Rep. Tom Malinowski’s stocks will be a campaign issue in the seventh congressional district next year.
The two-term congressman is facing renewed questions about his failure to divulge up to $3.2 million in trades in the wake of an Associated Press report that renewed questions about stock disclosures Malinowski filed months late.
“It heightens the likelihood that this becomes one of the defining issues of the race because now we’re not just talking about late disclosure,” said Micah Rasmussen, director of Rider University’s Rebovich Institute for New Jersey Politics. “We’re talking about the reasons for the late disclosure because there were controversial trades.”
Absent major changes to his district, Malinowski is sure to face another competitive race next year. While he has not announced a repeat bid for the congressman’s seat, State Senate Minority Leader Tom Kean (R-Westfield) is not seeking another term in the legislature and is widely expected to run for Congress again in 2022.
Former U.S. Senate candidate Rik Mehta has already announced his intent to run for the seventh district’s seat.
National Republican groups are watching, too. The National Republican Congressional Committee, the Republican National Committee and the Congressional Leadership Fund, a super PAC with ties to GOP leaders in the House, each launched attacks over Malinowski’s stock trades Friday morning, and it’s not the first time they’ve weighed in on the issue.
“When COVID-19 hit, Tom Malinowski wasn’t rooting for American businesses to succeed, he was betting against them in the markets, shorting their companies, and hoping they’d fail to make big profits,” CLF communications director Calvin Moore said. “Tom Malinowski put himself and his own back pocket first, giving New Jersey voters every reason to show him the door.”
There’s no evidence that suggests Malinowski traded on insider information available to him because of his position in Congress, though that point may get buried under news the congressman swapped shares of companies developing treatments, tests and vaccines for COVID-19.
Broadly, the controversy over the Democrat’s finances is little different than what it was in March, when Business Insider first reported the lateness of his disclosures. Those filings, ones detailing up to $1 million in trades involving firms with a stake in the pandemic, were submitted months after they were due, and some are still unavailable.
The congressman has said tardiness was the result of an oversight, and he’s since moved to establish a blind trust for his assets. The congressman’s broker, he said, made the trades without his say-so.
“These trades were made solely by his broker based on publicly available information and without Congressman Malinowski’s input of prior knowledge,” Malinowski’s congressional office said in a statement Friday.
The office’s response included a statement from Gagnon Securities, Malinowski’s New-York based brokerage, affirming that account of events.
The renewed focus on Malinowski’s stocks does not appear to have softened support for him among the district’s Democratic county chairs.
“No, and I can tell you, I think that Tom Kean is already getting nervous inside of his campaign,” Somerset County Chairwoman Peg Schaffer said when asked if the renewed focus on the congressman’s finances could impact her support of Malinowski.
She said she hoped the report wouldn’t make it more difficult to draw him a safer district during this year’s congressional reapportionment.
Warren County Democratic Chairman Tom Palmieri declined to comment, saying he had not read the AP report. Malinowski would benefit from shedding portions of Warren County from his congressional district.
Kean won all but one of the seven Warren County towns in the district last year. He lost Phillipsburg by 72 votes, a margin a little greater than one point, but carried the county by just under 3,000 votes, a margin of about 14 points.
State Sen. Nicholas Scutari (D-Linden), who is also Union County Democratic chairman, shared Schaffer’s view, saying the absence of evidence suggesting insider trading made the issue largely moot. He did not believe the matter would impact the way the district’s lines are drawn.
“It shouldn’t because of the very fact that if he didn’t act on insider information, which there’s no indication that he did, that means he didn’t do anything wrong other than this late filing, which is — that could happen to anyone,” Scutari said.
The view from those in the orbit of the congressman’s likely opponent weren’t quite as charitable.
“I don’t know how Tom Malinowski can look a voter who lost their job during the pandemic in the eyes and tell them with a straight face that he fought for them in Congress,” said Harrison Neely, a Republican consultant who worked on Kean’s campaign.
“The truth is he chose to be financially invested in the failure of the American economy,” he said. “He went so far as to break the law to cover up his pandemic profiteering because he knew how damaging these stories would be.”
A Democratic White House may not do Malinowski many favors either. He won his first term in 2018’s wave election, ousting Rep. Leonard Lance (R-Clinton Township) by about five points amid backlash to the first two years of President Donald Trump’s term.
His 2020 margin was far slimmer. That race took days to call as the massive 28,412-vote lead Malinowski gained through early mail-in ballot returns on election day nearly evaporated. Late-arriving vote-by-mail ballots broke heavily Republican favor.
The final margin had the incumbent up by only 5,329 votes, or a little more than one point.
There is a silver lining for Malinowski: Election day is still more than 17 months away.
“You always have to temper things and remember that you’re in the heat of the moment,” Rasmussen said. “What the story looks like tomorrow is different than what it looks like today.”