Rep. Pat Fallon, a Republican from Texas, in a group photo with freshman members of the House Republican Conference on the House steps of the US Capitol on January 4, 2021.
Tom Williams/CQ-Roll Call, Inc via Getty Images
- Fallon has railed against “tech oligarchs” after they deplatformed GOP lawmakers.
- But he traded stock in companies like Facebook and Twitter.
- His office told Insider he’s in the process of moving his stock portfolio into a blind trust.
Freshman Republican Rep. Pat Fallon of Texas is on a Big Tech tear.
Like many Republicans, he complains that companies such as Twitter and Facebook are biased against conservatives because they’ve removed Republicans from their platforms. On conservative stations such as Newsmax, he has referred to tech companies as “Silicon Valley oligarchs” who are guilty of “suppressing and ultimately silencing conservative speech.”
—Rep. Pat Fallon (@RepPatFallon) February 7, 2022
But in recent weeks, Fallon has sought to profit from investments in Big Tech, according to an Insider analysis of his financial disclosures.
Fallon traded up to $150,000 worth of Twitter stock in January after already trading the stock several times over the course of 2021. In 2021, he traded up to $1.6 million worth of Facebook stock.
Fallon’s trades come amid a roiling debate on Capitol Hill as to whether lawmakers should be allowed to trade individual stocks at all.
Asked about the tech investments, the congressman’s office told Insider on Friday that Fallon was in the process of moving his portfolio into a qualified blind trust, which the Senate Select Committee on Ethics describes as “the most comprehensive approach” to “eliminate conflicts of interests and the appearance of them.”
“As a member of Congress, he does not plan to purchase individual stocks again,” said his spokesman, Austin Higginbotham.
Fallon’s office did not immediately respond to a question about how soon the process would be complete or whether the move was motivated by news reporting on his late disclosures. His application for the blind trust will have to be approved by the Clerk of the US House.
“Limiting member’s day-to-day involvement in the stock market will prevent any confusion or exploitation on otherwise benign investments,” Higginbotham said.
Fallon’s office did not answer questions about whether he thought his tech company investments clashed with his stated policy positions, instead pointing out that Fallon uses a broker to manage his current investments.
“Like most in the industry, he listens to advice, and hopes for the best,” Higginbotham said. “His broker executed a blue-chip purchase strategy and did so without political considerations. With that being said, in 2021 — a year which the S&P 500 grew over 25%, the congressman’s portfolio grew a mere 5%.”
Donald Sherman, vice president and chief legal counsel at Citizens for Responsibility and Ethics in Washington, said Fallon’s holdings appeared hypocritical.
“It certainly looks hypocritical for him to attack Facebook and Twitter while he is also invested in them,” he said. “It’s reasonable for his constituents to question any of these actions, to question whether his stated position on these companies is incongruous with his ownership in the company or if his ownership with the company is influencing his official actions.”
Fallon, who made his fortune in the apparel business, also has over the past year been months late disclosing dozens of stock trades during early- and mid-2021 that together are worth as much as $17.53 million. He was late again on his disclosures in December 2021.
Failing to file timely disclosures is a violation of the 2012 Stop Trading on Congressional Knowledge Act, which is intended to promote transparency and defend against financial conflicts.
Less than a dozen members of Congress have blind trusts
Ten members of Congress have established blind trusts, and they can be expensive and initially time-consuming to establish.
But a bipartisan group of lawmakers is pushing for a law that would require members to quit trading individual stocks and, in one scenario, place assets into a blind trust if they want to still participate in the stock market.
Insider’s “Conflicted Congress” investigation, published in December, found that 55 members of Congress and at least 182 senior aides had violated the STOCK Act with late disclosures. It also found members of Congress have held stock in companies that clash with their public responsibilities or stated orthodoxies, or sat on committees that directly oversee the activities of companies in which they hold shares.
Insider’s analysis also found at least 32 lawmakers in the House and Senate — including both Democrats and Republicans — whose families held investments in Facebook during 2020.
Yet bashing on “Big Tech” is a bipartisan pastime in Congress. Many Democrats have argued that social media platforms are saturated with misinformation and hate and don’t do enough to stop the promotion or incitement of violence.
Fallon does not sit on committees that directly regulate the tech industry. But he did cosponsor the No Social Media Accounts for Terrorists or State Sponsors of Terrorism Act last year. The bill was a dig at how certain social media sites had removed Republicans — including former President Donald Trump — from their platforms while failing to routinely regulate terrorist or militant content.
Members of Congress have tremendous power over tech giants, and their statements and decisions can affect stock share prices and lawmakers’ own portfolios, Sherman said.
Fallon’s trades provided a “textbook example of conflicts of interest,” that showed why members of Congress shouldn’t be trading individual stocks, he added.
“He may hold these [anti-Big Tech] views genuinely and believe he is representing the best interest of his constituents when he does so,” Sherman said. “But the fact that someone has to ask whether his financial interests have a bearing on his conduct is the problem.”