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When told about Graham's investments in Exelon, Duke, and TXU, Gue adds, "It certainly does raise the specter of potential conflict of interest... Politicians are there to protect their constituents and not to protect their shareholder interests."
Shareholders, including Graham, lost money anyway. He bought the stock on March 21, 2001, when it was selling at about $60 a share. He sold it on November 5, 2001, a day that saw it close at $43.75 a share -- more than a 25 percent slide.
He might have done better financially to hold onto it. Today, it's back up to around $60.
So Graham owned as much as $80,000 worth of stock in the nuclear industry while he was promoting it on Capitol Hill. What of it?
"If he's buying energy stock while he's sitting on the committee, that sounds shady to me," says Geoff Ward, a legislative associate with Common Cause in D.C. "It's definitely on the dark side of a gray area."
Despite several interview requests, Graham wouldn't comment for this story. But his campaign's communications director, Steve Jarding, spoke about it, and the campaign sent a ten-page written response to New Times'findings. The unsigned memorandum claims that only Mrs. Graham controls the Northern Trust stock account. It also alleges that Northern Trust made trades without her permission and backs up that assertion with a June 13, 2003, letter (sent after New Times' initial query of the campaign) from Northern Trust Vice President David Kamons addressed to Adele Graham. "We will continue to exercise our discretion as to security selection and the timing of security trades," Kamons wrote in the letter. "As in the past, we are choosing stocks and bonds to purchase or sell based on the bank's research inputs and policies, without your prior notification or approval."
As for the Exelon purchase, the campaign vehemently denies that the Grahams were trying to profit from the senator's legislative agenda. "The timing of the purchase had nothing to do with the [Graham-sponsored] bill introduced that month in the Senate or the Washington Times story on how that bill would be a boon to the nuclear industry," the campaign claims in its response. "If that was the case, the Grahams most certainly would have started purchasing other nuclear energy stocks within the same period -- they did not do so."
The Grahams, however, did buy Duke stock later that same year. The response also mentions that Adele Graham bought and sold several stocks on the same day as she bought Exelon.
The senator should be happy he's not elected to state or local office; most are governed by laws forbidding elected officials from having a financial stake in any business they regulate. Last August, for instance, an ethics panel forced New York Mayor Michael Bloomberg to sell $45 million in stocks because some of the companies did business with the city.
Federal law holds executive branch officials to the same standard. For instance, Defense Secretary Donald Rumsfeld recently recused himself from any Pentagon meetings in which HIV/AIDS was discussed because he owns stock in a company that is marketing antiviral medication.
Not so in Congress. Ethics rules forbid members from using their legislative power to advance their financial interests or those of a "limited class" of people to which they belong, according to the Senate Ethics Manual. Previous Senate Ethics Committee rulings, however, have greatly narrowed the meaning of those words, and stockholders are generally not considered to be a "limited class."
There are many loopholes. For instance, one precedent cited in the ethics manual holds that a senator may back legislation that personally benefits him significantly, "but if it also has a broad, general impact on his state or the nation," then the law doesn't apply. That's one even a less-than-sly senator could drive a nuclear waste truck through.
In general, the Senate Ethics Committee has taken a laissez-faire attitude. One precedent is that committee members should have faith that elected representatives act on behalf of the "public interest and public good, not on personal pecuniary interest."
This may sound naive, but it's really self-serving.
"Senators regulate themselves, and they don't want the ethics committee to be a tough body," Common Cause's Ward says. "The committee grants senators great leniency when people outside of Washington would say this is not right."
Stock scandals have broken out occasionally in Congress, most notably in the case of current Senate Majority Leader Bill Frist. In 1999, Frist helped defeat the Patients' Bill of Rights while owning several million dollars worth of stock in his family's health care business, Columbia/HCA (which has a history of fraud and corruption). Other than some bad publicity, Frist never paid a price for this apparent indiscretion.
In its defense, Graham's camp points to two fellow senators and presidential candidates, John Kerry and John Edwards. Kerry, whose wife, Teresa Heinz, is heir to the ketchup fortune, owns stock in several energy companies, as does Edwards. But neither Kerry nor Edwards is a member of the Senate Energy and Natural Resources Committee.
"It's ridiculous to make an issue out of it," Jarding admonishes. "Do you expect every member to sell all their stock?... You and I may not agree with the [Senate Ethics Committee], but they create the standards, and Sen. Graham is adhering to those."