U.S. Sen. Rand Paul (R-KY) listens to Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, during a Senate Health, Education, Labor and Pensions Committee hearing to discuss the on-going federal response to COVID-19, at the U.S. Capitol in Washington, D.C., U.S., May 11, 2021.
Greg Nash | Reuters
WASHINGTON — Republican Sen. Rand Paul and his wife had not bought or sold stock in an individual company in at least 10 years when Kelley Paul purchased shares of the drug company Gilead Sciences in early 2020.
The purchase came early in the novel coronavirus’ initial wave through the United States — and one day after the first U.S. clinical trial began for Gilead’s remdesivir as a treatment for Covid-19, according to records reviewed by CNBC.
That purchase and its timing made headlines Wednesday when the Kentucky senator disclosed it for the first time in a mandatory Senate filing — more than 16 months after the legal deadline for reporting it had passed.
Rand Paul has been one of the leading opponents of Covid mask mandates and other preventative measures, calling for people to “resist” them. YouTube suspended his official account Tuesday over his claims that masks don’t prevent infections. Paul called the suspension a “badge of honor.”
The purchase of up to $15,000 worth of Gilead shares was made three weeks before the World Health Organization declared Covid a pandemic. On Feb. 26, 2020, the day Kelley Paul bought the shares, there were only 14 confirmed cases of Covid in the United States.
The 2012 STOCK Act requires members of Congress to disclose the purchase and sale of individual stocks, bonds and commodity futures within 45 days of the transaction.
Other assets — such as mutual funds, EIFs and T-bills — are exempt from the 45-day requirement and need to be disclosed only once a year. The different reporting schedules prioritize the disclosure of trades that could be used to profit from nonpublic information.
Since 2012, Paul has disclosed 187 transactions involving mutual funds, EIFs, trusts and government bonds in his annual reports. But he has disclosed only one transaction in an individual stock: Gilead.
Paul’s office said he filled out a disclosure form about the Gilead purchase on time in 2020, but through an oversight it was not transmitted to the Senate records office.
It is not out of the ordinary for a U.S. senator such as Paul or his spouse to buy stock in a publicly traded company like Gilead. But for Rand and Kelley Paul, Gilead is the first and only individual stock that the lawmaker has reported he or his wife buying or selling during his 10 years in the Senate.
Paul is a member of the Senate health committee, which received a private briefing in January 2020 on the threat of the coronavirus from Trump administration officials. A Paul spokesperson said the senator did not attend any Covid committee briefings.
A prominent Washington ethics lawyer, who declined to be named because his clients are both Republican and Democratic elected officials, told CNBC, “If the [Securities and Exchange Commission] were conducting an insider trading investigation of this transaction they would see the sudden purchase of individual stocks when the subject of the investigation had not purchased individual stocks before and had recently had access to market-moving information as a huge red flag.”
Last year, federal prosecutors investigated stock sales made in advance of a coronavirus-fueled market plunge by and connected to Sen. Richard Burr, R-N.C., Sen. Jim Inhofe, R-Okla., then-Sen. Kelly Loeffler, R-Ga., and Sen. Dianne Feinstein, D-Calif.
Those probes ended without charges being filed — but the investigations and details about the controversial trades were widely publicized at the time. Loeffler was defeated in a runoff election in January.
By not disclosing the purchase, Paul avoided becoming the subject of an investigation like the ones that targeted his fellow senators last year.
Paul’s disclosure Wednesday was first reported by The Washington Post. But the fact that the Gilead shares were the couple’s one and only stock buy in the last decade has not been reported until now.
A spokeswoman for Paul said the senator and his wife “lost money” on the Gilead stock.
While it’s true that the price of Gilead is lower now than when Kelley Paul bought the shares, she has not sold the Gilead stock yet, meaning she has not realized any losses or gains from it.
CNBC asked Paul’s spokeswoman, Kelsey Cooper, if the senator or his wife had bought or sold any stocks in the year since the Gilead purchase. She did not answer.
The price of Gilead stock has fluctuated since Kelley Paul bought shares at $74.70, climbing as high as $83.99 and falling as low as $56.56.
Gilead shares were trading at $70.65 late Thursday.
Exactly how many shares Kelley Paul owns is unclear. Senators are required to report the value of transactions by them or their spouses only within a range of dollar values. In this case, Kelley Paul bought between $1,001 and $15,000 worth of shares, Sen. Paul’s disclosure said.
Last month, Sen. Tommy Tuberville, R-Ala., disclosed stock and stock option trades valued at a total of between $894,000 and $3.5 million from January through May.
Like Paul, Tuberville made his disclosure after the expiration of the deadline set by the STOCK Act.
A Tuberville spokeswoman told CNBC last month that the senator had not even known about the individual stock and stock option trades and therefore also had not known they needed to be disclosed by the STOCK Act’s deadline.
She said Tuberville has financial advisors who handle his stock trading. She would not identify those managers when asked who they were.
Correction: This article has been updated to reflect the correct spelling of remdesivir.