The House Ethics Committee “found substantial evidence” that Rep. Mike Kelly (R-Pa.) violated the code of conduct for the lower chamber when his wife profited off stock trades for a company the congressman was focusing on in Washington.
The report — which spans 28 pages and has three packets of supporting documents — cleared Kelly of intentionally causing his wife to trade based on insider information and having a conflict of interest, determining there wasn’t evidence to prove those two wrongdoings.
But the panel found that Kelly, a member of the powerful Ways and Means Committee, breached the House’s code of conduct “by failing to meet his duty of candor.” The committee ordered he and his wife to divest their investments in Cleveland-Cliffs, the steel manufacturer at the center of the report.
“Representative Kelly’s conduct with respect to Cleveland-Cliffs and his wife’s stock purchase raised significant concerns for the Committee, even if it did not rise to the level of insider trading or clearly violate conflict of interest rules,” the committee wrote, later adding Kelly “has not demonstrated sufficient appreciation for the harm to the institution caused by the appearance of impropriety.”
The panel’s investigation focuses on a series of trades of Cleveland-Cliffs stock that Kelly’s wife, Victoria, made in the last five years. Cleveland-Cliffs in 2020 acquired AK Steel, which is the sole producer of grain oriented electrical steel (GOES) in the U.S. GOES is produced in Butler, Pa., a town in Kelly’s district.
In early 2020, Cleveland-Cliffs had said it may have to close the Butler location and lay off employees if the Trump administration did not implement Section 232 tariffs, which would protect the production of GOES in the U.S. Kelly took part in actions in Washington to address the matter.
On April 28 of that year, the Commerce Department told Cleveland-Cliffs — and Kelly learned — it would begin a Section 232 investigation for some GOES-based steel products, according to the report.
The next day, the panel learned, Victoria Kelly bought 5,000 shares of Cleveland-Cliffs stock for $23,075. The investigation was announced on May 4.
The committee said it was unable to determine if Victoria Kelly was made aware of the development before making the trade. But, the congressman was working from home at the time after testing positive for COVID-19 and told the committee “Mrs. Kelly would’ve heard any of my conversations,” adding that she “sits around for most of the time I’m on the phone,” according to the report.
The panel said it could definitely determine if she heard the conversation.
The Stop Trading on Congressional Knowledge (STOCK) Act, enacted in 2012, prohibits members and staff from engaging in insider trading using information learned in official capacities.
While Kelly was interviewed as part of the investigation, his wife “refused to participate in a voluntary interview or to respond to written questions from the Committee, citing her prior cooperation with document requests as well as health concerns,” according to the report. The Congressman also said his wife did not want to speak to the committee because she felt the process was “invasive.”
“The Committee did not receive full cooperation from Mrs. Kelly and was therefore unable to determine whether her stock purchase was improper,” the report reads.
The panel did, however, find that the investment in Cleveland-Cliffs “was an outlier” in her portfolio, noting that unlike other trades that were made at her firm’s discretion, that transaction “had to be instructed and confirmed directly by Mrs. Kelly in order for the transaction to be completed because it was not on PNC’s investment platform.” The move marked her first purchase of individual stock in a year, according to the report, and was different from the mainly funds and bonds on her account.
Kelly said he believed his wife made the transaction because “she thought the stock was so low priced, it’d be foolish not to… I know that she thought she made a hell of a buy.” In August 2020, however, Kelly’s office told a local news outlet inquiring about the purchase that it was made “to show her support for the workers and management of this 100-year old bedrock of their hometown, where they both are life-long residents.”
The second transaction examined by the committee was made in January 2021, shortly after Cleveland-Cliffs in December 2020 acquired a steel manufacturing corporation that caused its stock to skyrocket in value. Victoria Kelly that month sold all her shares in the company for $87,551.06, turning a $64,476.06 profit.
“None of the witnesses interviewed by OCC or the Committee, including Representative Kelly, provided an explanation for why Mrs. Kelly chose to sell her stock at that time. Representative Kelly told the Committee he did not speak with Mrs. Kelly about the sale at any point,” the report reads.
Then in June 2024, Kelly disclosed that his wife purchased between $50,000 and $100,000 in shares of Cleveland-Cliffs back in March, as the congressman’s office was involved in a matter involving the company and the Department of Energy. In March, the Energy Department made a decision on the matter that protected the facility in Butler.
As a result of the findings, the panel recommended that Kelly and his wife “divest all of Cleveland-Cliffs stock should he continue to take official actions relating to the company.”
“It is rare for the Committee to recommend divestment of stocks where there is a potential appearance of a conflict of interest. As Representative Kelly himself noted, however, he is an ‘insider’ when it comes to Cleveland-Cliffs, by virtue of his position as the representative for his district,” the report reads.
In a statement responding to the Ethics report, Kelly said: “This investigation has unnecessarily lasted for nearly five years.”
“In the years since this investigation began, the Cleveland Cliffs Butler Works plant faced an uncertain future due to the Biden administration’s reckless energy policies. Throughout this process, I have fought for the 1,400 workers at the plant, I’ve spoken with these workers, and they appreciate the hard work we have done to fight for those jobs and for Butler. My family and I look forward to putting this distraction behind us,” he added.
