 24, 2015, Hung announced that Medivation was acquiring a cancer-fighting medication from a company called BioMarin. The drug was one of a handful of cutting-edge new drugs that Hung hailed as an “exciting class of oncology therapeutics.”

What Hung didn’t say was that on the same day his company finalized the acquisition — but three days before the public announcement — he made a purchase in his personal stock trading account. He bought about $8 million in shares of Clovis Oncology, a company that was separately developing a drug in the same treatment category, known as “PARP inhibitors.”

After the acquisition, the pharmaceutical trade press noted that there was growing interest in this class of drugs. Hung’s deal marked the first big acquisition of a PARP inhibitor.

“Obviously all the PARPs are going to pop,” said Nierengarten, the analyst who covered Hung’s company. Clovis is a small company reliant on a small number of drugs, “so it’s really going to pop,” he said.

And it did. In the week after the Medivation agreement was announced, Hung’s stock purchase paid off: The price of Clovis shares increased by about 11%, a rise experts attributed partly to Hung’s drug acquisition.

By the time Hung sold the shares the next month, he netted $1.25 million in profit.

Hung’s spokesperson defended the trades, saying Hung did not believe Medivation’s acquisition of BioMarin’s drug would affect the share price of a company that made a drug in the same class.He also said most of the stock’s rise came in the days after the news of the acquisition, not the day of, which he said indicated Hung’s profit was attributable to other factors.

The Clovis shares that Hung bought represented the final step in what records show was a series of complex transactions involving what are known as stock options — arrangements to buy or sell a security at some future date. In April 2015, Hung started selling Clovis “put options.” That meant he was entering into a contract that gave another investor the right to sell Clovis shares to him in the near future at a specified price. It was essentially a bet by Hung that Clovis shares would remain at roughly the same price or rise (a sophisticated and unusual transaction for a typical retail investor).

In April and May, Hung sold a small number of his contracts. In June and July, he began selling more frequently and in larger quantities: 17 times as many contracts as he had sold in the previous two months. According to his spokesperson, this was around the time Hung was approached to buy BioMarin’s drug.

The expiration dates for the options were staggered. A large group of his contracts expired on the same day he finalized the drug acquisition.

At that moment, Hung had two choices, both seemingly unpleasant. According to his spokesperson, he likely could have paid cash to end the contracts, which would have resulted in an immediate loss since the options were for a higher stock price than Clovis was trading at on that day. The contracts also allowed him to buy the specified number of shares, a seemingly bad deal since he would pay anywhere from $75 to $85 per share for stock that was trading at less than $73.

But on that day, Hung knew something the market didn’t: that his company was about to announce it was buying Biomarin’s drug.

Hung bought about $8 million worth of Clovis shares. After his company’s announcement, Hung was in the black in a matter of days, even after he bought at the inflated price. The option trades had worked out beautifully. He sold the shares the next month, turning that $1.25 million profit.

Hung’s spokesperson pointed out that, taking into account all of the Clovis options he sold that year, Hung actually lost about $100,000. The time horizon for some of the contracts was much longer, with expiration dates into the following year. Hung, he said, held on to some of his contracts and ultimately lost money when the price of Clovis shares declined significantly a few months later. The spokesperson also said that someone trying to capitalize on nonpublic information could do so more efficiently by buying shares in a company rather than through a complicated series of options trades.

ProPublica described Hung’s options dealing in Clovis, without revealing his identity, to Dan Taylor, a professor at the Wharton School and a leading insider-trading expert. “The trades in question seem at best highly unethical and at worst they may be illegal,” Taylor said. “I would caution any and all executives from engaging in the behavior described here. There's significant legal jeopardy if that behavior was brought to the attention of regulators.”

Harry Sloan did not make his name in the health care industry. He came to prominence in Hollywood.

But in 2017 Sloan made a sizable bet on Juno Therapeutics, a Seattle-based biopharma company focused on cancer treatments.

Sloan had never personally invested in Juno before. There’s also no sign in his tax records, which span the years 1999 to 2019, that he purchased options to invest in other companies.

But on Dec. 14 and 15, 2017, he did both for the first time in ProPublica’s tax data. He bought more than a quarter-million dollars of Juno call options, a contract giving him the right to buy the stock at a specific price. The options were “out of the money,” meaning the price was well over what the stock was trading at at the time. The bet would pay off only if Juno stock jumped significantly.

Options, especially out-of-the-money options like the ones Sloan bought, are risky but can carry huge rewards. You can win big if the stock price rises above the purchase price set by the contract. If Amazon stock sells for $125 a share, an option to buy a share at $130 is worthless at the expiration date unless the market price jumps above $130. If Amazon stays at $125, you’ve spent money for nothing. But if it soars to $175 a share, you stand to make a lot from a small investment.

Sloan’s timing proved prescient. The public didn’t know it yet, but December 2017 was a hugely significant moment in Juno’s history. The company had been privately negotiating to sell itself to Celgene, a leader in the field of cancer treatments. On the same days that Sloan bought his options, Celgene significantly raised its offer and Juno agreed to be taken over.

When The Wall Street Journal broke the news of the imminent acquisition a month later, Juno’s share price skyrocketed from $46 a share to $69, its largest one-day increase ever, and Sloan quickly cashed in. He sold much of his first tranche of options for $677,000. In two decades of records, it was the largest sale he’d made in a security of a company where he hadn’t been an insider.

In all, he claimed more than $1.1 million in profit from his Juno trades, a 450% return on the cost of his options.

Of the 251 trading days in 2017, there were only a dozen other days where Sloan could have purchased options and seen the stock’s price increase as much as it ultimately did over the short period he held the bulk of his position.

Through a spokesperson, Sloan, who has been a prominent fundraiser for presidential candidates on both sides of the aisle, declined to answer questions from ProPublica, instead providing a brief statement: “Any insinuation of unethical or improper activity here is false, and contrary to the reputation Mr. Sloan has developed over the course of his lifetime.”

ProPublica provided an anonymized description of Sloan’s trades to a former SEC commissioner, two former SEC attorneys and two leading insider trading academics. All five said this sort of fact pattern could draw scrutiny from regulators because of how well-timed the trades were, and how anomalous compared to Sloan’s trades before and after.

"If you see out-of-the-money call options, no prior history of trading in that name, excellent timing and a large profit, generally yes, I would expect that to draw attention from regulators," former SEC Commissioner Allison Herren Lee said.

A remarkably timed trade may be even more suspicious, she said, if a trader had some sort of personal tie to the niche industry the company is in.

Though much of his career was in Hollywood — Sloan had been an entertainment lawyer and eventually became CEO of Metro-Goldwyn-Mayer — he is not without his connections to biotech and the subsector Juno was in. Sloan knew Arie Belldegrun, one of the leaders in the field of “CAR T-cell” therapy, a novel cancer treatment in which human cells are modified to attack cancer cells. It is the same niche that Juno specialized in. Sloan and Belldegrun were both active in art philanthropy, backing the same Los Angeles art museum at least as far back as 2013; Belldegrun’s wife co-hosted a VIP screening in 2011 for a movie produced by Sloan’s wife. And Sloan donated $3.2 million to Belldegrun’s lab at UCLA in 2017.

Belldegrun was previously CEO of Kite Pharma, a Juno competitor, before selling his company just months before Juno was acquired. Around the time that Sloan was investing in Juno call options, Belldegrun was starting a new CAR-T company. (Four years later, in 2021, Sloan helped take public a biological engineering firm called Ginkgo Bioworks. One of his partners in that venture was Belldegrun.)

There is no evidence that Sloan and Belldegrun ever discussed Juno. Belldegrun did not respond to repeated requests for comment.

Robert Stiller made his fortune off smoking paraphernalia and coffee. He helped launch E-Z Wider, rolling papers used for joints and cigarettes, before founding Green Mountain Coffee Roasters, the multibillion-dollar company that helped popularize K-Cup coffee pods. That role propelled him to business celebrity, as Forbes declared him “entrepreneur of the year” in 2001.

After Stiller left Green Mountain, he served as chairman of the board of AgNovos, a bone health startup. There, the board Stiller led hired a special adviser: Stephen MacMillan, an experienced medical technologies executive. By the end of 2013, MacMillan was named CEO of Hologic, another medical technology company, but he stayed on at AgNovos as a special adviser to Stiller.

Within a few months, Stiller began investing in Hologic for the first time — and aggressively.

On 33 days between March 2014 and January 2015, he bought a total of $9.8 million in call options in MacMillan’s company. Each was a win, netting him a combined $29 million in profit, almost a 300% return. Stiller’s tax records show no indication that he purchased options in companies other than Hologic and Green Mountain from 1999 to 2019.

The rise in Hologic’s share price was driven largely by revenue growth from its innovative line of mammogram devices, which are more effective than standard breast scans because they provide a three-dimensional view that helps reveal smaller tumors before they’ve grown. The company began reporting particularly strong growth from that product line in late April 2014, after Stiller’s first purchases. The excitement around the product grew from there, as the line continued to beat Wall Street’s revenue expectations and more studies affirmed its effectiveness. The company would have noticed orders picking up months before revenue numbers were announced, according to an industry expert who asked not to be named to avoid antagonizing industry contacts.

Stiller began buying call options in early March.

Reached by phone, Stiller said he invested in Hologic because he had confidence in MacMillan, but said MacMillan never shared detailed information about the company’s inner workings with him. “I would ask him, ‘How are things going?’ and he’d say, ‘Good,’” Stiller said. (MacMillan did not respond to requests for comment.)

Stiller said he thought he had purchased options in other companies during that period as well, but couldn’t name examples. He said he might have also bought shares of Hologic in addition to options, though he didn’t know when.

He acknowledged that buying call options in a company run by someone he knew, before it announced good news, “might not look good” and said that in retrospect he might have refrained. “I always have acted under the highest ethical shit, and I understand insider trading, and I would never do it, and I would never ask anybody else to do it,” Stiller said. “It’s just not in my DNA.”

Even by Stiller’s account of his discussions with MacMillan, his trades risked running afoul of the law. ProPublica described Stiller’s trades, without identifying him, to Chip Loewenson, a longtime white-collar defense attorney who has handled insider trading cases.

“What you described sounds like it could be insider trading,” Loewenson said. “Even if you take his word for it, that all he asked is how it’s going, and he says it’s going well, that could be material nonpublic information.” As Loewenson described it, a one-word answer about how a company is faring could be polite chitchat — or it could carry meaning. “Is that something a reasonable investor would want to know? If you think you're getting an honest answer, yes.”

In 2018, Jim Mullen, a veteran biopharma executive who previously was CEO of biotech powerhouse Biogen and chairman of the Biotechnology Innovation Organization, became chairman of the board of Editas Medicine, a firm based in Cambridge, Massachusetts, that uses gene editing techniques to treat rare diseases. (Mullen stepped down earlier this month after his term ended.) The publicly traded company collaborates with Celgene to use its technology to develop cancer therapies.

Mullen’s tax records show he had unsuccessfully traded in and out of Celgene before in relatively small amounts, but on Dec. 18, 2018, he made his biggest purchase ever of the company’s shares: $73,000 worth, almost as much as all his other past purchases combined.

His timing was excellent.

Celgene was at the time in secret negotiations to be acquired by pharma giant Bristol Myers Squibb. The day before Mullen bought the shares, Celgene had expanded the circle of people who knew about the takeover talks. According to subsequent SEC filings, Celgene informed an unidentified pharma company about the potential acquisition in hopes of soliciting a higher competing bid. The action also raised the risk that the secret talks might leak. (The company that was approached, which would have had to be orders of magnitude bigger than Editas to consider buying Celgene, declined to make a competing offer.)

The next day — the same day Mullen bought shares in Celgene — Celgene’s executive committee decided to move forward with Bristol Myers.

Two weeks after Mullen’s purchase, the deal was announced, sending Celgene’s shares soaring, and ultimately earning Mullen $46,000 in profit and a return of more than 60%.

Mullen and Editas did not respond to requests for comment.

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GOP senator cited COVID when he dumped shares ahead of stock market crash: FBI records

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

After Sen. Richard Burr, R-N.C., told his broker to sell off more than a million dollars in stock a week before the 2020 coronavirus market crash, he called his brother-in-law, Gerald Fauth. Immediately after, Fauth called his wealth manager to sell off almost $160,000 in stock.

Fauth sounded “hurried,” according to a witness cited by the FBI in newly released documents. In explaining why he wanted to dump the stock, Fauth suggested he had special knowledge.

I know a senator, he said.

That appears to contradict what Burr’s lawyer told ProPublica, when we broke the news that the senator and his brother-in-law sold stock on the same day. In that story, the lawmaker’s attorney denied Burr and Fauth had coordinated.

That detail and others were revealed this week, after a judge ordered the Justice Department to further unredact documents related to its insider trading investigation into Burr. Federal prosecutors closed that investigation without filing charges last year, but as of earlier this year, a civil investigation by the Securities and Exchange Commission remained ongoing.

Burr and Fauth could not immediately be reached for comment about the latest document release. In the past, Burr has denied trading on material nonpublic information, and Fauth has repeatedly hung up on ProPublica when asked about his trades.

Here’s a rundown of what’s new from the filing:

A Previous Transaction

Before Burr’s big stock dump on Feb. 13, 2020, the senator engaged in another transaction that suggested he anticipated investor concerns.

The day before his big stock sell-off, Burr purchased $1,189,000 in the Federated U.S. Treasury Cash Reserves Fund, about three-quarters of all the money he and his wife had in their joint account. That purchase had not been previously reported. “Investors often purchase U.S. Treasury funds to hedge against a potential market downturn,” an FBI agent noted.

Why Did Burr Trade?

When the scandal first broke, Burr denied his trades were motivated by inside information he learned as a member of the health and intelligence committees, but rather by news reports from CNBC.

Though this section remains lightly redacted, the FBI appears to have interviewed someone involved in executing Burr’s stock sell-off. That person did not recall Burr mentioning CNBC.

The person said Burr cited the coronavirus, saying it could affect the stock market and cause problems with the supply chain, since American companies rely on Chinese suppliers. (Burr also apparently mentioned that the surge in support for Sen. Bernie Sanders as the Democratic presidential nominee was a risk to the market.)

Did Burr Have a Source?

The FBI’s application for a warrant to search Burr’s phone remains heavily redacted in places, but it cites extensive texts and phone calls with someone about the impending coronavirus crisis.

“In total, between January 31, 2020, and April 7, 2020, (redacted) and Senator Burr exchanged approximately 32 text messages, nearly all of which concerned, in one way or another, the COVID-19 pandemic,” an FBI agent wrote.

That person’s identity remains unknown.

But the exchanges Burr had with this person are part of the reason the FBI was alleging there was probable cause to believe “Burr used material, non-public information regarding the impact that COVID-19 would have on the economy, and that he gained that information by virtue of his position as a Member of Congress.”

One More Call

The day the scandal first broke, Burr was facing demands that he resign from left and right, including from liberal Rep. Alexandria Ocasio-Cortez and conservative Fox News host Tucker Carlson.

One of his first calls that evening? His brother-in-law.

According to the FBI, at 7:31 p.m. a call was placed from Burr’s cellphone to Fauth’s cellphone.

It lasted four and a half minutes. What was discussed is unclear.

At that point, it wasn’t yet publicly known that Fauth had dumped stock the same day as Burr. ProPublica broke that story two months later.

A week later the FBI asked a judge for a warrant to search Burr’s phone, news of which prompted Burr to step down as chair of the intelligence committee.

Burr’s brother-in-law called stock broker — one minute after getting off phone with senator

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

After Sen. Richard Burr of North Carolina dumped more than $1.6 million in stocks in February 2020 a week before the coronavirus market crash, he called his brother-in-law, according to a new Securities and Exchange Commission filing.

They talked for 50 seconds.

Burr, according to the SEC, had material nonpublic information regarding the incoming economic impact of coronavirus.

The very next minute, Burr's brother-in-law, Gerald Fauth, called his broker.

ProPublica previously reported that Fauth, a member of the National Mediation Board, had dumped stock the same day Burr did. But it was previously unknown that Burr and Fauth spoke that day, and that their contact came just before Fauth began the process of dumping stock himself.

The revelations come as part of an effort by the SEC to force Fauth to comply with a subpoena that the agency said he has stonewalled for more than a year, and which was filed not long after ProPublica's story.

In the filings, the SEC also revealed that there is an ongoing insider trading investigation into both Burr and Fauth's trades.

It had previously been reported that federal prosecutors had decided not to charge Burr.

Burr's spokesperson did not immediately respond to questions. Fauth's lawyer and the SEC did not respond to questions. Fauth hung up on a ProPublica reporter.

According to the SEC, Fauth has cited a medical condition for why he cannot comply with the subpoena, even as he has been healthy enough to continue his duties at the National Mediation Board. In its filings, the SEC accuses Fauth of engaging in “a relentless battle" to dodge the subpoena.

In 2017, President Donald Trump appointed Fauth to the three-person board, a federal agency that facilitates labor-management relations within the nation's railroad and airline industries. President Joe Biden reappointed him to the board.

On the day he received the call from Burr, Fauth sold between $97,000 and $280,000 worth of shares in six companies — including several that were hit particularly hard in the market swoon and economic downturn. According to the SEC, the first broker he called after hearing from Burr was out of the office, so he immediately called another broker to execute the trades.

In its filings, the SEC also alleges, for the first time, that Burr had material nonpublic information about the economic impact of the coming coronavirus crisis, based on his role at the time as chairman of the intelligence committee, as a member of the health committee and through former staffers who were directing key aspects of the government response to the virus.

The week after the trades, the market began its crash, falling by more than 30% in the subsequent month.

Burr came under scrutiny after ProPublica reported that he sold off a significant percentage of his stocks shortly before the market tanked, unloading between $628,000 and $1.72 million of his holdings on Feb. 13 in 33 separate transactions. The precise amount of his stock sales, more than $1.6 million, is also a new detail from this week's SEC filings. In his roles on the intelligence and health committees, Burr had access to the government's most highly classified information about threats to America's security and public health concerns.

Before his sell-off, Burr had assured the public that the federal government was well prepared to handle the virus. In a Feb. 7 op-ed that he co-authored with another senator, he said “the United States today is better prepared than ever before to face emerging public health threats, like the coronavirus."

That month, however, according to a recording obtained by NPR, Burr had given a VIP group at an exclusive social club a much more dire preview of the economic impact of the coronavirus, warning it could curtail business travel, cause schools to be closed and result in the military mobilizing to compensate for overwhelmed hospitals.

Burr defended his actions, saying he relied solely on public information, including CNBC reports, to inform his trades and did not rely on information he obtained as a senator.

Alice Fisher, Burr's attorney, told ProPublica at the time that “Sen. Burr participated in the stock market based on public information and he did not coordinate his decision to trade on Feb. 13 with Mr. Fauth."

New filing shows bombshell records tied to a GOP senator's suspicious stock dumps

This story was first published by ProPublica, a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

After Sen. Richard Burr of North Carolina dumped more than $1.6 million in stocks in February 2020 a week before the coronavirus market crash, he called his brother-in-law, according to a new Securities and Exchange Commission filing.

They talked for 50 seconds.

Burr, according to the SEC, had material nonpublic information regarding the incoming economic impact of coronavirus.

The very next minute, Burr's brother-in-law, Gerald Fauth, called his broker.

ProPublica previously reported that Fauth, a member of the National Mediation Board, had dumped stock the same day Burr did. But it was previously unknown that Burr and Fauth spoke that day, and that their contact came just before Fauth began the process of dumping stock himself.

The revelations come as part of an effort by the SEC to force Fauth to comply with a subpoena that the agency said he has stonewalled for more than a year, and which was filed not long after ProPublica's story.

In the filings, the SEC also revealed that there is an ongoing insider trading investigation into both Burr and Fauth's trades.

It had previously been reported that federal prosecutors had decided not to charge Burr.

Burr's spokesperson did not immediately respond to questions. Fauth's lawyer and the SEC did not respond to questions. Fauth hung up on a ProPublica reporter.

According to the SEC, Fauth has cited a medical condition for why he cannot comply with the subpoena, even as he has been healthy enough to continue his duties at the National Mediation Board. In its filings, the SEC accuses Fauth of engaging in “a relentless battle" to dodge the subpoena.

In 2017, President Donald Trump appointed Fauth to the three-person board, a federal agency that facilitates labor-management relations within the nation's railroad and airline industries. President Joe Biden reappointed him to the board.

On the day he received the call from Burr, Fauth sold between $97,000 and $280,000 worth of shares in six companies — including several that were hit particularly hard in the market swoon and economic downturn. According to the SEC, the first broker he called after hearing from Burr was out of the office, so he immediately called another broker to execute the trades.

In its filings, the SEC also alleges, for the first time, that Burr had material nonpublic information about the economic impact of the coming coronavirus crisis, based on his role at the time as chairman of the intelligence committee, as a member of the health committee and through former staffers who were directing key aspects of the government response to the virus.

The week after the trades, the market began its crash, falling by more than 30% in the subsequent month.

Burr came under scrutiny after ProPublica reported that he sold off a significant percentage of his stocks shortly before the market tanked, unloading between $628,000 and $1.72 million of his holdings on Feb. 13 in 33 separate transactions. The precise amount of his stock sales, more than $1.6 million, is also a new detail from this week's SEC filings. In his roles on the intelligence and health committees, Burr had access to the government's most highly classified information about threats to America's security and public health concerns.

Before his sell-off, Burr had assured the public that the federal government was well prepared to handle the virus. In a Feb. 7 op-ed that he co-authored with another senator, he said “the United States today is better prepared than ever before to face emerging public health threats, like the coronavirus."

That month, however, according to a recording obtained by NPR, Burr had given a VIP group at an exclusive social club a much more dire preview of the economic impact of the coronavirus, warning it could curtail business travel, cause schools to be closed and result in the military mobilizing to compensate for overwhelmed hospitals.

Burr defended his actions, saying he relied solely on public information, including CNBC reports, to inform his trades and did not rely on information he obtained as a senator.

Alice Fisher, Burr's attorney, told ProPublica at the time that “Sen. Burr participated in the stock market based on public information and he did not coordinate his decision to trade on Feb. 13 with Mr. Fauth."

How Trump's tax law opened a loophole that let executives cash in big time

This story was first published by ProPublica, a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

In the months after President Donald Trump signed the Tax Cuts and Jobs Act in December 2017, some tax professionals grew giddy as they discovered opportunities for their clients inside a law that already slashed rates for corporations and wealthy individuals.

At a May 2018 conference of financial advisers, one wealth planner told the room that a key provision of the new law “leaves a gaping hole in the tax code." As he put it, “The goal by the end of the presentation today is to make you guys the bus drivers, or the truck drivers, to drive right through that hole with your clients."

Among the tax-saving opportunities offered by the law: Taxes on profits from certain types of businesses were cut dramatically, while the rate on salaries those businesses paid was reduced only slightly.

That created an alluring opportunity. People who were both owners and employees of a company could make the same amount of money but change how they label it, by lowering their salaries and in turn increasing the company's profits, which they shared in. That would reduce their tax bill by moving money from a high-tax category to a lower one: Wages are taxed at a top rate of 37% plus an additional 3.8% Medicare levy, while profits, under the new law, are taxed at a top rate of 29.6% (with no Medicare tax). Proponents of this provision claimed it would foster increased investment in American businesses (economists say it's too early to determine whether that's true). But even before the bill passed, prominent tax academics warned, in an article titled “The Games They Will Play," that the tax break would be abused.

Their fears appear to have materialized. Secret IRS data shows multiple instances in which salaries for top executives and owners suddenly and inexplicably dropped in the first year after the Trump tax cut, reducing their tax bills even as their companies appeared to thrive. The mysterious pay cuts played out across industries, from logistics companies to real estate firms to makers of bathtubs, and among executives of varying degrees of prominence. The salary for one construction firm executive dropped from more than $4 million in 2017 to $105,000 in 2018.

The wages for car accessory manufacturer David MacNeil, whose WeatherTech floor mats are featured in a Super Bowl ad each year, fell from $68 million in 2017 to $47 million in 2018.

The salary of Jeffrey Records, CEO of Oklahoma City-based MidFirst Bank, plummeted from $8.6 million to $1.8 million.

And the wages of Dick Uihlein, the Republican megadonor and chairman of shipping supplies behemoth Uline, sank from $5.1 million to $2.1 million.

It's impossible to say how much money was reclassified as a result of the new law, but consider this: The loophole already existed, in much smaller form, before the Trump tax overhaul. A government report in 2009 estimated the U.S. Treasury was losing billions to this strategy. Back then, an owner could save the Medicare tax by counting a dollar as profits rather than salary. But after the Trump law, the tax savings roughly tripled, to about 11%.

The revelations about the wage maneuvers come from a trove of IRS records obtained by ProPublica covering thousands of the wealthiest Americans. Previous articles in “The Secret IRS Files" series have detailed how the wealthy avoid paying taxes legally, including a story last week exploring the massive benefits the Trump tax overhaul provided billionaires.

The sudden shifts in compensation revealed in the tax returns of wealthy business owners show how they may be gaming federal law to further slash their taxes. They also highlight how, unlike most Americans, whose taxes are automatically taken out of each paycheck, wealthy business owners have a menu of avoidance techniques afforded to them by the tax code.

The tax benefits of shifting wages to profits can be significant. MacNeil, for example, saved an estimated $8 million in the first two years, according to a ProPublica analysis of the IRS records.

MacNeil defended his wage drop and said he used the tax savings to create more jobs: “You want me investing in my country — my fellow Americans? Get out of my pocket."

ProPublica analyzed years of wage and profit data and found that for each of the companies named in this story, company profits rose even as wages were cut.

Unlike publicly traded corporations, private companies are not required to publicly report profits, salaries for top executives or their rationales for compensation decisions. But experts who spoke to ProPublica said that, if audited, these executives would have to justify why the value of their labor plunged in a given year. The secret tax data does not answer that question.

Taking an unreasonably low salary in order to avoid taxes is illegal. But the IRS' definition of “reasonable" is vague, and the vast majority of business owners will likely never have to justify the salary cuts. Only a tiny fraction of such companies have their salaries examined by the IRS. Karen Burke, a tax law professor at the University of Florida, said, “For a business owner, there's every incentive to do this and every reason to believe you'll get away with it."

David MacNeil enjoys being the boss. A table reserved for him at the cafeteria of his sprawling production plant has a placard that warns: “Don't even think about sitting here." He compliments one of his 1,700 employees about the company pickup truck he's driving, then adds, “It's mine." As he walks among the whirring machines pumping out his custom car mats, he revels in the fact that he built a flourishing manufacturing empire without offshoring, creating hundreds of jobs.

“This is why they give us a tax break," he said, “so we can make shit happen."

After ProPublica contacted him, MacNeil invited two reporters for a daylong tour of his factory complex in Bolingbrook, Illinois. A former car salesman, he founded WeatherTech, a top U.S. manufacturer of car accessories, in 1989 and now regularly generates $100 million in annual profit. MacNeil owns a super-yacht, a private jet, a Florida equestrian estate and a collection of antique cars.

He describes himself as “the kind of man America needs, a man that believes in the great American worker." As he led the tour of his plant, he took his phone out to read emails from employees praising his generosity and showed photos of himself removing trash from the ocean in his free time.

MacNeil backed Trump, donating $1 million to his inauguration and hundreds of thousands to Republican candidates and causes. Trump's tax law would have cut the magnate's taxes no matter what. But the IRS records indicate MacNeil may have taken steps to further boost those savings.

For 16 years, the records show, MacNeil's wages climbed every year: from $1.1 million in 2008 to $10.1 million in 2012 and almost $68 million in 2017. But in 2018, that trend suddenly reversed. He cut his salary to $47 million. Then in 2019, he slashed it even more aggressively, bringing it down to $17 million — 75% lower than two years earlier.

MacNeil's CEO title hadn't changed. He hadn't stepped back. “I bust my ass seven days a week," he said.

As MacNeil's salary fell, the company's profits, which are taxed at a lower rate, surged. In 2018, after four years in which profits hovered around $100 million a year, they suddenly jumped to $121 million. The $21 million increase mirrored the amount that MacNeil lowered his wages that year.

With his (higher-taxed) wages dropping and his (lower-taxed) profits rising, MacNeil avoided an estimated $8 million in taxes.

MacNeil first said he was unaware that his wages had been cut 75% until ProPublica asked him about it. “I had no idea," he said, asserting the decision was made by his accountants. Later, MacNeil told ProPublica that his wage decrease stemmed from his decision to begin reinvesting almost all of his profits back into the company, leaving him less cash to pay himself in wages.

Experts told ProPublica that increased capital investments by an owner could help justify lower wages, if they result in the owner having less cash left over.

Still, the tax data shows MacNeil's profits soaring during the years his wages dropped. The data does not indicate how much money MacNeil put back into the business. Asked to provide specific figures outlining his annual cash flow and reinvestment, MacNeil declined.

MacNeil also cited the vagueness of the IRS' definition of “reasonable compensation." Most important, he said, the estimated $8 million in taxes he avoided by dropping his wages allowed him to buy an $8 million machine that would generate many multiples of that in tax revenue in the years to come, because it would make his business more profitable.

In a series of text messages in the days that followed, MacNeil continued to defend himself, telling a ProPublica reporter that he didn't understand “the real world" and “it's time to grow up and get a real job."

“Break it up anyway you want, you saw there was a half billion dollars in investment with your own eyes," he wrote. “We've paid hundreds and hundreds of millions of dollars in taxes since 2012. How much have you paid? Chump change for sure. Enjoy!"

MacNeil's company, like all of the ones discussed in this article, is organized as a pass-through, a tax structure that is quite common but not popularly understood.

To understand pass-throughs, it's first useful to know how their corporate cousin, the C corporation, is taxed. Most large publicly traded companies, the ExxonMobils and Nikes of the world, are C corporations. When these companies end the year, they must pay the IRS corporate income tax on any profits they have earned. Shareholders receive money, and then owe taxes, only if they decide to sell their holding at a gain or if the companies issue a dividend.

Most businesses in the U.S. are not C corporations, but pass-throughs. They include everything from a small corner deli to a hedge fund to a multinational construction company. Most are privately held. When one of these businesses makes a profit, they do not pay the corporate tax. Instead, that money “passes through" directly to the owner and is reflected on the owners' personal tax returns. It is therefore taxed only once, and individual income tax rates apply.

One popular type of pass-through is called an S corporation, named after the section in the tax code. They were created in the Eisenhower era as an option for small businesses who wanted to face only a single layer of tax. Since then, many large companies have structured themselves as S corporations for the tax benefits they can bring.

The IRS requires that S corporations pay reasonable salaries — they “should not attempt to avoid paying employment taxes by having their officers treat their compensation as cash distributions" — but the agency has been vague about what those words mean. Factors cited for what makes a salary reasonable include the individual's training and experience, job responsibilities and what comparable businesses pay for similar roles.

To offer more clarity, the IRS has publicly cited court cases it fought against business owners. In one, from 2001, a Pennsylvania veterinarian took all of his compensation as business income, paying himself no wages even though he spent more than 30 hours a week doing surgeries and other tasks. The veterinarian lost and was forced to pay back taxes.

In another case, an Iowa accountant was paid a salary of $24,000 a year, while taking profits of about $200,000. The accountant, David Watson, specialized in advising clients on tax issues involving pass-through companies. The court ruled against Watson, forcing him to pay back taxes and penalties, after it found that the market rate for his services at the time would have been over $90,000.

The issue has at times become a more public flashpoint. Former Democratic presidential nominee John Edwards was criticized for taking a small salary from the law practice he owned, and former Republican House Speaker Newt Gingrich took heat for doing the same from companies he created that profit from his speeches and other appearances. More recently, The Wall Street Journal reported that Joe Biden exploited the tactic in the years before he became president with his book and speech income. Gingrich, Edwards and Biden have all defended their handling of their tax affairs.

A 2009 report from the Government Accountability Office estimated that in 2003 and 2004, about 13% of S corporations paid artificially low wages, resulting in about $3 billion in lost tax revenue. IRS officials complained to investigators that making the case that a salary is artificially low can be difficult and time consuming. From 2006 to 2008, the IRS examined only 0.5% of S corporations, and in less than a fourth of those cases was compensation looked at. By 2019, the audit rate for S corporations had fallen even lower, to 0.2%.

As the Trump tax cut was being hammered out, lobbyists for industry groups and specific companies pushed to make sure they were eligible. Engineering, real estate and manufacturing were granted the deduction. Lawyers and companies performing “financial services," for example, were not.

Despite that, banks lobbied successfully to be eligible for the deduction. One of the banks that pushed for that eligibility was MidFirst. That year, even as the CEO's salary dropped from $8.6 million to $1.8 million, his share of the profits jumped more than $16 million. In 2019, Records' salary rebounded to $6.5 million, but it remained lower than it had been in the year before the Trump tax law.

Representatives for Records declined to answer questions for this article.

Dick and Liz Uihlein also appear to have benefited. The co-founders of Uline gave millions to support Sen. Ron Johnson, the Wisconsin Republican who became the champion of the pass-through provision in the Trump tax overhaul.

Before the law passed, the salaries for the Uihleins had fluctuated. But in 2018 they dropped dramatically, from a total of $10.5 million to $4.2 million. Their wages had not been that low in more than a decade.

The business reasons for the pay cut are not clear from the available records, and a spokesman for the Uihleins declined to answer questions from ProPublica. Dick remained chairman, and Liz was president. Liz Uihlein said publicly in 2020 that the couple was still heavily involved in running the company.

Their business was booming in the year their wages fell. Profits rose from about $721 million in 2017 to $937 million in 2018, ProPublica's analysis of the company's tax data shows. The company remained North America's leading distributor of shipping and packaging supplies. “Business is great," Uline's Chief Human Resources Officer Gil De Las Alas told the Kenosha News in November 2018. “We just keep growing, growing, growing."

Secret IRS files reveal how much the ultrawealthy gained by shaping Trump's 'big, beautiful tax cut'

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

Series: The Secret IRS Files

Inside the Tax Records of the .001%

In November 2017, with the administration of President Donald Trump rushing to get a massive tax overhaul through Congress, Sen. Ron Johnson stunned his colleagues by announcing he would vote “no."

Making the rounds on cable TV, the Wisconsin Republican became the first GOP senator to declare his opposition, spooking Senate leaders who were pushing to quickly pass the tax bill with their thin majority. “If they can pass it without me, let them," Johnson declared.

Johnson's demand was simple: In exchange for his vote, the bill must sweeten the tax break for a class of companies that are known as pass-throughs, since profits pass through to their owners. Johnson praised such companies as “engines of innovation." Behind the scenes, the senator pressed top Treasury Department officials on the issue, emails and the officials' calendars show.

Within two weeks, Johnson's ultimatum produced results. Trump personally called the senator to beg for his support, and the bill's authors fattened the tax cut for these businesses. Johnson flipped to a “yes" and claimed credit for the change. The bill passed.

The Trump administration championed the pass-through provision as tax relief for “small businesses."

Confidential tax records, however, reveal that Johnson's last-minute maneuver benefited two families more than almost any others in the country — both worth billions and both among the senator's biggest donors.

Dick and Liz Uihlein of packaging giant Uline, along with roofing magnate Diane Hendricks, together had contributed around $20 million to groups backing Johnson's 2016 reelection campaign.

The expanded tax break Johnson muscled through netted them $215 million in deductions in 2018 alone, drastically reducing the income they owed taxes on. At that rate, the cut could deliver more than half a billion in tax savings for Hendricks and the Uihleins over its eight-year life.

But the tax break did more than just give a lucrative, and legal, perk to Johnson's donors. In the first year after Trump signed the legislation, just 82 ultrawealthy households collectively walked away with more than $1 billion in total savings, an analysis of confidential tax records shows. Republican and Democratic tycoons alike saw their tax bills chopped by tens of millions, among them: media magnate and former Democratic presidential candidate Michael Bloomberg; the Bechtel family, owners of the engineering firm that bears their name; and the heirs of the late Houston pipeline billionaire Dan Duncan.

Usually the scale of the riches doled out by opaque tax legislation — and the beneficiaries — remain shielded from the public. But ProPublica has obtained a trove of IRS records covering thousands of the wealthiest Americans. The records have enabled reporters this year to explore the diverse menu of options the tax code affords the ultrawealthy to avoid paying taxes.

The drafting of the Trump law offers a unique opportunity to examine how the billionaire class is able to shape the code to its advantage, building in new ways to sidestep taxes.

The Tax Cuts and Jobs Act was the biggest rewrite of the code in decades and arguably the most consequential legislative achievement of the one-term president. Crafted largely in secret by a handful of Trump administration officials and members of Congress, the bill was rushed through the legislative process.

As draft language of the bill made its way through Congress, lawmakers friendly to billionaires and their lobbyists were able to nip and tuck and stretch the bill to accommodate a variety of special groups. The flurry of midnight deals and last-minute insertions of language resulted in a vast redistribution of wealth into the pockets of a select set of families, siphoning away billions in tax revenue from the nation's coffers. This story is based on lobbying and campaign finance disclosures, Treasury Department emails and calendars obtained through a Freedom of Information Act lawsuit, and confidential tax records.

For those who benefited from the bill's modifications, the collective millions spent on campaign donations and lobbying were minuscule compared with locking in years of enormous tax savings.

A spokesperson for the Uihleins declined to comment. Representatives for Hendricks didn't respond to questions. In response to emailed questions, Johnson did not address whether he had discussed the expanded tax break with Hendricks or the Uihleins. Instead, he wrote in a statement that his advocacy was driven by his belief that the tax code “needs to be simplified and rationalized."

“My support for 'pass-through' entities — that represent over 90% of all businesses — was guided by the necessity to keep them competitive with C-corporations and had nothing to do with any donor or discussions with them," he wrote.

By the summer of 2017, it was clear that Trump's first major legislative initiative, to “repeal and replace" Obamacare, had gone up in flames, taking a marquee campaign promise with it. Looking for a win, the administration turned to tax reform.

“Getting closer and closer on the Tax Cut Bill. Shaping up even better than projected," Trump tweeted. “House and Senate working very hard and smart. End result will be not only important, but SPECIAL!"

At the top of the Republican wishlist was a deep tax cut for corporations. There was little doubt that such a cut would make it into the final legislation. But because of the complexity of the tax code, slashing the corporate tax rate doesn't actually affect most U.S. businesses.

Corporate taxes are paid by what are known in tax lingo as C corporations, which include large publicly traded firms like AT&T or Coca-Cola. Most businesses in the United States aren't C corporations, they're pass-throughs. The name comes from the fact that when one of these businesses makes money, the profits are not subject to corporate taxes. Instead, they “pass through" directly to the owners, who pay taxes on the profits on their personal returns. Unlike major shareholders in companies like Amazon, who can avoid taking income by not selling their stock, owners of successful pass-throughs typically can't avoid it.

Pass-throughs include the full gamut of American business, from small barbershops to law firms to, in the case of Uline, a packaging distributor with thousands of employees.

So alongside the corporate rate cut for the AT&Ts of the world, the Trump tax bill included a separate tax break for pass-through companies. For budgetary reasons, the tax break is not permanent, sunsetting after eight years.

Proponents touted it as boosting “small business" and “Main Street," and it's true that many small businesses got a modest tax break. But a recent study by Treasury economists found that the top 1% of Americans by income have reaped nearly 60% of the billions in tax savings created by the provision. And most of that amount went to the top 0.1%. That's because even though there are many small pass-through businesses, most of the pass-through profits in the country flow to the wealthy owners of a limited group of large companies.

Tax records show that in 2018, Bloomberg, whom Forbes ranks as the 20th wealthiest person in the world, got the largest known deduction from the new provision, slashing his tax bill by nearly $68 million. (When he briefly ran for president in 2020, Bloomberg's tax plan proposed ending the deduction, though his plan was generally friendlier to the wealthy than those of his rivals.) A spokesperson for Bloomberg declined to comment.

Johnson's intervention in November 2017 was designed to boost the bill's already generous tax break for pass-through companies. The bill had allowed for business owners to deduct up to 17.4% of their profits. Thanks to Johnson holding out, that figure was ultimately boosted to 20%.

That might seem like a small increase, but even a few extra percentage points can translate into tens of millions of dollars in extra deductions in one year alone for an ultrawealthy family.

The mechanics are complicated but, for the rich, it generally means that a business owner gets to keep an extra 7 cents on every dollar of profit. To understand the windfall, take the case of the Uihlein family.

Dick, the great-grandson of a beer magnate, and his wife, Liz, own and operate packaging giant Uline. The logo of the Pleasant Prairie, Wisconsin, firm is stamped on the bottom of countless paper bags. Uline produced nearly $1 billion in profits in 2018, according to ProPublica's analysis of tax records. Dick and Liz Uihlein, who own a majority of the company, reported more than $700 million in income that year. But they were able to slash what they owed the IRS with a $118 million deduction generated by the new tax break.

Liz Uihlein, who serves as president of Uline, has criticized high taxes in her company newsletter. The year before the tax overhaul, the couple gave generously to support Trump's 2016 presidential campaign. That same year, when Johnson faced long odds in his reelection bid against former Sen. Russ Feingold, the Uihleins gave more than $8 million to a series of political committees that blanketed the state with pro-Johnson and anti-Feingold ads. That blitz led the Milwaukee Journal Sentinel to dub the Uihleins “the Koch brothers of Wisconsin politics."

Johnson's campaign also got a boost from Hendricks, Wisconsin's richest woman and owner of roofing wholesaler ABC Supply Co. The Beloit-based billionaire has publicly pushed for tax breaks and said she wants to stop the U.S. from becoming “a socialistic ideological nation."

Hendricks has said Johnson won her over after she grilled him at a brunch meeting six years earlier. She gave about $12 million to a pair of political committees, the Reform America Fund and the Freedom Partners Action Fund, that bought ads attacking Feingold.

In the first year of the pass-through tax break, Hendricks got a $97 million deduction on income of $502 million. By reducing the income she owed taxes on, that deduction saved her around $36 million.

Even after Johnson won the expansion of the pass-through break in late 2017, the final text of the tax overhaul wasn't settled. A congressional conference committee had to iron out the differences between the Senate and House versions of the bill.

Sometime during this process, eight words that had been in neither the House nor the Senate bill were inserted: “applied without regard to the words 'engineering, architecture.'"

With that wonky bit of legalese, Congress smiled on the Bechtel clan.

The Bechtels' engineering and construction company is one of the largest and most politically connected private firms in the country. With surgical precision, the new language guaranteed the Bechtels a massive tax cut. In previous versions of the bill, construction would have been given a tax break, but engineering was one of the industries excluded from the pass-through deduction for reasons that remain murky.

When the bill, with its eight added words, took effect in 2018, three great-great-grandchildren of the company's founder, CEO Brendan Bechtel and his siblings Darren and Katherine, together netted deductions of $111 million on $679 million in income, tax records show.

And that's just one generation of Bechtels. The heirs' father, Riley, also holds a piece of the firm, as does a group of nonfamily executives and board members. In all, Bechtel Corporation produced around $2.3 billion of profit in 2018 alone — the vast majority of which appears to be eligible for the 20% deduction.

Who wrote the phrase — and which lawmaker inserted it — has been a much-discussed mystery in the tax policy world. ProPublica found that a lobbyist who worked for both Bechtel and an industry trade group has claimed credit for the alteration.

In the months leading up to the bill's passage in 2017, Bechtel had executed a full-court press in Washington, meeting with Trump administration officials and spending more than $1 million lobbying on tax issues.

Marc Gerson, of the Washington law firm Miller & Chevalier, was paid to lobby on the tax bill by both Bechtel and the American Council of Engineering Companies, of which Bechtel is a member. At a presentation for the trade group's members a few weeks after Trump signed the bill into law, Gerson credited his efforts for the pass-through tax break, calling it a “major legislative victory for the engineering industry." Gerson did not respond to a request for comment.

Bechtel's push was part of a long history of lobbying for tax breaks by the company. Two decades ago, it even hired a former IRS commissioner as part of a successful bid to get “engineering and architectural services" included in one of President George W. Bush's tax cuts.

The company's lobbying on the Trump tax bill, and the tax break it received, highlight a paradox at the core of Bechtel: The family has for years showered money on anti-tax candidates even though, as The New Yorker's Jane Mayer has written, Bechtel “owed almost its entire existence to government patronage." Most famous for being one of the companies that built the Hoover Dam, in recent years it has bid on and won marquee federal projects. Among them: a healthy share of the billions spent by American taxpayers to rebuild Iraq after the war. The firm recently moved its longtime headquarters from San Francisco to Reston, Virginia, a hub for federal contractors just outside the Beltway.

A spokesperson for Bechtel Corporation didn't respond to questions about the company's lobbying. The spokesperson, as well as a representative of the family's investment office, didn't respond to requests to accept questions about the family's tax records.

Brendan Bechtel has emerged this year as a vocal critic of President Joe Biden's proposal to pay for new infrastructure with tax hikes.

“It's unfair to ask business to shoulder or cover all the additional costs of this public infrastructure investment," he said on a recent CNBC appearance.

As the landmark tax overhaul sped through the legislative process, other prosperous groups of business owners worried they would be left out. With the help of lobbyists, and sometimes after direct contact with lawmakers, they, too, were invited into what Trump dubbed his “big, beautiful tax cut."

Among the biggest winners during the final push were real estate developers.

The Senate bill included a formula that restricted the size of the new deduction based on how much a pass-through business paid in wages. Congressional Republicans framed the provision as rewarding businesses that create jobs. In effect, it meant a highly profitable business with few employees — like a real estate developer — wouldn't be able to benefit much from the break.

Developers weren't happy. Several marshaled lobbyists and prodded friendly lawmakers to turn things around.

At least two of them turned to Johnson.

“Dear Ron," Ted Kellner, a Wisconsin developer, and a colleague wrote in a letter to Johnson. “I'm concerned that the goal of a fair, efficient and growth oriented tax overhaul will not be achieved, especially for private real estate pass-through entities."

Johnson forwarded the letter from Kellner, a political donor of his, to top Republicans in the House and Senate: “All, Yesterday, I received this letter from very smart and successful businessmen in Milwaukee," adding that the legislation as it stood gave pass-throughs “widely disparate, grossly unfair" treatment.

House Ways and Means Committee Chairman Kevin Brady, R-Texas, responded with a promise to do more: “Senator — I strongly agree we should continue to improve the pass-through provisions at every step. You are a great champion for this." Congress is not subject to the Freedom of Information Act, but Treasury officials were copied on the email exchange. ProPublica obtained the exchange after suing the Treasury Department.

Kellner got his wish. In the final days of the legislative process, real estate investors were given a side door to access the full deduction. Language was added to the final legislation that allowed them to qualify if they had a large portfolio of buildings, even if they had small payrolls.

With that, some of the richest real estate developers in the country were welcomed into the fold.

The tax records obtained by ProPublica show that one of the top real estate industry winners was Donald Bren, sole owner of the Southern California-based Irvine Company and one of the wealthiest developers in the United States.

In 2018 alone, Bren personally enjoyed a deduction of $22 million because of the tax break. Bren's representatives did not respond to emails and calls from ProPublica.

His company had hired Wes Coulam, a prominent Washington lobbyist with Ernst & Young, to advocate for its interests as the bill was being hammered out. Before Coulam became a lobbyist, he worked on Capitol Hill as a tax policy adviser for Utah Sen. Orrin Hatch.

Hatch, then the Republican chair of the Senate Finance Committee, publicly took credit for the final draft of the new deduction, amid questions about the real estate carveout. Hatch's representatives did not respond to questions from ProPublica about how the carveout was added.

ProPublica's records show that other big real estate winners include Adam Portnoy, head of commercial real estate giant the RMR Group, who got a $14 million deduction in 2018. Donald Sterling, the real estate developer and disgraced former owner of the Los Angeles Clippers, won an $11 million deduction. Representatives for Portnoy and Sterling did not respond to questions from ProPublica.

Another gift to the real estate industry in the bill was a tax deduction of up to 20% on dividends from real estate investment trusts, more commonly known as REITs. These companies are essentially bundles of various real estate assets, which investors can buy chunks of. REITs make money by collecting rent from tenants and interest from loans used to finance real estate deals.

The tax cut for these investment vehicles was pushed by both the Real Estate Roundtable, a trade group for the entire industry, and the National Association of Real Estate Investment Trusts. The latter, a trade group specifically for REITs, spent more than $5 million lobbying in Washington the year the tax bill was drafted, more than it had in any year in its history.

Steven Roth, the founder of Vornado Realty Trust, a prominent REIT, is a regular donor to both groups' political committees.

Roth had close ties to the Trump administration, including advising on infrastructure and doing business with Jared Kushner's family. He became one of the biggest winners from the REIT provision in the Trump tax law.

Roth earned more than $27 million in REIT dividends in the two years after the bill passed, potentially allowing him a tax deduction of about $5 million, tax records show. Roth did not respond to requests for comment, and his representatives did not accept questions from ProPublica on his behalf.

Another carveout benefited investors of publicly traded pipeline businesses. Sen. John Cornyn, a Texas Republican, added an amendment for them to the Senate version of the bill just before it was voted on.

Without his amendment, investors who made under a certain income would have received the deduction anyway, experts told ProPublica. But for higher-income investors, a slate of restrictions kicked in. In order to qualify, they would have needed the businesses they're invested in to pay out significant wages, and these oil and gas businesses, like real estate developers, typically do not.

Cornyn's amendment cleared the way.

The trade group for these companies and one of its top members, Enterprise Products Partners, a Houston-based natural gas and crude oil pipeline company, had both lobbied on the bill. Enterprise was founded by Dan Duncan, who died in 2010.

The Trump tax bill delivered a win to Duncan's heirs. ProPublica's data shows his four children, who own stakes in the company, together claimed more than $150 million in deductions in 2018 alone. The tax provision for “small businesses" had delivered a windfall to the family Forbes ranked as the 11th richest in the country.

In a statement, an Enterprise spokesperson wrote: “The Duncan family abides by all applicable tax laws and will not comment on individual tax returns, which are a private matter." Cornyn's office did not respond to questions about the senator's amendment.

The tax break is due to expire after 2025, and a gulf has opened in Congress about the future of the provision.

In July, Senate Finance Chair Ron Wyden, D-Ore., proposed legislation that would end the tax cut early for the ultrawealthy. In fact, anyone making over $500,000 per year would no longer get the deduction. But it would be extended to the business owners below that threshold who are currently excluded because of their industry. The bill would “make the policy more fair and less complex for middle-class business owners, while also raising billions for priorities like child care, education, and health care," Wyden said in a statement.

Meanwhile, dozens of trade groups, including the Chamber of Commerce, are pushing to make the pass-through tax cut permanent. This year, a bipartisan bill called the Main Street Tax Certainty Act was introduced in both houses of Congress to do just that.

One of the bill's sponsors, Rep. Henry Cuellar, D-Texas, pitched the legislation this way: “I am committed to delivering critical relief for our nation's small businesses and the communities they serve."

Georgia Sen. Perdue sold his home to a finance industry official whose organization was lobbying the Senate

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Sen. David Perdue, R-Ga., sold his Washington, D.C., home last year to a brokerage industry official whose organization is under the purview of a committee Perdue sits on.

The deal was made off market, without the home being listed for sale publicly.

Though an appraisal provided to ProPublica by the buyer found that Perdue sold for slightly under market value, four local real estate experts disagreed, telling ProPublica that the almost $1.8 million sale price Perdue garnered seemed high. Their estimates of the premium ranged from a few thousand dollars to as much as about $140,000. A fifth expert said the price was squarely fair market value.

Ultimately, congressional ethics experts said, their concern was that Perdue sold privately and to someone whose organization that he oversaw as a senator.

“Determining fair market value is always a gray area, unless the sales are done in a competitive open market," said Craig Holman with the watchdog group Public Citizen. “Since the purchase and sale of this property by Sen. Perdue was not done on the open market, it raises serious suspicions as to whether the sale was in fact at fair market value."

If the price was above fair market value, Holman said, “this would be a violation of his ethical obligations and an opportunity for those with business pending before Perdue's committee to curry favor."

A Perdue spokesperson said that the senator and his wife sold the townhouse at fair market price, and that the lender appraisal confirmed that.

“None of this had anything to do with the senator's official role," the spokesperson said. “The Perdues did not know any of the individuals, and they used the same realtor during the purchase and sale of the property."

Perdue's office provided a statement from the couple's real estate agent, Justin Paulhamus: “Since inventory was so limited at the time of the sale, we priced it at market value and were fortunate to get an offer."

Perdue's spokesperson said the senator's real estate agent “floated it off market first, and they would have put it on market, but got an offer at their asking price which was fair market value."

Perdue is locked in a runoff campaign against Democratic challenger Jon Ossoff. Along with fellow Georgia Republican Kelly Loeffler's race against Raphael Warnock, his contest could determine which party controls the Senate and with it, whether President-elect Joe Biden can implement much of his agenda.

Perdue has faced multiple allegations that he has mixed his private financial interests with his official work. The most prolific stock trader in the Senate, he bought and sold shares in companies that the committees he sits on have jurisdiction over. Some of his trades came at fortunate times. Earlier this year, the Justice Department investigated him and other lawmakers for possible insider trading. Perdue denied the allegations. Prosecutors ultimately decided not to bring charges against him.

Perdue's home buyer in October 2019 was Hillary Sale, a board governor for the Financial Industry Regulatory Authority, a privately funded self-regulatory body for the securities industry. The organization falls under the purview of the Senate Banking Committee, which Perdue sits on. Earlier in 2019, FINRA was lobbying on a bill out of the banking committee that would have required the organization to establish a fund to pay investors bilked by brokers.

A FINRA spokesman said the organization has not lobbied Perdue specifically. In a statement, Sale said she learned of the home though her real estate agent and never interacted with Perdue. She provided ProPublica with an appraisal from her lender showing the home was valued at $1.8 million, $11,000 over the amount she paid. Samer Kuraishi, who leads a real estate agency in Washington, said appraisals are done after a price is agreed to, and that they typically are engineered to match the sales price.

Perdue may have saved thousands by not putting his house on the open market.

Kuraishi and other experts said that when doing off-market deals, sellers can negotiate to pay their agents a smaller commission.

“In that scenario, an agent spends less on staging, less on marketing, less on open houses, less on virtual tours," he said. “It's typically an easier sale."

Perdue's spokesperson said the senator paid broker fees, but did not respond to questions about whether the fees were discounted.

Perdue's Capitol Hill home and many of those around it were built in the early 2000s by EYA, a developer that specializes in luxury townhomes that maintain the look and feel of historic buildings but come with amenities typically reserved for more suburban locales. They have individual garages and private courtyards. Perdue's home featured a rentable separate unit, connected to the main house through interior stairs.

At the time of the sale, FINRA was lobbying the Senate, according to its disclosure forms, and earlier that year its lobbyists were specifically focused on a bill that would have required the organization to establish a relief fund to provide investors with arbitration awards that went unpaid by FINRA's brokerage firms and brokers. The bill was authored by Sen. Elizabeth Warren, D-Mass., and fell under the jurisdiction of the Senate Banking Committee.

The committee had also held hearings that included harsh assessments of how well FINRA was policing its own. In 2018, an AFL-CIO official charged that FINRA was failing as a regulator because it was not forcing its members to pay the arbitration settlements.

Perdue's office declined to answer questions about where the senator stood on the bill, which did not pass, or whether he took any actions on it.

Ethics experts are generally troubled when politicians enter into transactions with people who have business before them. The legality of this sale hinges on whether the home was purchased at fair market value. If it was Apurchased for more than that, it would be considered a gift. Gifts of significant value to senators are required to be publicly disclosed. Perdue did not disclose any such gifts.

Earlier this year, ProPublica reported that Sen. Richard Burr, R-N.C., sold his Washington townhouse to a donor and powerful lobbyist who had business before him. Burr's office said the lawmaker notified the Senate Ethics Committee before the sale. Perdue's office declined to say if he took similar steps. The committee does not typically make such guidance public, and it did not respond to questions about whether Perdue sought advice in this case.

In order to avoid the appearance of a conflict, members of Congress who are buying or selling properties should do so on the open market to help ensure the price paid is fair and to avoid deals with people who have business before them, ethics experts say.

The five local real estate agents who reviewed the transaction for ProPublica had somewhat differing opinions about whether Perdue got an inflated price and, if so, how inflated. All cautioned that valuing a property is not an exact science.

One agent, assuming Perdue did not make significant improvements to the property while living there, priced the home at around $1,650,000. That would mean Perdue sold for about 8% over market. His office declined to say whether he had made those kinds of upgrades, but photos, the agent said, suggest he did not.

A second agent said the price also seemed high, but only about 2% over market value. The agent said prominent officials selling homes in private deals will often get a premium. “Buyers don't haggle at that point. If it's a senator, you're not going to go back and say, 'Actually, I'll give you 1.7.' They either pay the price or don't buy it."

A third agent said it seemed slightly above market. A fourth said the expected range for that property at the time would have been between $1.75 million and $1.785 million, a shade under Perdue's $1.789 million sale price. A fifth agent said the price Perdue got was squarely at fair market value. All of the agents asked that their names not be used so as not to affect their ability to continue buying and selling homes in the neighborhood.

The agents said that the price Perdue purchased the home for in 2015, $1.6 million, was about market rate at the time. That sale was made on the open market.

In that case, Perdue bought from Bill Cheney, the outgoing president of the trade group lobbying for credit unions; Cheney is currently president of a California-based credit union. Perdue has received donations from the trade group and, as a senator, has helped loosen regulations on credit unions.

One of the real estate agents who spoke with ProPublica noted the short time the home spent on the market before Perdue bought it. The home was put on the market on a Wednesday and Perdue agreed to a deal to buy it that Friday before there could be a weekend open house. The agent said it was atypical for a seller to commit to Perdue without holding an open house to find backup options.

Cheney and his wife told ProPublica they had an open house for brokers only before the home was put on the market. Perdue got no special treatment, they said, and they had no direct contact with him.

Perdue's spokesperson said the senator bought the townhouse above asking price.

“Absolutely nothing about the purchase or sale of the property had anything to do with the senator's official role, since they did not know the buyers or sellers, there could be no conflict of interest whatsoever," the spokesperson said.

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The Justice Department unleashes prosecutors to potentially intervene in the election

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The Department of Justice has weakened its long-standing prohibition against interfering in elections, according to two department officials.

Avoiding election interference is the overarching principle of DOJ policy on voting-related crimes. In place since at least 1980, the policy generally bars prosecutors not only from making any announcement about ongoing investigations close to an election but also from taking public steps — such as an arrest or a raid — before a vote is finalized because the publicity could tip the balance of a race.

But according to an email sent Friday by an official in the Public Integrity Section in Washington, now if a U.S. attorney's office suspects election fraud that involves postal workers or military employees, federal investigators will be allowed to take public investigative steps before the polls close, even if those actions risk affecting the outcome of the election.

The email announced “an exception to the general non-interference with elections policy." The new exemption, the email stated, applied to instances in which “the integrity of any component of the federal government is implicated by election offenses within the scope of the policy including but not limited to misconduct by federal officials or employees administering an aspect of the voting process through the United States Postal Service, the Department of Defense or any other federal department or agency."

Specifically citing postal workers and military employees is noteworthy, former DOJ officials said. But the exception is written so broadly that it could cover other types of investigations as well, they said.

Both groups have been falsely singled out, in different ways, by President Donald Trump and his campaign for being involved in voter fraud. Trump has repeatedly attempted to delegitimize ballots sent through the postal service, just as the country experiences increased voting by mail spurred by the coronavirus pandemic. He has also raised the specter that the ballots of military members, among whom he enjoys broad support, might be suppressed.

The DOJ and the White House did not immediately respond to requests for comment.

Experts who reviewed the revision said they were concerned it could be exploited to help the DOJ bolster Trump's campaign.

“It's unusual that they're carving out this exception," said Vanita Gupta, the former head of the DOJ Civil Rights Division under President Barack Obama. “It may be creating a predicate for the Justice Department to make inflated announcements about mail-in vote fraud and the like in the run-up to the election."

In a break from long-standing practice last month, a U.S. attorney in Pennsylvania publicly announced that the DOJ was investigating whether local elections officials illegally discarded nine mail-in military ballots. Attorney General William Barr personally briefed Trump on the case before it was publicly announced, The Washington Post reported. Trump later cited it as an example to support his claims of widespread mail-in voter fraud, a false assertion Barr has has helped amplify. It's not clear where the federal probe stands, but Pennsylvania's top elections official said early indications point to an error, not fraud.

The new policy carveout, Gupta said, could be designed to both justify the widely criticized Pennsylvania announcement and open the door for more such moves in the coming weeks.

Justin Levitt, a former deputy assistant attorney general in the DOJ's civil rights division, also expressed concern that the department could be encouraging prosecutors to make more public announcements about incomplete investigations, as they did in the Pennsylvania case.

“It alarms me that the DOJ would want to authorize more of the same in and around the election," he said. “It's incredibly painful for me to say, but given what we've seen recently, Americans shouldn't trust DOJ announcements right now."

The Friday email was sent to a group of dozens of prosecutors around the country known as district election officers. They monitor election procedures and take complaints on Election Day from the public about alleged crimes and serve as the federal points of contact for local election officials.

For decades, the work of federal prosecutors has been guided by a strict policy of non-interference in elections.

A 281-page document titled “Federal Prosecution of Election Offenses" is the handbook for district election officers. The latest edition, from 2017, warns against launching public investigations, without approval granted for extraordinary cases, into alleged fraud before an election is over.

Such a step, the handbook says, “runs the obvious risk of chilling legitimate voting and campaign activities. It also runs the significant risk of interjecting the investigation itself as an issue, both in the campaign and in the adjudication of any ensuing election contest."

One current DOJ official told ProPublica that prosecutors have historically been warned not to allow themselves to be dragged into candidate disputes. “That's what they drill into us: the policy of non-interference and never, ever, ever announce an investigation," the official said.

The Justice Department may have violated Attorney General Barr’s own policy memo

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When the Justice Department recently publicized an ongoing investigation into potentially improperly discarded Trump ballots, critics accused it of violating long-standing agency policy against interfering in an election.

But the unusual decision to publicly detail the Pennsylvania case may also have run afoul of guidelines that Attorney General William Barr himself issued to federal prosecutors this year, according to a memo obtained by ProPublica.

In May, Barr wrote a directive to all Justice Department employees imploring them to be “particularly sensitive to safeguarding the Department's reputation for fairness, neutrality, and non-partisanship" when it comes to election-related crimes.

“Partisan politics," he wrote, “must play no role in the decisions of federal investigators or prosecutors regarding any investigations or criminal charges. Law enforcement officers and prosecutors may never select the timing of public statements (attributed or not), investigative steps, criminal charges, or any other action in any matter or case for the purpose of affecting any election, or for the purpose of giving an advantage or disadvantage to any candidate or political party."

Nevertheless, last month Barr's Justice Department issued a press release announcing an investigation into whether local elections officials illegally discarded nine mail-in military ballots in Pennsylvania. The announcement of an open investigation was highly unusual. Even more abnormal was that the press release specified that at least seven of those ballots were for President Donald Trump.

While the motivation of the Pennsylvania press release is unclear, Barr had personally briefed Trump on the matter before the announcement, The Washington Post subsequently reported, citing an anonymous source. The president raised it in a media interview and then DOJ's Pennsylvania office announced the investigation.

Then, the Trump campaign quickly jumped on the Pennsylvania case to bolster those claims.

“BREAKING: FBI finds military mail-in ballots discarded in Pennsylvania. 100% of them were cast for President Trump. Democrats are trying to steal the election," a campaign official tweeted.

Justin Levitt, a former deputy assistant attorney general in the DOJ's civil rights division, said the Pennsylvania press release was “flatly inconsistent" with Barr's memo “and shamefully so."

“There's absolutely no legitimate law enforcement reason I know of to mention who the ballots were cast for: They were either dealt with properly or not properly," he said. “And if there's no good reason, it leaves only the most likely bad reason: that the identity of the candidate was revealed for partisan political purposes."

Some experts did not agree . Samuel Buell, a former federal prosecutor who is now a professor at Duke Law School, said Barr could argue that “any public announcement about a ballot investigation complies with [the memo] because the language is so broad."

Barr, he said, could say the “purpose" of the Pennsylvania announcement was not to affect the outcome of the election or support a particular candidate, but some other non-prohibited motivation like “protecting the vote."

The Barr memo closelymirrored election-year guidance that previous attorneys general sent out under both the Obama and George W. Bush administrations. Barr himself said at his Senate confirmation hearings last year that the election policies were in place because the incumbent party has “their hands on the levers of the law enforcement apparatus of the country, and you do not want it used against the opposing political party."

Asked whether the Pennsylvania announcement ran afoul of the agency's election policies, Justice Department spokeswoman Kerri Kupec responded: “No." She declined to elaborate.

The U.S. attorney overseeing the case is David Freed, a former Republican nominee for Pennsylvania state attorney general who was nominated for his current role by Trump in 2017. In a publicly released letter, Freed said he was detailing initial findings despite an ongoing investigation “based on the limited amount of time before the general election and the vital public importance of these issues."

A second memo obtained by ProPublica, issued in August by Corey Amundson, chief of the DOJ's Public Integrity Section, was even more explicit.

In it, Amundson reiterated the Justice Department's long-standing policy in election fraud cases: “Overt criminal investigative measures should not ordinarily be taken in matters involving alleged fraud in the manner in which votes were cast or counted until the election in question has been concluded."

The memo was addressed to the Attorney General Advisory Committee, a group of U.S. attorneys that advise the attorney general.

The policy Amundson cites appears to make an exception for extraordinary cases. But it seems unlikely that would apply to the case in Pennsylvania. That involved only nine ballots, which appear to have been discarded by a sole contract employee. The motivation may have been an innocuous attempt to follow Pennsylvania rules barring ballots sent back without the proper envelope.

Current and former Justice Department officials told ProPublica that, even without the memos from top agency officials including Barr, the Pennsylvania press release violated long-standing department policy. They explained that prosecutors not only should not announce that they are investigating, but that they should be slow even to start an election-sensitive investigation during the campaign. Such an investigation is so sensitive, an opposing candidate could use it to smear his or her opponent.

“That's what they drill into us: the policy of non-interference and never, ever, ever announcing an investigation," one official said. “That's why the thing in Pennsylvania is bonkers, completely bonkers."

A spokeswoman for Freed declined to comment.

Barr has amplified Trump's attempt to discredit mail-in voting before, claiming falsely that there is widespread fraud.

The Obama DOJ had a plan to hold police accountable for abuses. Trump's DOJ just undermined it

The Obama Justice Department Had a Plan to Hold Police Accountable for Abuses. The Trump DOJ Has Undermined It.

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It was caught on tape. A Seattle police officer lunged into the backseat of a patrol car. The Black woman detained inside had been combative, but she already had her hands cuffed behind her back. Still the cop punched her in the face, breaking an orbital bone.

The Seattle Police Department moved to fire the officer for excessive force, but in November 2018, the cop's union lawyer was able to convince an arbitrator to overturn the termination.

The implications of the incident went beyond the officer. The entire Seattle Police Department was under an agreement reached with the Obama administration Department of Justice because its officers had a pattern of abuse similar to the incident in the patrol car. That agreement, known as a consent decree, forced the department under tight federal oversight until it reformed itself. The Seattle police had already made a string of changes, including ending unconstitutional stop-and-frisk and improving training.

But the inability to easily fire the officer from the patrol car incident called the city's progress into question. If the department couldn't even get rid of officers it thought should be fired, then its disciplinary system potentially violated the settlement agreement, the judge assigned to oversee the consent decree said. The court-appointed independent monitor for the consent decree agreed.

But instead, the Justice Department of President Donald Trump took an unusual stance in court: It argued that the city's disciplinary system was fine the way it was.

District Judge James Robart was shocked. In a filing, he accused the federal government of reversing its position on “the old accountability system's inadequacy" and doing so “for the sake of political expediency."

In Seattle and jurisdictions across the country, the Trump administration's Department of Justice has pulled back on policing the police. It has not entered into a single new consent decree with any law enforcement agency suspected of systemic abuses of constitutional rights. It has only announced the completion of one investigation into such abuses.

But the pullback goes deeper. The Justice Department has also been undermining the existing agreements between the federal government and abusive police forces across the country, according to interviews with court-appointed monitors and former Justice Department officials.

The Obama Department of Justice entered into 15 consent decrees with law enforcement agencies, up from three under the Bush Justice Department. The settlement agreements, which come after a lawsuit by the federal government alleging unconstitutional policing, compel police agencies to fix themselves while under the close watch of Justice Department attorneys and an outside independent court monitor.

The Department of Justice was still overseeing all of these agreements when Trump entered the Oval Office in 2017. Supporters of the increased oversight worried that the Trump Justice Department would try to pull out of them entirely. It did so in Chicago just before an agreement was to be finalized and tried to in Baltimore. But instead of pulling out completely of those already well underway, it has eased up on enforcing them, managing to avoid negative attention and the ire of uncooperative judges, according to court-appointed monitors and former Justice Department lawyers.

The Justice Department has taken a similar approach in places like Cleveland, Los Angeles County and Newark, New Jersey, as it did in Seattle, with attorneys for the federal government failing to push for reforms, refusing to publicly back up frustrated monitors and not pressing local police forces to meet the requirements they agreed to.

The Justice Department declined to comment for this story.

As excessive force and killings by police have led to one of the biggest social justice movements the country has ever seen, the Trump administration has embraced police departments and attacked protesters as lawless and violent. Trump has taken on the “law and order" mantle as a centerpiece of his campaign. And top Trump officials, including then-Attorney General Jeff Sessions, have questioned whether the federal government should play an active role in reforming bad law enforcement agencies.

“If the city knows you're not going to litigate because the head of the Justice Department is saying they don't believe in consent decrees, then they know you're not going to get the authority and they call your bluff," said Sharon Brett, a former DOJ attorney who worked on investigations and consent decree enforcement during the Obama and Trump administrations.

People involved in these cases said career attorneys at the Justice Department's civil rights division are acting cautiously, seeking not to draw the attention and ire of the politically appointed bosses in Washington. The chill has led to an exodus of attorneys from the unit that handles consent decree enforcement since the start of the Trump administration. (The DOJ would not share personnel numbers with ProPublica.)

Court-appointed monitors tasked with examining the progress being made by local police forces have noticed the shift.

“You would never know they're party to the consent decree," one monitor said, asking for anonymity to avoid angering the Justice Department. “I've never seen DOJ lawyers be so passive."

Consent decrees are a relatively recent tool for reforming troubled police departments.

They were made possible by the Clinton administration's 1994 crime bill, the same piece of legislation that has become radioactive among criminal reform advocates for contributing to over-incarceration. A provision of the law empowered the Justice Department to sue cities and counties for unconstitutional practices by their cops and prosecutors.

The process begins with civil rights attorneys from the Justice Department opening what's known as a “pattern or practice" investigation into a police department or other law enforcement agency. They examine whether the rights of residents are being violated — either through excessive force, racially biased stops, unjustified arrests or other misconduct. On occasion, the Justice Department will sue those local jurisdictions or, in the most serious cases, enter into consent decrees.

Those agreements require the local jurisdictions to work with the Justice Department for years to complete a list of reforms and to prove to a judge those reforms are working. The court-appointed monitors, typically a police practices expert or former law enforcement official, examine how well the police force is implementing the changes in a series of public reports. If the local agency refuses to take required steps, or is too slow, it can be sanctioned by the judge on the case. The sanctions can include fines or even jail time for an obstructive police chief or other city official.

The process can be invasive and burdensome for local jurisdictions, particularly cash-strapped ones. After the shooting of Michael Brown, the unarmed Black teen whose death launched nationwide protests, Ferguson, Missouri, entered into a consent decree with the Obama administration Justice Department in 2016. The community has struggled to hire experts in data analysis and other fields that the agreement demands.

But experts believe the process is one of the most effective for righting wayward police forces.

“It's a once-in-a-lifetime opportunity. You get to fix things institutionally," said Peter Harvey, the former New Jersey attorney general and the current court-appointed monitor for the consent decree in Newark. “Once if you fix it organically, that culture persists."

One consent decree widely considered a success is the 2001 agreement reached with the Los Angeles Police Department. The complaints of racist and brutal policing went back decades, prompting riots, like after the 1991 Rodney King beating, and major scandals, including when officers in the Rampart anti-gang division were discovered to be planting evidence and carrying out unprovoked shootings.

The federal oversight in Los Angeles lasted what local officials complained was an interminable 12 years, but in the end, even longtime LAPD veterans praised its outcome. In 2013, Chief Charlie Beck credited the consent decree with making “this a department that I am proud to hand over to my children." A Harvard study on the reforms found that the police reduced incidents of serious force and that public satisfaction with the force rose to 83%.

From the beginning, the Trump administration took a hostile stance on these types of reform efforts. Trump's first attorney general, Sessions, set the tone when he said the investigations “undermine the respect for police officers and create an impression that the entire department is not doing their work consistent with fidelity to law and fairness." He pulled out of a consent decree effort in Chicago, leaving it to the state attorney general to pick up, and tried to pull out of an agreement in Baltimore, which a federal judge blocked. Just before he resigned in 2018, Sessions issued a memo requiring high-level approval for any new consent decrees and raising the standard that staff attorneys needed to meet before opening a new investigation.

In Los Angeles County, the Justice Department entered into a settlement agreement with the Sheriff's Department in 2015 after finding that cops assigned to the desert towns on the county's northern outskirts were discriminating against Black and Latino residents.

According to the complaint the Justice Department filed in court, rank-and-file deputies were stopping and searching Black residents at higher rates, even though they were found to have contraband half as often as white residents. Even people who posed no obvious danger — including domestic violence victims and minor traffic offenders — were routinely being detained in the back of patrol cars. The agency's deputies were assisting affordable housing inspectors in searches that intimidated Black residents and forced them from their homes.

Members of the department didn't do much to hide their bias. During a tour with federal investigators, a sheriff's supervisor remarked that all newly arrived Black residents in the area were current or former gang members. A sheriff's captain suggested that affordable housing residents were offering shelter to gang member relatives “from South Central" — a neighborhood on the other end of the county with a large percentage of Black residents..

But five years into the settlement agreement, the agency has not overhauled its data collection system to track its interactions with the public to see if people of color are still being disproportionately stopped or harassed, one of the key reforms the agency agreed to with the Justice Department.

“It is fundamental," said Joseph Brann, the co-chair of the team in charge of monitoring the agreement.

Both chairs, Brann and Angela Wolf, said the Sheriff's Department resisted an expensive fix. The settlement agreement only applied to part of the sheriff's jurisdiction, but an overhaul would require the sheriff to change his data collection agencywide.

In 2018, they pressured sheriff's officials to act. Their response was, “'We're gonna make some phone calls, we're gonna see,'" Wolf told ProPublica.

The monitors took that as sheriff's officials suggesting they would appeal to Justice Department supervisors to try to get around the requirement.

“It wasn't quite a threat," Wolf said. “But it was an 'uh huh, we'll see if you're right about that.'"

The staff-level attorneys are committed to enforcing the deal, but “we get the sense that higher up, supervisors are sometimes working in opposition to the mission," Wolf said. “We do know there were times when sheriff's officials made a phone call to higher-ups at DOJ," she said, adding, “We do know that level of influence was being offered."

And the department has still not revamped its system. The Sheriff's Department did not respond to questions from ProPublica.

The monitors' concerns go beyond the data issue. For a year and a half during the settlement agreement, sheriff's officials ignored requests to make agreed-upon changes to their use-of-force policy. Only recently did the office begin to engage again with the monitor. But to this day there is still not an approved new policy.

Cleveland entered into a consent decree in 2015 after the Justice Department found its officers were using excessive force on residents, shooting at people who didn't pose an immediate threat and using guns carelessly, including hitting people on the head with them. Cleveland cops were also using Tasers and pepper spray on people who were already handcuffed, at times not based on any threat they posed in the moment, but to punish them for earlier remarks. Officers who investigated their colleagues' shootings admitted their goal was to cast accused officers in “the most positive light possible."

In the consent decree with the Justice Department, Cleveland agreed that a judge would have the final say on a body cam policy. The city, with support from the police union, proposed that officers would not need to wear body cams if they were moonlighting.

When police officers worked as security at a Cavaliers game, for example, getting paid by a private entity, they weren't required to wear cameras, even though they would be armed, wearing their uniforms and functionally acting as police officers. The police union was determined not to bend on this. When the city tried a voluntary pilot program to encourage moonlighting officers to wear cameras, the union distributed a letter instructing its members that it “is the OFFICIAL UNION POLICY to refrain from 'VOLUNTEERING' for anything with regard to work."

The monitor objected to the moonlighting carve out.

“A system where one set of rules applies to officers working a city shift while another set of rules applies to officers working for a private employer fosters confusion, not confidence, among the community," Matthew Barge, the monitor in Cleveland, argued in court.

The judge assigned to the case also signaled he agreed: “When you're a police officer and you're policing, whether it's a bar or restaurant or whatever, people see you as a police officer." He expressed concern that officers were “not encouraged but discouraged to volunteer."

But at a June 2017 hearing, the Justice Department did not strongly support the monitor. The attorney told the judge that DOJ was “hopeful" that “the officers will see that using cameras on secondary employment is going to be beneficial for them and not burdensome."

The Justice Department, she added, “looks forward to hearing about the progress of the pilot program as the rest of the months go on." At that point, however, the pilot program had zero volunteers and was functionally dead.

Today, moonlighting Cleveland cops go about their duties without body cams.

Justice Department lawyers in Newark have taken a similar approach.

The city entered into a consent decree with the federal government in 2016. The Justice Department had alleged that a whopping 75% of the pedestrian stops Newark police made did not have a legitimate basis. Even though just about half the city's residents are Black, they made up about 80% of stops and arrests.

Last year, as the consent decree was ongoing, a Newark cop shot repeatedly at a moving car, even as his partner urged him to “Relax! Relax bro!" He killed the driver, a Black man, and seriously injured the passenger. The officer had fired three separate times during a short pursuit, while the suspect's car was in motion, a discouraged practice because of the danger it puts innocent bystanders in. The shooting was considered particularly reckless because the suspect's windows were heavily tinted.

The monitor on the case repeatedly asked for video footage of the shooting in order to assess whether the department's use-of-force policy needed revisions. He was repeatedly denied.

“The City and (Newark Police Department's) response in refusing to produce the requested information violated the letter and spirit of Consent Decree," the monitor wrote in one report. He only received the footage later, after it was aired on the local news.

The monitor could have used help from the Justice Department. But federal attorneys never spoke up.

“Not a word out of DOJ," said someone involved in the case. “No email, no phone call, nothing."

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Tom Price, head of the Department of Health and Human Services, came under scrutiny during his confirmation hearings for investments he made while serving in Congress. The Georgia lawmaker traded hundreds of thousands of dollars worth of shares in health-related companies, even as he voted on and sponsored legislation affecting the industry.
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“I did not resign,” he wrote in one tweet over the weekend. “Moments ago I was fired.”
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Another transaction that drew scrutiny was a 2016 purchase of between $1,001 and $15,000 in shares of medical device manufacturer Zimmer Biomet. CNN reported that days after Price bought the stock, he introduced legislation to delay a regulation that would have hurt Zimmer Biomet.
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Louise Slaughter, a Democratic Congress member from New York who sponsored the STOCK Act, wrote in January to the SEC asking that the agency investigate Price’s stock trades. “The fact that these trades were made and in many cases timed to achieve significant earnings or avoid losses would lead a reasonable person to question whether the transactions were triggered by insider knowledge,” she wrote.
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Along with the Price matter, Bharara’s former office is investigating allegations relating to Fox News, and has been urged by watchdog groups to look into payments Trump has received from foreign governments through his Manhattan-based business. Bharara’s former deputy, Joon Kim, is now in charge of the office, but Trump is expected to nominate his replacement within weeks.
ProPublica reporters Jesse Eisinger and Justin Elliott and research editor Derek Kravitz contributed to this story.
Do you have access to information about Tom Price that should be public? Email robert.faturechi@propublica.org or send him encrypted messages on Signal at 213-271-7217. Here’s how to send tips and documents to ProPublica securely.
For more coverage, read ProPublica’s previous reporting on how Tom Price’s office went to bat for a pharma company whose CEO donated to Price’s campaign.
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