New Jersey’s delegation in Congress: five failed to comply with ethics rules

Five members of New Jersey’s delegation in Congress were flagged for potential conflicts of interest, self-dealing, and disregard for a decade-old law designed to prevent corruption at the highest levels of American government.

Rep. Tom Malinowski established a blind trust after he previously made headlines for his 145 failures to comply with financial disclosures required under the federal STOCK Act, but a Business Insider analysis of congressional ethics records shows that Sen. Cory Booker, Rep. Chris Smith, Rep. Josh Gottheimer, and Rep. Mikie Sherrill are also on shaky ground.

Booker does not have his financial assets in a blind trust and one of his senior staff members violated the STOCK Act.

The STOCK Act was also violated by a senior staff member for Gottheimer, who buys and sells stocks in individual companies and he does not have their financial assets in a blind trust. Gottheimer’s estimated net worth was $8,935,664 in 2018, according to the Center for Responsive Politics and National Institute on Money in Politics at OpenSecrets.org.

Gottheimer has received more than $22 million in campaign contributions since 2015, according to reports based on Federal Election Commission data. Much of the money given to the Bergen County politician, who was disgraced former President Donald Trump’s favorite Democrats, came from Wall Street and other financial industry sources.

Sherrill, who buys and sells individual stocks in companies and does not have her financial assets in a blind trust, violated the STOCK Act two times totaling at least $150,000 but she provided proof of payment of any applicable fines.

Sherrill, the wealthiest member of the state’s congressional delegation, twice failed to properly disclose her husband’s stock sales. Her campaign committee fundraising, from 2017 – 2022, raised more than $17 million, based on Federal Election Commission data.

Sherrill has recognized that the ethics law includes “weak requirements” but she did not propose legislation to fix that.

Sherill and her husband, Jason Hedberg, decided to convert all of her individual stocks to exchange-traded funds (ETFs) that remove any appearance of conflict. The price of an ETF’s shares changes throughout the trading day as the shares are bought and sold on the market unlike mutual funds, which are not traded on an exchange, and can be bought or sold only once per day after the markets close.

Hedberg is the global head of equity derivatives sales at UBS Securities and was restricted from trading his own stocks even before his wife’s election to Congress.

Sherrill and Hedberg sold stock in 112 individual companies on February 20, 2020, and purchased ETFs for the same value the following day, according to a published report. Sherrill reported a home mortgage of at least $1 million and at least $15,000 in credit card debt after she was first elected in 2018.

Members of Congress, who are paid $174,000 a year, do not have to list their personal residences as assets but they are required to disclose the value of their assets in ranges.

Booker has a net worth of $3 million, .

Smith doesn’t trade individual stocks but he earned the attention of the financial and business news website because one of his senior staff members violated the ethics law.

Sen. Bob Menendez is reportedly in compliance with federal ethics laws, but in 2015, he was indicted in connection with a bribery scheme in which the New Jersey senator allegedly accepted gifts from Salomon Melgen, a Florida ophthalmologist, in exchange for using the power of his Senate office to benefit the doctor’s financial and personal interests.

The Senate Ethics Committee unanimously voted to admonish Menendez for breaking the law after his criminal trial resulted in a hung jury but Melgen was convicted in the biggest Medicare fraud case in U.S. history before Donald Trump, in one of his final acts as president, pardoned and commuted the sentence of the Palm Beach County doctor. The White House said the commutation was supported by Menendez.

“There’s no doubt the jet travel and political donations took place, and no doubt that Menendez interceded on Melgen’s behalf in various matters,” said Randall D. Eliason, a Washington Post contributing columnist who teaches at George Washington University Law School. “But neither of those things is illegal. It only becomes a crime if there is an agreement to exchange one for the other.”

Menendez took money from a crook, did favors for him and survived a two 2018 election challenges, one from a Democrat in the primary and the other from a Republican in November.

If voters re-elect members of Congress who disregard the law intended to prevent corruption, those same voters should expect those politicians to be corrupt.