Tuberville among four in Alabama congressional delegation to invest in corporate stocks

WASHINGTON — Four members of Alabama’s nine-person congressional delegation report owning stocks in individual companies, a situation that could potentially present a conflict of interest with their official duties, according to a prominent ethics watchdog.

Members of Congress are required to file annual disclosures of their assets and liabilities, which gives the public a sense of their personal financial interests, though they list only a value range instead of specific dollar amounts. 

States Newsroom reviewed the most recent disclosures from U.S. Sens. Tommy Tuberville and Katie Britt and Alabama’s seven-member U.S. House delegation. Tuberville, Britt, and U.S. Reps. Robert Aderholt and Terri Sewell reported owning individual corporate stocks.

Annual reports covering the previous calendar year are due in May, though members can receive extensions. The reports reviewed this month were filed between May and August 2022 and cover 2021.

Tuberville, a Republican, held a particularly robust group of financial interests, with individual corporate stocks and stock options numbering in the hundreds and stakes in nearly two dozen agriculture futures.

Federal law is permissible when it comes to members of Congress buying and selling securities, though there have been efforts to ban members from trading individual stocks. There have been no allegations that any member of the Alabama delegation has engaged in insider trading or done anything else illegal.

But holding stocks of individual companies raises more conflict-of-interest possibilities for elected officials than investments in broad portfolios like mutual funds, Virginia Canter, the chief ethics counsel with the Citizens for Responsibility and Ethics in Washington, a watchdog group, said. 

“You can be a market participant by investing in a diversified mutual fund,” she said. “Individual stock holdings, you’re more likely to have a conflict of interest. A diversified portfolio, whatever issue you’re going to be working on, it’s not going to impact the value of the fund overall.”

Lawmakers’ influence on public policy can affect the value of a particular company or even an entire industry. If they own stock in an individual company, it creates a conflict of interest, Canter said.

“They can’t act in the public interest because they have a personal interest not to,” she said.

Through their committee assignments, members may have access to information that is unavailable to the public. They also have a chance to shape the policies that govern the industries in which they invest.

“Are they investing in companies that will benefit from what’s coming out of the committee? Or what’s not coming out of the committee? Is the committee refraining from oversight on certain issues?” Canter said. 

Tuberville

The portfolio of the state’s senior senator, Tuberville, raises particular issues because of its breadth, his committee assignments and Tuberville’s unusually active trading history, Canter said.

Tuberville owns more than 250 individual stocks and stock options through his investments in three managed brokerage accounts, according to his report for 2021.  Tuberville has no day-to-day involvement with his portfolio, according to a spokeswoman for his Senate office.

“Senator Tuberville has long had financial advisors who actively manage his portfolio without his day-to-day involvement,” the spokeswoman said in an email. The spokeswoman declined to be identified by name.

The presence of a third-party money manager does not negate the potential conflict, Canter said.

“He can still tell them what he’s interested in and not interested in,” she said. “We don’t know what the parameters are and what instructions have been given.”

Tuberville also reported 22 investments in corn, soybean, cattle, wheat and other agricultural futures, though only one cattle contract is worth more than $1,000, according to his filing. Tuberville is a member of the Senate Agriculture Committee.

It’s not uncommon for farmers to buy interests in agricultural commodities, Canter said.

Tuberville does list a company called Tiger Farms LLC on his report. But, according to the report, the only asset the company owned was undeveloped land, making it unclear if it’s a working farm. 

While mutual funds are generally safer from a conflict-of-interest standpoint, Tuberville’s investment of between $50,000 and $100,000 in an aerospace and defense mutual fund is problematic because of this membership on the Senate Armed Services Committee, Canter said.

Tuberville also reported owning between $16,000 and $66,000 in stocks of defense contractors Honeywell International and Raytheon Technologies Corp. 

He also reported between $15,000 and $50,000 of stock in Archer-Midland-Daniels Co., an agriculture conglomerate.

Trading volume

Tuberville is also unusual in Congress for the volume of his trading.

He recorded 164 transactions for either himself or jointly with his spouse in five reports between September 2021 and January 2022. Other members of the delegation filed two or fewer periodic transaction reports, which included, at most, a handful of transactions.

Tuberville’s most recent report, filed Jan. 13, listed 24 trades. The combined sales and purchases were worth at least $850,000.

The aggressive financial management makes it difficult to ascertain what interests he actually holds at any given time, Canter said.

Tuberville also made use of stock options, a higher-risk type of investing even than individual stock.

“He’s speculating,” Canter said. “This is not a conservative investment portfolio.”

Other members

Tuberville is not the only member of Alabama’s delegation to hold stocks of individual companies — or of companies that would fall within their committee jurisdictions.

Aderholt, a Republican who chairs the U.S. House Appropriations subcommittee on health spending, reported a $1,000 to $15,000 investment in GlaxoSmithKline, a pharmaceutical company, and the same dollar range in Tekla Healthcare Investors, a fund that invests in biotechnology, pharmaceuticals and medical devices.

Aderholt also reported holding less than $1,000 of stock in electric automakers Rivian and Lucid. He sold between $1,000 and $15,000 worth of Tesla stock in December, according to a periodic transaction report.

Electric cars have been the subject of some policy debate in Congress as a tool to reduce greenhouse gas emissions. Tax credits for electric cars were included in Democrats’ large-scale climate, health and taxes bill last summer. Aderholt, along with every House Republican present, voted against the bill on the floor.

None of Aderholt’s stock investments were of more than $15,000, which is the maximum for employees in the executive branch. There is no prohibition for the legislative branch.

U.S. Sen. Katie Britt, a Republican who took office last month, and her husband also held 13 corporate securities stocks. Spouses’ interests are reported as part of congressional financial disclosure forms.

Britt and her husband each reported Apple stock worth between $50,000 and $100,000, and jointly owning between $500,000 and $1 million of Apple stock.

Sewell, the only Democrat in Alabama’s delegation, reported corporate stocks in Cisco Systems and General Electric, each between $1,000 and $15,000.

Spokespeople for Aderholt, Britt and Sewell did not respond to messages seeking comment.

Crypto holdings

U.S. Rep. Barry Moore, a Republican, reported owning a cryptocurrency account worth between $15,000 and $50,000.

He sold a portion valued between $1,000 and $15,000 in October, according to a periodic transaction report.

Congress has debated whether to more strictly regulate cryptocurrencies, a decentralized category of currency that is neither issued nor controlled by governments. Cryptocurrencies are generally not regulated as most securities are, though they are sometimes traded in similar ways.

Aides to Moore did not return a message seeking comment.

Real estate another common asset

Real estate and business ownership made up much of the value of other members of the Alabama’s delegation’s net worth.

Mike Rogers, the new chairman of the House Armed Services Committee, has shares of between 20% and 50% in three companies listing real estate assets. 

His 20% stake in Capital Development LLC is worth between $250,000 and $500,000. The company’s sole asset is 200 acres of land in Anniston, Alabama, according to Rogers’ 2022 form.

The value of his 41% stake in Venture Properties LLC is not listed, but three commercial rental properties in Anniston associated with the company are worth between $315,000 and $650,000. Rogers’ 50% ownership of Initial Investments LLC includes two properties in Oxford, Alabama, worth between $65,000 and $150,000.

With reported assets totaling between $4.6 million and $15.4 million, U.S. Rep. Jerry Lee Carl Jr. is perhaps the wealthiest member of Alabama’s U.S. House delegation.

The most valuable properties in Carl’s report were Advance LLC, a commercial real estate company in Mobile, Alabama, and River Oaks Landing LLC, a bed and breakfast in Mobile. Both businesses are worth between $1 million and $5 million, according to Carl’s report. 

Carl also listed Butterfly & Cricket LLC, worth between $500,000 and $1 million. A description line on the report indicates the value is from timberland. 

Freshman Republican Dale Strong listed 16 real estate properties. One property, a family farm in Hazel Green, Alabama, sold in April 2021 for between $1 million and $5 million. Two others, a shopping center and land belonging to Strong Family Properties, LLC, are worth that range, according to his report.

Strong, who was the Madison County Commission chairman before winning election to Congress, reported a salary of $117,000 for that position in 2020, the last full year covered by his 2021 report.

The most valuable asset U.S. Rep. Gary Palmer, a Republican, listed was $100,000 to $250,000 of timberland owned through a business called Canaan LLC. 

Spokespeople for Rogers, Carl, Strong and Palmer did not respond to messages with questions about their reports.

Football connection

The disclosure forms of Tuberville and Britt reflected their shared personal histories with football. 

Britt’s husband, former professional football player Wesley Britt, reported between $200,000 and $500,000 in an NFL 401(k) plan and another $100,000 to $250,000 in an NFL player annuity program. Britt also listed an NFL pension plan, but said the value could not be ascertained.

Tuberville, a former Auburn University football coach, received a $761 royalty payment last year from WB Studio Enterprises Inc. for his appearance in the 2009 film “The Blind Side,” in which he played himself.