Rep. Mike Kelly found to have violated code of conduct through spouse’s stock trades

An ethics panel recently determined that Rep. Mike Kelly (R-Pa.) had violated the House’s code of conduct by allowing his wife to profit from stock trades related to a company he was involved with in Washington. The committee’s report, spanning 28 pages with supporting documents, found that while Kelly was not involved in insider trading or conflicted interests, he failed to fulfill his duty of candor.

Kelly, a member of the influential Ways and Means Committee, was ordered to divest his and his wife’s investments in Cleveland-Cliffs, the steel manufacturer central to the investigation. The panel expressed concerns about Kelly’s conduct, emphasizing the importance of avoiding even the appearance of impropriety within the institution.

The investigation focused on a series of trades made by Kelly’s wife, Victoria Kelly, in Cleveland-Cliffs stock over the last five years. The company had acquired AK Steel in 2020, a move impacting the production of grain-oriented electrical steel (GOES) in Mike Kelly’s district in Butler, Pa. Kelly had taken actions in Washington related to protecting GOES production.

In one instance, on April 28, 2020, after the Commerce Department announced an investigation into GOES-based steel products, Victoria Kelly purchased 5,000 shares of Cleveland-Cliffs stock the next day. The report noted that the congressman was home due to a positive COVID-19 test, stating that his wife would possibly have heard relevant conversations.

Despite requesting Victoria Kelly’s cooperation in the investigation, she declined to participate in interviews, citing health concerns. The panel found her investment in Cleveland-Cliffs to be unusual in her portfolio, highlighting the transaction’s unique characteristics compared to her other trades.

Kelly defended his wife’s actions, claiming she thought the purchase was a good deal. However, in a subsequent sale in January 2021, Victoria Kelly sold all her Cleveland-Cliffs shares, making a considerable profit. The committee noted a lack of explanation for this sale from witnesses, including Representative Kelly.

Following these findings, the panel recommended that Kelly divest his and his wife’s Cleveland-Cliffs stock to avoid potential conflicts of interest. In response to the ethics report, Kelly expressed frustration with the lengthy investigation and reiterated his efforts to support local workers at the Cleveland Cliffs Butler Works plant.

In conclusion, the House Ethics Committee’s investigation into Rep. Mike Kelly’s involvement in his wife’s stock trades revealed breaches of the House’s code of conduct. Despite not engaging in insider trading or conflicted interests, Kelly was found to have failed in his duty of candor, garnering recommendations for divestment from the panel. Kelly has expressed a desire to move past the distraction of the investigation and continue advocating for the workers and community of Butler, Pa.