Crooked Corker: Roger Stone Discusses Senator’s Decision Not to Run

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crooked corker

This post was originally published on Lew Rockwell.

Crooked Corker: Roger Stone Discusses Senator's Decision Not to Run

crooked corker

Lost in the coverage of the announcement by Senator Bob Corker that he would not run is the fact the senator has been under FBI investigation for corruption because of a series of business enterprises where it appears he used his public position for his personal gain.

In May 2016, the Wall Street Journal reported that the FBI and the SEC were investigating Bob Corker and CBL & Associates, a REIT based in Corker’s hometown of Chattanooga owned by Corker’s former employers turned major donors. According to the report, federal officials were examining CBL’s billing practices and Corker’s dozens of lucrative stock trades over a period of several years, collectively worth tens of millions of dollars. While they have not commented publicly on the case, federal investigators have looked into whether Corker’s trades may have been based on inside information.

Interest in Corker’s personal finances first emerged in late 2015, when the Journal reported on a series of contradictions and apparent omissions in Corker’s personal financial disclosures over the course of nearly a decade. Often, he failed to declare income that he appeared to derive. In other cases, he failed to indicate when he had acquired or sold certain assets. Ultimately, Corker filed amended disclosures with the Senate Ethics Committee, which revealed millions of dollars in previously undeclared assets.

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Some of the transactions in question involved CBL, but they were not the only firm with long ties to Corker where he appears to have hidden the degree of his involvement. Corker also invested in two Chattanooga hedge funds called Pointer Management and TSWII, which like CBL were founded by longtime donors and friends of Corker. As with CBL, there is concern—and at least some circumstantial evidence—that privileged information that Corker obtains as a Senator could be used to influence the funds’ investment positions.

Corker’s investments in Pointer were the subject of a recent Yahoo Finance article, which revealed that the fund had made tens of millions of dollars in profit, if not more, shorting the housing market in 2007. Corker was joined in his Pointer investment by fellow Senator Mark Warner. Beyond the unseemliness of Senators making exorbitant profits off of the collapse of the US financial system, the article also noted that Corker and Warner sought to radically reshape the housing finance market in a landmark bill they proposed in 2013. The Corker-Warner bill did not pass, but it has become a blueprint for subsequent proposals to eliminate Fannie Mae and Freddie Mac.

Corker’s controversial relationships with business leaders from his hometown include another key example: Henry Luken. Best known as a communications magnate, Luken acquired the lion’s share of Corker’s failing real estate empire from him in 2006, while Corker was running for Congress and just before the credit crunch sparked by the financial crisis. As a result of the sale of the highly leveraged assets, Corker not only avoided the subsequent calamity, but he was given the liquidity he urgently needed to fund his own campaign: He subsequently let himself approximately $4.2 million, which accounted for nearly a quarter of all his spending, in the weeks before his primary and his general election win, enough to secure him a narrow margin of victory against Democratic opponent Harold Ford. While one can only speculate about what might have been, it is not a stretch to say that without Luken’s bailout, Corker might not have won his race.

While in the Senate, Corker has pursued a series of agenda items that have advanced Luken’s business interests. He sent letters to the FCC urging regulatory changes that would protect the profits of Luken’s scores of low-power TV stations and broadcast networks. Corker co-sponsored multiple bills that would benefit Luken’s telecom businesses. Corker also spent years as mayor and senator encouraging Volkswagen to build a massive plant in Chattanooga, which inflated the value of several of Luken’s nearby properties.

After Luken took control of Corker’s struggling properties, he was initially unable to find a bank that would refinance their subprime mortgages, which had originally been taken out by Corker. When the loans on properties now owned by Luken were called in, he was only able to secure two six-month extensions, until Wells Fargo agreed to refinance more than $28 million of the debt in March 2010.

Wells Fargo’s lending agreement with Luken, which came at a time when other banks would not extend new financing because of the post-crisis credit crunch, was a huge boon to Corker and Luken alike. Thanks to the loan, Luken avoided insolvency. As the original borrower, Corker likely maintained a contingent liability on the properties, meaning inability to roll over the loans was a threat to his financial well-being as well.

This was not the only favorable treatment Corker has received from Wells Fargo, which he also oversees as a member of the Senate Banking Committee. Days after Corker sank between $2 and $10 million in a proposed Mobile, Alabama shopping center, the bank announced it would finance the project. Wells Fargo has long been the primary financier of CBL, and the firm’s owners credited the banks for allowing them to weather the financial crisis, which also allowed Corker to retain value in his multi-million-dollar investments. Corker invests hundreds of thousands, if not millions, of dollars in his campaign war chest with a fund owned by a former Wells executive named Aon Miller.

Corker’s unusual pattern of highly lucrative foreign stock trades has also raised eyebrows, and raises questions about whether he might be exploiting his work on the Senate Foreign Relations Committee. Corker made 92 trades (which were cumulatively worth up to $945,000) in the stocks of 29 foreign companies from January 2014 to April 2014. While some of these firms are well known, many would be anonymous to American investors, such as a French REIT called Unibail-Radamco and an Oslo chemical firm known as Yara International.

Corker’s hold time was extremely short in every case. He sold the stocks after an average of slightly more than three months, and held onto none for even five months. The trades were also extraordinarily profitable—nearly 80% were winners. Corker travelled to many of the countries where these companies are located, and as chair of Senate Foreign Relations Committee, he often received detailed breakdowns of their economic issues, include material non-public information that would be high interest for investors.

This willingness to use public office for his own personal benefit which has come the attention of federal investigators has been a theme of Corker’s career dating back to his first elected position, as mayor of Chattanooga from 2001 to 2006. Critics complained that he changed city zoning and environmental rules to boost the value of multiple properties he owed. Corker also appears to have directed city business to his friends; for instance, under his watch Pointer Management began to manage investments for city pension funds.

This post was originally published on Lew Rockwell.