The House Ethics Committee announced on Tuesday that it was continuing its inquiry into Rep. Tom Malinowski’s (D-Ringoes) stock trades, another step in a long process that began with a March Business Insider investigation and has since evolved into a major political talking point.
But for those who haven’t followed the story’s twists and turns closely, the latest development may be hard to contextualize. What is Malinowski in trouble for? What does Tuesday’s Ethics Committee release signify? And, most importantly, what happens now?
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What, exactly, is the House Ethics Committee looking into?
As Business Insider first reported in March, Malinowski failed to disclose dozens of 2020 stock trades under the terms of the federal STOCK Act, which mandates that members and employees of Congress report stock transactions within a 45-day period.
Notably, some of Malinowski’s stock actions took place in the early days of the Covid pandemic. Malinowski maintained that the trades were made by his broker without his involvement, and that he provided no insider information.
Malinowski’s case went to the Office of Congressional Ethics, which forwarded it on to the House Ethics Committee, but that still didn’t stop the congressman from belatedly disclosing stock trades once again in the meantime.
This summer, Malinowski has changed course: first directing his financial advisor to cease all stock trades, then putting his assets into a blind trust two weeks ago. That doesn’t necessarily clear him of his past actions, however, and the Ethics Committee’s inquiry remains ongoing.
What did Tuesday’s announcement from the Ethics Committee mean?
Essentially, it means that the inquiry isn’t over yet. The committee could have chosen to end its probe into Malinowski’s stock trades one way or another, but instead gave itself at least another month and a half to continue its work. On or before October 21, the committee will announce its next course of action.
As Reps. Ted Deutch (D-FL) and Jackie Walorski (R-IN) – the chairman and ranking member of the Ethics Committee, respectively – were careful to note in their release, however, the continuation of the inquiry does not imply guilt on Malinowski’s part.
“The Committee notes that the mere fact of a referral or an extension, and the mandatory disclosure of such an extension and the name of the subject of the matter, does not itself indicate that any violation has occurred, or reflect any judgment on behalf of the Committee,” they wrote.
When will the case be firmly resolved?
It’s not yet clear. The Ethics Committee’s announcement yesterday gave the committee a deadline of October 21 – but, importantly, this does not mean the inquiry will necessarily end then.
The committee could clear Malinowski or formally sanction him for wrongdoing, or it could choose to expand the inquiry further. If the latter happens, the consequences (or lack thereof) Malinowski will face likely won’t be known for some time.
What formal consequences could Malinowski face?
If history is any guide, the most likely consequence for Malinowski would be a fine, and possibly a paltry one at that. In July, Rep. Blake Moore (R-UT) was fined $200 by the Ethics Committee for failing to disclose over $1 million in stock trades.
While harsher sanctions are theoretically within the committee’s purview, the chances of a consequence as extreme as expulsion, for example, seem very slim.
Could the inquiry damage Malinowski’s political future?
In many ways, it already has. Malinowski barely beat Senate Minority Leader Tom Kean, Jr. (R-Westfield) in 2020, and with Kean back for a rematch in 2022, national Republicans are eager to exploit lines of attack against the vulnerable incumbent.
The National Republican Campaign Committee (NRCC) has taken to calling Malinowski “Trading Tom,” even in contexts unrelated to his stock actions. Such efforts to cast Malinowski as a corrupt insider would certainly increase if the Ethics Committee found him guilty of wrongdoing.
And, of course, even a verdict in Malinowski’s favor might not stop Republican broadsides. Tuesday’s Ethics Committee release contained no implication of Malinowski’s guilt, but the NRCC nevertheless charged that Malinowski’s “corrupt behavior is finally catching up to him.”
Republicans lost two U.S. Senate seats in Georgia – and their Senate majority – earlier this year after stock trades by the mega rich incumbents became a central issue in their campaigns. Though the Senate Ethics Committee dismissed complaints that U.S. Sens. Kelly Loeffler and David Perdue had used confidential information in stock trades, it didn’t stop Democrat John Ossoff from repeatedly calling Perdue a “crook” anyways.
Malinowski has still experienced two strong fundraising quarters despite the cloud over his stock deals, and is well-positioned financially for 2022.
Will this have any impact on congressional redistricting?
Maybe, but it depends on the timing of the Ethics Committee’s ultimate verdict.
In the event that the Ethics Committee quickly returns with harshly negative findings against Malinowski, the redistricting commission – which is set to draw congressional maps this fall with a deadline of January 18, 2022 – may be less likely to protect Malinowski and maintain the 7th district’s current lines. Drawing a politically damaged Malinowski into a heavily Republican seat could ensure that other North Jersey seats, like the 5th and 11th, would grow more Democratic.
Conversely, if the Ethics Committee efficiently finds little or no wrongdoing on Malinowski’s part, then the commission would likely proceed as normal and treat Malinowski like any other incumbent.
But if the inquiry extends past redistricting deadlines with no clear resolution, then the potential impact is murkier. The 13 members of the redistricting commission will be acting with the same amount of information as everyone else, and if the Malinowski probe remains unresolved for months, deadlines would force them to draw districts without knowing Malinowski’s fate.
Probably the most important factor as it relates to redistricting is House Speaker Nancy Pelosi, who is defending a narrow five-seat majority going into next year’s midterm elections. Pelosi isn’t ready to give up on the 7th district as part of her majority math; she needs Malinowski more than New Jersey Democrats do.