Senate Armed Services Committee Chairman Jim Inhofe (R-OK) has instructed his financial adviser to no longer purchase any defense stocks after news broke that he bought shares in Raytheon following a meeting with President Trump that led to a newly proposed boost in defense spending.
Leacy Burke, Inhofe's spokeswoman, said all the chairman's financial transactions are handled by a third-party adviser and that he had no knowledge of the purchase.
"The senator has had no involvement in and has not been consulted about his stock transactions," she said. "As such, the senator was not aware of this stock purchase until it came through the system very early [Wednesday] morning."
Senate financial disclosure forms, as first reported by The Daily Beast, indicate Inhofe on Tuesday bought between $50,001 and $100,000 in Raytheon stock. The purchase comes after a discussion with Inhofe and House Armed Services Committee Chairman Mac Thornberry (R-TX) that, according to multiple sources, led Trump to approve a fiscal year 2020 defense request of $750 billion, rather than the $700 billion he had previously considered.
Burke said Inhofe ordered his financial adviser to reverse the transaction.
"This means that the transaction was canceled before it was settled; the senator never took ownership of it," she said. "Accordingly, the senator's transaction report was amended and the stock purchase was removed."
In a Dec. 12 letter sent to his financial adviser Keith Goddard of Capital Advisors Inc. in Tulsa, OK, Inhofe makes clear he cannot own any defense stocks.
"Because of my new position as chairman of the Senate Armed Services Committee, it is important for me not to own or trade any defense or aerospace companies," Inhofe writes. "Therefore, I instruct you to no longer purchase defense or aerospace companies as part of my financial holdings."
According to the The Daily Beast, metadata in the document shows it was created less than 20 minutes after the news organization reached out for comment. Inhofe staffers speaking on background told Inside Defense they took action as soon as the issue was raised by The Daily Beast.
Meanwhile, the Project on Government Oversight said the story raises "disturbing questions about whether the activities of the Senate Armed Services Committee are being used for the personal profits of the chair himself."
Mandy Smithberger, director of the Center for Defense Information at POGO, said in a statement that Inhofe took an "important step" by telling his financial adviser to no longer purchase defense stocks for him, "but he needs to go farther."
Smithberger and POGO have advocated that the Senate Armed Services Committee's debate on the defense authorization bill, which, unlike its House counterpart, is traditionally held in secret, be open to the public.
"The public is already appropriately concerned about self-dealing in Washington," Smithberger said. "As Senator Inhofe proposes astronomical increases to the Pentagon budget, the committee’s actions should be open."
While Inhofe has not yet made any announcements about the coming defense authorization bill process, his office told Inside Defense that he did file a letter with the Senate's Office of Public Records at the request of the Senate Ethics Committee to provide a full accounting of the situation.
"The senator did not know about this and as soon as he did know about it, he stopped it and made sure it would never happen again," said an Inhofe staffer.