Bob Corker, Corrupt? What a Surprise
By Matt Taibbi, Rolling Stone
24 December 17
The Tennessee senator's mysterious financial success has been one of
Washington's worst-kept secrets for years
So Tennessee Senator Bob Corker is in trouble now, because he flip-flopped
to vote for Donald Trump's tax bill after a provision was included that
reportedly helps him personally.
Color me not shocked. I spent most of this past summer investigating Corker,
whose personal finances have been an open scandal for years. Everything you
need to know about the Senator can be discerned from this chart.
Click on that link and you'll see: Corker went from having an estimate net
worth of zero when he entered the Senate in 2007, to being (as of 2015) the
fourth-wealthiest man in the Senate, worth $69 million.
How do you increase your net worth by 69 million dollars while you're
working full-time as a Senator? That is not an easy story to explain.
Moreover, Corker didn't just enter the Senate without any money. He entered
it carrying, according to his own disclosure forms, a mountain range of huge
loans.
Corker took office in January, 2007, during the last gasp of the Bush/Rove
political juggernaut. The Iraq war had gone south and the Republicans had
just been routed in midterms. The financial crisis was just around the
corner. And nobody paid attention to the smooth-talking freshman Senator
from Tennessee, who turned out to have some financial issues.
The former Chattanooga mayor's election was not without controversy. Corker
was a country-club Republican who used an old Southern formula to get
elected. He benefited from a lurid race-baiting RNC ad that showed a white
woman winking and asking Corker's African-American opponent, Democrat Harold
Ford, to "Call me!"
But no one knew about Corker's private peccadilloes.
It wasn't until Corker took office and filled out disclosure forms that his
finances became public - sort of. Few in the media seem ever to have read
the "liabilities" section of Corker's first disclosure, where the former
mayor and construction magnate listed a series of massive outstanding loans.
At the low end, Corker appeared to owe a hair-raising $24.2 million. At the
high end, $120.5 million.
He took office in debt to some of the nation's biggest lenders - including
somewhere between $12 million and $60 million in debt to GE Capital alone.
Corker had been a construction magnate in Tennessee before taking office, a
sort of mini-Trump. Before he ran for office, he sold off his business to a
local developer named Henry Luken.
It has always been Corker's contention that when he sold his business, his
debts were also sold, meaning he was not technically in debt when he went to
Washington. Still, he continued to list the loans as liabilities.
This is what Corker spokesman Micah Johnson told me this summer, about
Corker's outstanding loans back then, and why they were listed on his Senate
disclosure:
"On January 4, 2006, in preparation for his run for the Senate and to avoid
conflicts, Senator Corker sold the majority of his commercial real estate
portfolio. The loans. were transferred with the properties," Johnson wrote.
"While the sale took place in January, 10 months before he was elected and
one year before he took office, they still would have been listed on his
2007 financial disclosure since the sale took place in 2006."
Many of Corker's critics have disagreed with this interpretation of events.
But even if the loans were discharged when he sold his company, it's what
happened after Corker got elected that boggles the mind.
Ten years before reporters would swarm over Trump for (among other things)
raising fees at his Mar-a-Lago resorts before making a series of
taxpayer-funded visits, Corker tested the limits of the profiteering
possibilities in the legislative branch, essentially becoming a full-time
day-trader who did a little Senator-ing in his spare time.
In the first nine months of 2007, Corker made an incredible 1,200 trades,
over four per day, including 332 over a two-day period.
When I asked Johnson about this, and asked if Corker was making those trades
himself or through a broker, Johnson gave a curious answer.
"Soon after taking office in January of 2007, rather than continuing to have
a broker make discretionary transactions on his behalf throughout the day or
week on a wide range of stocks in various companies, the senator felt it
would be prudent to eliminate this arrangement," Johnson said. "The closing
out of this arrangement would have added substantially to the number of
trades normally made in the broker's discretionary account."
Johnson seems to be saying that Corker would have made substantially more
trades if he had executed them through a broker. So, he didn't. I can offer
no commentary shedding light on what this means, except to say that at the
bottom of all of this is the still-incontrovertible fact that Corker made a
truly awesome number of financial transactions while in office.
By 2014, when Corker sat on the Senate Banking Committee, a position that
gave him regular access to prime information about the future direction of
the markets, the Tennessee Senator still had his foot on the gas. He made
930 stock trades that year.
Of his colleagues on the committee, Rhode Island's Jack Reed made 39 trades,
Pennsylvania's Patrick Toomey 26, and nobody else made any - meaning Corker
made 93.5% of all trades made by the legislators most plugged-in to the
country's finances.
When I asked about that extraordinary volume of trading in 2014, when Corker
sat on the Banking Committee, Johnson answered thusly: "In 2014, Senator
Corker entered a separately managed account (SMA), which is a portfolio
managed by a professional asset management firm. Since he had not previously
been in a SMA, he asked the Senate Ethics Committee for a ruling on how they
should be reported," he said.
He went on: "The Senate Ethics Committee studied the issue for several
weeks, and out of an abundance of caution, advised us to report all
underlying positions of the account, even though the senator was making no
investment decisions."
A Separately Managed Account is not the same thing as a blind trust. That
the Senate Ethics Committee advised Corker to continue reporting his
positions even if the senator was making "no investment decisions" was
noteworthy. And no matter what, it continued to be true that Corker was
making a dizzying number of financial moves while sitting on the Senate
Banking Committee.
Corker's activities didn't go completely unnoticed. A few ethics groups
cried foul over the years.
Anne Weismann, director of the Campaign for Accountability, which filed a
complaint against Corker in 2015, described Corker's trading history in
damning terms.
"Senator Corker's trades followed a consistent pattern," she said. "He
bought low and sold high. It beggars belief to suggest these trades -
netting the senator and his family millions - were mere coincidences."
One financial analyst I know said Corker's trading patterns looked more like
the work of "an office of multiple analysts all grinding at least 60 hours a
week" than like the work of "one guy moonlighting as a Senator."
Johnson's responded on behalf of Corker, stating that they were "yet another
baseless accusation by this political special interest group. These claims
are categorically false and nothing more than a smear campaign. When
amending the senator's financial disclosure report, our office worked
directly with the Senate Ethics Committee to ensure items were reported
accurately and in line with Senate guidelines."
Corker's name sometimes comes up in stories about other members of Congress
who trade auspiciously and often. There are conflicting views on the
propriety of such activities, and Corker has never been formally censured.
Until this week, Corker's history has been scrutinized only occasionally,
and most often because of the role he's played in an unrelated controversy
known colloquially as #Fanniegate.
This monstrous dispute over the future of the "government sponsored
entities" Fannie Mae and Freddie Mac, in which Corker played a loud and
conspicuous part, made him enemies among investors who are embittered over
the unilateral seizure of the two companies' profits six years ago, on
August 17th, 2012. Corker supported that controversial and unprecedented
move, known as the "revenue sweep."
But other than that affair, few paid attention to Corker over the years.
There was some guffawing when it was reported last winter that Donald Trump
may have passed over Corker for the Secretary of State job because of his
height.
Six months or so later, Corker was seen playing golf with Trump and Peyton
Manning. No hard feelings. This, too, is in keeping with Corker's bio. As
much as any politician in America, he likes to keep his options open,
politically and ideologically.
When Corker took on Trump this fall - saying the White House was "an adult
day care center" and that Trump's behavior threatened "World War III" - he
suddenly became a darling of sorts in the liberal media.
Now he's a bad guy again, for reportedly doing what he's always done, acting
in his own financial interest while earning a paycheck as a U.S. Senator.
The Corker story to me is a classic example of why it's always dangerous to
overlook a politician's failings because he happens to be on the right side
of some partisan debate at a given moment in time. The reason is obvious:
these types eventually revert to form, and soon enough, a politician's flaws
will be working against you again, rather than for you.
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