How Elected Officials Invest, and Where to Find Their Portfolio Holdings
How three U.S. lawmakers invest wealth
Wealth-related references to the 1 percent and the 47 percent and talk of personal money being stashed in the Cayman Islands or other places offshore have driven the political discourse of late as Americans prepare to elect a president and Congress in four weeks.
The always-thorough Center for Responsive Politics database offers self-disclosed investments and the portfolios of congressional officeholders, so we thought we’d look at three of the men representing Pennsylvania, as another Election Day nears.
Why? Because it is interesting to see the investment choices of people whom we know much about anyway, and because we can.
• U.S. Sen. Pat Toomey, a Republican, who resides in Lehigh County.
• U.S. Sen. Bob Casey, a Democrat from Scranton.
• U.S. Rep. George Joseph “Mike” Kelly, a Republican, who represents the Third District, which includes Erie and Sharon in the northwest corner of the state.
The three offer political and geographical diversity, but other than that, this is again simply an arbitrary grouping, the same thing we did a year ago at this time. We also offer a link (www.opensecrets.org) that displays the records for all elected officials from Pennsylvania.
There are no secrets – all filings are public – and many in Congress are people of exceptional means. All members of Congress receive a salary.
Politicians are no longer exempt from insider-trading rules, thanks to legislation passed after much controversy. Politicians routinely have access to nonpublic information that, before passage of the STOCK (Stop Trading On Congressional Knowledge) Act, they could legally use to guide their trading on the stock market.
So read on:
He sat on the bipartisan “super committee,” which failed in its task of agreeing on a plan to cut the U.S. budget deficit. Because of Congress’ inaction, the United States still faces a so-called fiscal cliff come January, when automatic budget cuts kick in and other taxes begin to take effect.
Toomey is among the wealthier members of the Pennsylvania delegation. He disclosed a net worth of between $1,750,070 and $4,750,999 in 2010. That has fallen slightly to a net worth of between $1,666,000 and $4,365,000 in 2011.
Whoever oversees Toomey’s investments traded heavily in 2011, trading in and out of various iShares index funds, out of emerging markets and into precious metals. Among the larger public holdings is a U.S. Treasury Inflation Index fund, with a value between $50,000 and $100,000. This is a bond fund that provides an inflation-adjusted return.
Toomey’s private holdings included an airplane-leasing company and an undeveloped real estate deal called Old Mill Partners and stock in Team Capital Bank, of Bethlehem, Pa. (Both are worth between $500,001 and $1,000,000).
In 2011, Toomey invested between $100,000 and $250,000 in a real-estate fund called BPG Properties Fund Ltd., which has offices in Center City. He also owns nonpublic investments in Old Florida Bankshares Inc., Madison Bank of New York, and Revere Bank, of Laurel, Md.
Toomey and his family also invested in Guggenheim S&P 500 Equal Weight ETF, the Rydex S&P Equal Weight ETF, SPDR S&P Oil & Gas ETF, and iShares Silver Trust.
He listed pensions, bank accounts, and investments valued at a maximum of $580,000 as of 2011, compared with a maximum $563,000 as of his 2010 filings. Casey’s portfolio in 2011 earned roughly $13,000 in interest and dividends, and his most valuable individual asset was his Pennsylvania State Employees Retirement System pension, valued at between $50,001 and $100,000.
Casey appears to have moved a good portion of assets last year into college savings funds. His largest public holdings were three Fidelity Investments College Investing Plan funds (known as a 529s), two with $15,000-$50,000, and one with $50,000-$100,000 in assets. In 2011, he sold a Wells Fargo municipal-bond mutual fund.
Investments as of the latest filing also included First Energy stock, an Ameriprise Insured Money Market fund, the Fidelity Blue Chip Growth Fund, and the Janus Flexible Bond Fund Class A. None of these investments was greater than $50,000.
Joseph “Mike” Kelly
Kelly in 2010 listed a salary from Kelly Chevrolet Cadillac in Butler, Pa., of $146,600, as well as income from various energy partnerships. He did extremely well investing in energy, particularly in the Marcellus Shale. As a result, Kelly has been listed as one of the 50 wealthiest members of Congress, according to Roll Call.
His maximum net worth was estimated at $61.3 million, according to 2010 records, the latest available on OpenSecrets.org. That made him the 12th-wealthiest member of the House in 2010.
The reason? Exxon Mobil Corp. bought privately held natural-gas company Phillips Resources Inc. and a related company, TWP Inc., for $1.69 billion in June 2011. The acquisitions included about 317,000 acres for exploration in the Marcellus region. Kelly’s latest disclosure lists him as a major shareholder in both Phillips and in a series of PC Exploration Limited partnerships, in Warrendale, Pa.
In his latest 2011 filing, Kelly’s ownership in Phillips Resources Inc. ($5,100,002 to $25,250,000 worth) meant dividend income alone of $100,000-$1,000,000 annually. In 2009, his Phillips and TWP holdings were worth $1 million and $5 million, respectively, so the purchase by Exxon was enormously lucrative for Kelly.
His and his wife’s investments as of December 2011, the latest data in the filings, totaled $31 million in portfolios managed by PNC Financial Services, arrayed among municipal bonds; equities, including ETFs sponsored by Vanguard and other firms; and about $500,000 in alternative investments such as the Pimco Commodity Real Return fund. The portfolio generated investment income of more than $76,000.
View the 2011 financial disclosure forms for U.S. Rep. George Joseph “Mike” Kelly, U.S. Sens. Pat Toomey and Bob Casey and any other elected official at OpenSecrets.org