ProPublica: David Perdue’s Home Sold “Off Market” to Brokerage Industry Official Whose Organization He Oversaw Raises “Serious Suspicions”

A FINRA official paid Perdue $1.8 million for his D.C. townhouse after the organization lobbied the Senate on a bill overseen by Senate Banking Committee

ATLANTA — A new ProPublica report revealed that Senator David Perdue sold his home in an off market deal to a finance industry official whose organization was lobbying the Senate at the time of the sale. Four local real estate experts said the price Perdue garnered for the home “seemed high” and a congressional ethics expert said Perdue’s private sale to someone whose organization he oversaw in the Senate “raises serious suspicions” as to whether the sale was above market value, which “would be a violation of his ethical obligations and an opportunity for those with business pending before Perdue’s committee to curry favor.”

Perdue has faced intense scrutiny for several “sordid financial abuses” as a host of corrupt stock trading scandals have plagued his campaign and a recent bombshell New York Times investigation revealed Perdue instructed his wealth manager to “sell a little more than $1 million worth” of stocks, despite Perdue insisting his stock trades were “handled by advisers who operated independently and without [his] input.”

“Georgians do not trust Senator Perdue to get things done for working people in Washington because he’s constantly working to enrich himself while in office,” said Braxton Brewington, spokesman for the Democratic Party of Georgia. “Whether it’s trading stocks in industries he oversaw or making off-market real estate deals, his clear priority is to line his own pockets, not fight for Georgia families.”

ProPublica: Sen. David Perdue Sold His Home to a Finance Industry Official Whose Organization Was Lobbying the Senate

• “Sen. David Perdue, R-Ga., sold his Washington, D.C., home last year to a brokerage industry official whose organization is under the purview of a committee Perdue sits on. The deal was made off market, without the home being listed for sale publicly.”

• “Though an appraisal provided to ProPublica by the buyer found that Perdue sold for slightly under market value, four local real estate experts disagreed, telling ProPublica that the almost $1.8 million sale price Perdue garnered seemed high. Their estimates of the premium ranged from a few thousand dollars to as much as about $140,000.”

• “Ultimately, congressional ethics experts said, their concern was that Perdue sold privately and to someone whose organization that he oversaw as a senator.”

• ““Determining fair market value is always a gray area, unless the sales are done in a competitive open market,” said Craig Holman with the watchdog group Public Citizen. “Since the purchase and sale of this property by Sen. Perdue was not done on the open market, it raises serious suspicions as to whether the sale was in fact at fair market value.””

• “If the price was above fair market value, Holman said, “this would be a violation of his ethical obligations and an opportunity for those with business pending before Perdue’s committee to curry favor.””

• “Perdue has faced multiple allegations that he has mixed his private financial interests with his official work. The most prolific stock trader in the Senate, he bought and sold shares in companies that the committees he sits on have jurisdiction over. Some of his trades came at fortunate times. Earlier this year, the Justice Department investigated him and other lawmakers for possible insider trading. Perdue denied the allegations. Prosecutors ultimately decided not to bring charges against him.”

• “Perdue’s home buyer in October 2019 was Hillary Sale, a board governor for the Financial Industry Regulatory Authority, a privately funded self-regulatory body for the securities industry. The organization falls under the purview of the Senate Banking Committee, which Perdue sits on. Earlier in 2019, FINRA was lobbying on a bill out of the banking committee that would have required the organization to establish a fund to pay investors bilked by brokers.”

• “Perdue may have saved thousands by not putting his house on the open market. Kuraishi and other experts said that when doing off-market deals, sellers can negotiate to pay their agents a smaller commission.”

• ““In that scenario, an agent spends less on staging, less on marketing, less on open houses, less on virtual tours,” he said. “It’s typically an easier sale.””

• “At the time of the sale, FINRA was lobbying the Senate, according to its disclosure forms, and earlier that year its lobbyists were specifically focused on a bill that would have required the organization to establish a relief fund to provide investors with arbitration awards that went unpaid by FINRA’s brokerage firms and brokers. The bill was authored by Sen. Elizabeth Warren, D-Mass., and fell under the jurisdiction of the Senate Banking Committee.”

• “The committee had also held hearings that included harsh assessments of how well FINRA was policing its own. In 2018, an AFL-CIO official charged that FINRA was failing as a regulator because it was not forcing its members to pay the arbitration settlements.”

• “Perdue’s office declined to answer questions about where the senator stood on the bill, which did not pass, or whether he took any actions on it. Ethics experts are generally troubled when politicians enter into transactions with people who have business before them. The legality of this sale hinges on whether the home was purchased at fair market value. If it was purchased for more than that, it would be considered a gift. Gifts of significant value to senators are required to be publicly disclosed. Perdue did not disclose any such gifts.”

• “In order to avoid the appearance of a conflict, members of Congress who are buying or selling properties should do so on the open market to help ensure the price paid is fair and to avoid deals with people who have business before them, ethics experts say.”

• “One agent, assuming Perdue did not make significant improvements to the property while living there, priced the home at around $1,650,000. That would mean Perdue sold for about 8% over market.”

• “A second agent said the price also seemed high, but only about 2% over market value. The agent said prominent officials selling homes in private deals will often get a premium. “Buyers don’t haggle at that point. If it’s a senator, you’re not going to go back and say, ‘Actually, I’ll give you 1.7.’ They either pay the price or don’t buy it.””

• “A third agent said it seemed slightly above market. A fourth said the expected range for that property at the time would have been between $1.75 million and $1.785 million, a shade under Perdue’s $1.789 million sale price.” 

• “The agents said that the price Perdue purchased the home for in 2015, $1.6 million, was about market rate at the time. That sale was made on the open market. In that case, Perdue bought from Bill Cheney, the outgoing president of the trade group lobbying for credit unions; Cheney is currently president of a California-based credit union. Perdue has received donations from the trade group and, as a senator, has helped loosen regulations on credit unions.”

• “One of the real estate agents who spoke with ProPublica noted the short time the home spent on the market before Perdue bought it. The home was put on the market on a Wednesday and Perdue agreed to a deal to buy it that Friday before there could be a weekend open house. The agent said it was atypical for a seller to commit to Perdue without holding an open house to find backup options.”

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