Shocked not shocked: federal officials in charge of the COVID response profited off their insider knowledge–before the general public was even aware of the threat. A Wall Street Journal investigation published Wednesday uncovered numerous stock trades by employees of the Department of Health and Human Services, the CDC, the Department of Transportation, the Treasury Department–even a deputy to Dr. Anthony Fauci.
They write:
In January 2020, the U.S. public was largely unaware of the threat posed by the virus spreading in China, but health officials were on high alert and girding for a crisis.
A deputy to top health official Anthony Fauci reported 10 sales of mutual funds and stocks totaling between $157,000 and $480,000 that month. Collectively, officials at another health agency, Health and Human Services, reported 60% more sales of stocks and funds in January than the average over the previous 12 months, driven by a handful of particularly active traders.
It’s been an open secret that many have profited handsomely off the pandemic, with ten of the world’s richest people reportedly doubling their fortunes during the first two years, Pfizer hauling in an estimated $54 billion in vaccine and treatment revenues in 2022, and Fauci’s net worth somehow ballooning to almost $13 million.
But there are a lot more people who made a mint than we knew:
Federal officials owned millions of dollars of stock in industries most affected by the pandemic and the government’s response. About 240 officials at health agencies and at the Pentagon, a key player in the vaccine rollout, reported owning a total of between $9 million and $28 million in stocks of drug, manufacturing and biotechnology companies that won federal contracts related to Covid-19 in 2020 and 2021, the Journal’s analysis found.
The Journal goes on to discuss numerous other stock trades that had “exquisite timing,” but the moves by Hugh Auchincloss, principal deputy director at the NIH’s National Institute of Allergy and Infectious Diseases, stick out. Four days after the Institute publicly reported the first U.S. COVID infection, Auchincloss started selling:
…while the stock market remained lofty, Dr. Auchincloss reported selling $15,001 to $50,000 of a stock mutual fund. Days later he sold two more mutual funds and a stock, Chevron, according to his financial disclosures, which give wide dollar ranges.
He wasn’t done though. At the end of January, as the severity of the pandemic became clear, Auchincloss got rid of more holdings:
Auchincloss disclosed six sales of mutual funds that… totaling between $111,006 and $315,000 in value.
His January sales amounted to the largest number of transactions he had reported for a single month since 2018, according to his financial disclosures.
Each holding he sold fell sharply in the market downturn that soon followed, as the public and investors started paying attention to the threat posed by Covid-19.
CDC epidemiologist Stephen Redd had a similar series of fortuitous trades. Elaine Chao, former Transportation Secretary and wife to Senate Minority Leader Mitch McConnell, made a killing in March of 2020, investing in a mutual fund that soared 57 percent by the end of the year. What else was going on in March? Mitch McConnell was working on a COVID relief bill. Hmm.
The Treasury Department didn’t miss out on the action, reporting about 30% more stock and fund purchases in February than the average over the previous 12 months. Two officials resigned.
There are laws against unethical trading, and federal employees are not allowed to work on issues where they have a financial stake. Insider trading is also banned. It’s hard to believe that all these laws were followed to a T, though; otherwise, you’d have to believe that a whole lot of folks just got lucky with their trading, all at the same time.
The chaotic and overbearing pandemic response caused great harm to many people and ruined lives–but plenty of D.C. insiders made out like bandits.