The department’s Public Integrity Section, which has a mixed record in complex corruption prosecutions, is looking at whether senators broke the law with coronavirus-related stock trades.
The Justice Department’s highest-profile coronavirus prosecutions are being handled by an office poised for leadership changes, two people familiar with the cases told POLITICO.
Multiple U.S. Attorney’s offices — including the Southern District of New York — wanted to handle insider trading investigations of lawmakers, one of the sources said, but all the probes have been centralized in D.C. It would have been logical for SDNY to have jurisdiction: Wall Street is located there, and the district has extensive experience investigating and prosecuting complex financial cases. Other offices that telegraphed interest were the residences of potential targets.
Story continuesMeanwhile, Sen. Dianne Feinstein confirmed she had faced questions from the bureau about her husband’s stock trades in the early weeks of the pandemic. And Sen. Kelly Loeffler said she shared materials with the Justice Department and the Securities and Exchange Commission about stock trades in the same time frame.
The long shadow of its calamitous 2008 prosecution of Sen. Ted Stevens — when prosecutors withheld exculpatory information from the senator’s lawyers, leading to the Justice Department moving to dismiss the indictment in 2009 — still hangs over the unit. Since then, its lawyers have faced more defeats: an 8-0 Supreme Court ruling overturning the conviction of Republican Virginia Gov. Bob McDonnell, a deadlocked jury in the case against former Sen.
So the STOCK Act investigations come at a complex moment for the section, which often handles cases where the law is just as complicated as the facts. It could be hard to prove in court, for instance, why exactly the senators under scrutiny made specific stock transactions — whether they offloaded stocks because of public news reports out of Asia or because of dire warnings received from intelligence officials behind closed doors.
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