H. Rpt. 119-218 addresses "In the Matter of Allegations Relating to Representative Mike Kelly". It was prepared by the Ethics Committee as part of the committee's legislative and oversight work. Committee reports are among the most important primary sources in the legislative process. They explain what legislation does, why the committee believes it is necessary, what amendments were adopted, how much it costs, and what the committee's majority and minority members think. Courts and agencies refer to these reports for decades after enactment when interpreting how laws should be applied.
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House Report 119-218 - IN THE MATTER OF ALLEGATIONS RELATING TO REPRESENTATIVE MIKE KELLY
[House Report 119-218]
[From the U.S. Government Publishing Office]
House Calendar No. 40
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-218
_______________________________________________________________________
IN THE MATTER OF ALLEGATIONS
RELATING TO REPRESENTATIVE
MIKE KELLY
----------
R E P O R T
of the
COMMITTEE ON ETHICS
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
July 29, 2025.--Referred to the House Calendar and ordered
to be printed
IN THE MATTER OF ALLEGATIONS RELATING TO REPRESENTATIVE MIKE KELLY
House Calendar No. 40
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-278
_______________________________________________________________________
IN THE MATTER OF ALLEGATIONS
RELATING TO REPRESENTATIVE
MIKE KELLY
__________
R E P O R T
of the
COMMITTEE ON ETHICS
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
July 29, 2025.--Referred to the House Calendar and ordered
to be printed
------
U.S. GOVERNMENT PUBLISHING OFFICE
61-278 WASHINGTON : 2025
COMMITTEE ON ETHICS
MICHAEL GUEST, Mississippi, MARK DeSAULNIER, California,
Chairman Ranking Member
JOHN H. RUTHERFORD, Florida DEBORAH K. ROSS, North Carolina
ANDREW R. GARBARINO, New York GLENN F. IVEY, Maryland
ASHLEY HINSON, Iowa SYLVIA R. GARCIA, Texas
NATHANIEL MORAN, Texas SUHAS SUBRAMANYAM, Virginia
REPORT STAFF
Thomas A. Rust, Chief Counsel/Staff Director
Brittney Pescatore, Director of Investigations
Jordan Downs, Chief of Staff to the Chairman
David Arrojo, Counsel to the Ranking Member
Sydney R. Bellwoar, Senior Counsel
Christine E. Gwinn, Counsel
Peyton Wilmer, Investigative Clerk
LETTER OF TRANSMITTAL
----------
House of Representatives,
Committee on Ethics,
Washington, DC, July 29, 2025.
Hon. Kevin McCumber,
Clerk, House of Representatives,
Washington, DC.
Dear Mr. McCumber: Pursuant to clauses 3(a)(2) and 3(b) of
Rule XI of the Rules of the House of Representatives, we
herewith transmit the attached report, ``In the Matter of
Allegations Relating to Representative Mike Kelly.''
Sincerely,
Michael Guest,
Chairman.
Mark DeSaulnier,
Ranking Member.
C O N T E N T S
----------
Page
I. INTRODUCTION.....................................................1
II. PROCEDURAL HISTORY...............................................2
III. RELEVANT LAWS, RULES, AND OTHER APPLICABLE STANDARDS OF CONDUCT..3
IV. FACTUAL BACKGROUND...............................................6
A. Representative Kelly's Support for Section 232
Tariffs for GOES Products.......................... 6
B. Department of Commerce Announcement of Section 232
Investigation...................................... 8
C. Mrs. Kelly's Cleveland-Cliffs Stock Transactions and
Related Media Inquiries............................ 10
V. FINDINGS........................................................15
A. The Committee did not Find Substantial Evidence That
Representative Kelly Violated Laws, Rules, or Other
Standards of Conduct Relating to Insider Trading
and Conflicts of Interest.......................... 15
B. The Committee Found Substantial Evidence That
Representative Kelly Violated the Code of Official
Conduct............................................ 21
VI. CONCLUSION......................................................23
VII. STATEMENT UNDER HOUSE RULE XIII CLAUSE 3(C).....................23
APPENDIX A: REPORT AND FINDINGS OF THE OFFICE OF CONGRESSIONAL
CONDUCT........................................................ 24
APPENDIX B: REPRESENTATIVE KELLY'S SUBMISSIONS TO THE COMMITTEE.. 430
APPENDIX C: EXHIBITS TO THE COMMITTEE REPORT..................... 442
House Calendar No. 40
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-218
=======================================================================
IN THE MATTER OF ALLEGATIONS RELATING TO
REPRESENTATIVE MIKE KELLY
--------------
July 29, 2025.--Referred to the House Calendar and ordered to be
printed
--------------
Mr. Guest, from the Committee on Ethics,
submitted the following
R E P O R T
In accordance with House rule XI, clauses 3(a)(2) and 3(b),
the Committee on Ethics (Committee) hereby submits the
following Report to the House of Representatives:
I. INTRODUCTION
On July 23, 2021, the Office of Congressional Conduct
(OCC), then known as the Office of Congressional Ethics,
transmitted a Report and Findings (Referral) regarding
allegations that Representative Mike Kelly's wife, Victoria
Kelly, may have purchased stock based on confidential or
material nonpublic information that Representative Kelly had
learned during his official job duties. OCC found there was
substantial reason to believe Mrs. Kelly's stock purchase was
made based on confidential information that Representative
Kelly learned from his official work.\1\ However, citing the
lack of cooperation from Representative Kelly, his wife, and
his then-chief of staff, OCC noted that it ``cannot
definitively say what Representative Kelly and his wife knew
about these developments and when they knew them.''\2\
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\1\Report and Findings from the Office of Congressional Conduct
(Review No. 21-9221) (Appendix A) at 3 (hereinafter OCC Referral).
\2\Id. at 19.
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The Committee reviewed the allegations referred by OCC
pursuant to Committee Rule 18(a). Representative Kelly
cooperated with the Committee's investigation and the Committee
did not find evidence that he knowingly or intentionally caused
his spouse to trade based on insider information. The Committee
did not receive full cooperation from Mrs. Kelly and was
therefore unable to determine whether her stock purchase was
improper. The Committee also considered whether Representative
Kelly violated conflict of interest standards and did not find
a clear violation. Members nonetheless have a duty to protect
the integrity of the institution, which requires them to be
sensitive to even the appearance of impropriety. The Committee
is particularly concerned with Representative Kelly's actions
during the Committee's investigation--most notably the fact
that his wife made an additional purchase of stock in the same
company during the pendency of the investigation,
Representative Kelly did not timely disclose that purchase, and
he failed to respond to Committee questions regarding the
purchase. As discussed further below, the Committee determined
that Representative Kelly (and his wife) should divest of any
stock in the company before Representative Kelly takes any
further official actions directly related to that company.
Additionally, the Committee found that Representative Kelly's
failure to acknowledge the seriousness of the alleged
misconduct and the Committee's investigation violated clause 1
of the Code of Official Conduct.
Accordingly, on July 22, 2025, the Committee unanimously
voted to issue this Report, which will serve as a reproval of
Representative Kelly's conduct.
II. PROCEDURAL HISTORY
OCC undertook a preliminary review of this matter on March
9, 2021. On April 7, 2021, OCC initiated a second-phase review
of this matter. The Committee received the OCC Referral on July
23, 2021.\3\ Representative Kelly submitted a written response
to the OCC Referral through his attorney on August 26, 2021. On
September 7, 2021, the then-Chairman and Ranking Member of the
Committee issued a statement announcing that they had jointly
decided to extend the Committee's consideration of the OCC
Referral regarding Representative Kelly for an additional 45-
day period. On October 21, 2021, pursuant to House and
Committee rules, the Committee publicly released the OCC
Referral, along with a copy of Representative Kelly's written
response.
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\3\OCC referred allegations that ``Rep. Kelly's wife may have
purchased Cleveland-Cliffs stock based upon confidential information
Rep. Kelly learned in the course of his official duties'' in violation
of the Code of Ethics of Government Service and House Rules.
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The Committee reviewed materials provided by OCC, including
its Report and Findings, along with other documentary and
testimonial evidence obtained by OCC. In addition, the
Committee's then-Chairman and Ranking Member requested
information from Representative Kelly and Mrs. Kelly, both of
whom voluntarily provided documents to the Committee.
In total, Committee staff reviewed over 25,000 pages of
documents, including Representative Kelly's submissions and the
other documents described above.\4\ The Committee also
interviewed 5 individuals, including Representative Kelly. Mrs.
Kelly 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. After Representative Kelly reported an additional
purchase of stock in the same company by his wife, the
Committee sought additional information from both
Representative Kelly and Mrs. Kelly, but neither cooperated
with that request.
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\4\Representative Kelly and Mrs. Kelly were significantly delayed
in making their productions to the Committee, and the records they did
provide were largely nonresponsive.
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On June 17, 2025, the Committee notified Representative
Kelly that it was considering the adoption of a public report
that would serve as a reproval of him regarding this matter.
Consistent with the Committee's longstanding practice when
considering a sanction vote, Representative Kelly was provided
with a draft of the report under consideration. In response, he
reiterated the significance of the company's plant both to the
employees in his district and to the United States' national
security; he also stated that Mrs. Kelly's purchase of the
stock was ``to show her support for the workers and
management'' of the plant.\5\
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\5\Letter from Representative Mike Kelly to Chairman Michael Guest
and Ranking Member Mark DeSaulnier, Committee on Ethics (July 7, 2025)
(Appendix B).
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On July 22, 2025, the Committee unanimously voted to adopt
this Report with respect to Representative Kelly.
III. RELEVANT LAWS, RULES, AND OTHER APPLICABLE
STANDARDS OF CONDUCT
Federal laws apply to the trading of securities by Members.
The Stop Trading on Congressional Knowledge Act of 2012 (STOCK
Act) affirms that Members and employees are subject to the
insider trading prohibitions under the securities laws,
including Section 10(b) of the Securities Exchange Act of 1934
and 17 C.F.R. Sec. 240.10b-5.\6\ This prohibition applies to
information learned in both an official capacity and a personal
capacity.\7\
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\6\15 U.S.C. Sec. 78j note.
\7\Comm. on Ethics, Reminder of STOCK Act Requirements, Prohibition
Against Insider Trading & New Certification Requirement (June 11, 2020)
(hereinafter 2020 Pink Sheet), https://
ethics.house.gov/wp-content/uploads/2020/04/STOCK-Act-6.11.2020-
Final.pdf. See also Comm. on Ethics, New Ethics Requirements Resulting
from the STOCK Act (April 4, 2012) (hereinafter 2012 Pink Sheet),
https://ethics.house.gov/wp-content/uploads/2012/04/Stock-Act-Pink-
Sheet.pdf; Comm. on Ethics, Rules Regarding Personal Financial
Transactions (Nov. 29, 2011) (hereinafter 2011 Pink Sheet), https://
ethics.house.gov/wp-content/uploads/2011/11/fin-trans-pink-sheet.pdf.
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Section 4 of the STOCK Act makes clear that Members owe a
duty arising from a relationship of trust and confidence to the
Congress, the United States Government, and the citizens of the
United States, with respect to material, nonpublic information
derived from their position as a Member of Congress.\8\
Material nonpublic information includes any information related
to a company ``that would have been viewed by the reasonable
investor as having significantly altered the `total mix' of
information made available.''\9\ Securities laws prohibit
``undisclosed trading on inside corporate information by
individuals who are under a duty of trust and confidence that
prohibits them from secretly using such information for their
personal advantage.''\10\ Accordingly, if a Member chooses to
trade on material nonpublic information, then the Member may
have engaged in insider trading.
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\8\STOCK Act Sec. 21A(g) (1934) (as amended).
\9\TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438 (1976). See
also U.S. v. Bachynsky, 415 F. App'x 167 (11th Cir. 2011) (``[A] fact
is material if there is a substantial likelihood a reasonable investor
would consider it important in making an investment decision.'').
\10\Salman v. United States, 137 S. Ct. 420, 423 (2016).
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The prohibition on insider trading extends to the
``tipping'' of inside information to others.\11\ Tipping is
passing along inside information in violation of a duty of
confidentiality. A tip occurs when an insider (the ``tipper'')
discloses inside information to another person, who knows or
should have known that the tipper was breaching a duty by
disclosing the information and the tipper intended to
personally benefit by providing the information.\12\ This
includes both direct and indirect personal benefit, ``such as a
pecuniary gain or a reputational benefit that will translate
into future earnings,'' or ``a gift of confidential information
to a trading relative or friend.''\13\ This is because ``giving
a gift of trading information is the same thing as trading by
the tipper followed by a gift of the proceeds.''\14\ A
factfinder in an insider trading case ``need only infer the
most likely source of'' the trader's belief that ``the price of
a stock is going up . . . .''\15\ If a Member chooses to
disclose material nonpublic information to another person, then
the Member may incur liability for insider trading through
tipping.
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\11\Id.
\12\2011 Pink Sheets; see also Salman, 137 S. Ct. at 423.
\13\Salman, 137 S. Ct. at 427 (quoting Dirks v. SEC, 463 U.S. 646,
663-64 (1983)) (internal quotations omitted).
\14\Id. at 428.
\15\S.E.C. v. Ginsburg, 362 F.3d 1292, 1298-99 (11th Cir. 2004)
(``The temporal proximity of a phone conversation between the trader
and one with insider knowledge provides a reasonable basis for
inferring that the basis of the trader's belief was the inside
information. The larger and more profitable the trades, and the closer
in time the trader's exposure to the insider, the stronger the
inference that the trader was acting on the basis of inside
information.'').
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In general, ``ethics principles prohibit a Member from
using his or her congressional position for personal
gain.''\16\ House rule XXIII, clause 3, states that ``a Member
. . . may not receive compensation and may not permit
compensation to accrue to the beneficial interest of such
individual from any source, the receipt of which would occur by
virtue of influence improperly exerted from the position of
such individual in Congress.'' The Code of Ethics for
Government Service (Code of Ethics) states that ``[a]ny person
in Government should . . . [n]ever use any information coming
to him confidentially in the performance of governmental duties
as a means for making private profit.''\17\
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\16\House Ethics Manual (2022) at 196-98 (hereinafter Ethics
Manual).
\17\Code of Ethics para. 8.
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Section 5 of the Code of Ethics states that ``[a]ny person
in Government services should . . . never accept for himself or
his family, favors or benefits under circumstances which might
be construed by reasonable persons as influencing the
performance of his governmental duties.'' Accordingly, a quid
pro quo is not necessary to establish a violation of Section 5:
``the Committee has consistently prohibited acting on matters
in which a Member has a financial interest precisely because
the public would construe such action as self-dealing, whether
the Member engaged in the action for that reason or not.''\18\
Thus, ``[t]he only question is whether `reasonable persons''
`might construe' [a Member's interest] as influencing the
performance of his government duties'' or whether ``the public
might, and reasonably could, view [the official action] as
motivated by his substantial [financial interest].''\19\
Section 5 of the Code of Ethics also prohibits a government
official from ``discriminat[ing] unfairly by the dispensing of
special favors or privileges to anyone, whether for
remuneration or not[.]''\20\
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\18\Comm. on Ethics, In the Matter of Allegations Relating to
Representative Roger Williams, H. Rept. 115-271, 115th Cong., 1st Sess.
3 (2017) (hereinafter Williams); Comm. on Ethics, In the Matter of
Allegations Relating to Representative Phil Gingrey, H. Rept. 113-664,
113th Cong., 2d Sess. 18 (2014) (hereinafter Gingrey). See also Comm.
on Ethics, In the Matter of Allegations Relating to Representative
Shelley Berkley, H. Rept. 112-716, 112th Cong., 2d Sess. 55 (2012)
(hereinafter Berkley).
\19\Williams at 3 (citing Gingrey at 20-21).
\20\Id.
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The Ethics Manual explains that a ``purpose of these rules
and standards is to preclude conflicts of interest,'' referring
to situations ``in which an official's conduct of his office
conflicts with his private economic affairs.''\21\ The Ethics
Manual also notes that the Committee ``routinely advises
Members and staff to avoid situations in which even an
inference might be drawn suggesting improper conduct'' that may
``undermine the public's faith in government.''\22\ The Ethics
Manual further notes that certain Member actions such as
sponsoring legislation or contacting an executive branch agency
``entail a degree of advocacy above and beyond that involved in
voting[.]''\23\ Thus, a ``Member's decision on whether to take
any such action on a matter that may affect his or her personal
financial interest requires added circumspection.''\24\ Members
considering taking official action other than voting on a
matter affecting their financial interests are advised to
``first contact the [Ethics] Committee for guidance.''\25\
---------------------------------------------------------------------------
\21\Ethics Manual at 221.
\22\Id. at 196; Code of Ethics para. 8.
\23\Ethics Manual at 246; see also Williams at 3.
\24\Ethics Manual at 246.
\25\Id.
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Clauses 1 and 2 of the Code of Official Conduct (House rule
XXIII) provide that a Member ``shall behave at all times in a
manner that shall reflect creditably on the House,'' and
``shall adhere to the spirit and the letter of the Rules of the
House.'' In enforcing clause 1, the Committee has noted that
``[c]lause 1 is a purposely subjective standard designed to
`have a deterrent effect against improper conduct,' and to
provide `the ability to deal with any given act or accumulation
of acts which, in the judgment of the [C]ommittee, are severe
enough to reflect discredit on the Congress.''\26\ The
provision serves ``as a safeguard for the House as a
whole.''\27\
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\26\Comm. on Ethics, In the Matter of Allegations Relating to
Representative Matt Gaetz, H. Rept. 116-479, 116th Cong., 2d Sess. 17
(2020) (hereinafter Gaetz) (quoting House Ethics Manual (2008) at 13
(citing 114 Cong. Rec. 8778 (Apr. 3, 1968)).
\27\Comm. on Standards of Official Conduct, Inquiry into the
Operation of the Bank of the Sergeant-At-Arms of the House of
Representatives, H. Rept. 102-452, 102d Cong., 2d Sess. 22 (1992)
(hereinafter Sergeant-At-Arms) (citing Comm. on Standards of Official
Conduct, H. Rept. 90-1176, 90th Cong., 2d Sess. 17 (1968)).
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The Committee has also noted that the standards of conduct
governing the ethical behavior of the House community are not
criminal statutes to be construed strictly, but rather--under
clause 2 of House rule XXIII--must be read to prohibit
violations not only of the letter of the rules, but of the
spirit of the rules. The standard ``provide[s] the House the
means to deal with infractions that rise to trouble it without
burdening it with defining specific charges that would be
difficult to state with precision.''\28\ The practical effect
of clause 2 is to allow the Committee to construe the ethical
rules broadly and prohibit Members from doing indirectly what
they would be barred from doing directly. The Ethics Manual
states that ``a narrow technical reading of a House [R]ule
should not overcome its `spirit' and the intent of the House in
adopting that and other rules of conduct.''\29\ Similarly, the
Committee has found that conduct that does not strictly meet
each of the elements of a federal statute may nonetheless
violate the Code of Official Conduct.\30\
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\28\114 Cong. Rec. 8778 (Apr. 3, 1968) (Statement of Representative
Price).
\29\Ethics Manual at 16-17 (citing House Select Comm. On Ethics,
Advisory Opinion No. 4, H. Rept. 95-1837, 95th Cong. 2d Sess. 62
(1979)).
\30\See Comm. on Ethics, In the Matter of Allegations Relating to
Representative Ruben Kihuen, H. Rept. 115-1041, 115th Cong., 2d Sess.
(2018) (noting that conduct that may not meet the technical
requirements of applicable sexual harassment laws may nevertheless be a
violation of the Code of Official Conduct).
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IV. FACTUAL BACKGROUND
Representative Kelly has represented the 16th District of
Pennsylvania since 2011.\31\ He has been married to his wife,
Victoria Kelly, since 1973. Mrs. Kelly, who received a large
family inheritance, has her own trading account that is managed
by a brokerage; that account was worth over $7 million in
2020.\32\
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\31\Representative Kelly was originally elected to the 3rd District
of Pennsylvania in 2010, which was largely redistricted to the 16th
District in 2018.
\32\See Exhibit 1.
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As discussed in more detail below, in early 2020,
Representative Kelly and his staff worked to garner support
within the Department of Commerce (Commerce) and the Trump
Administration for the implementation of Section 232 tariffs to
protect the production of grain oriented electrical steel
(GOES) in the United States. AK Steel, which was acquired by
Cleveland-Cliffs in early 2020, is the only producer of GOES in
the United States. GOES is exclusively produced at a plant in
Butler, PA, which is located in Representative Kelly's
district. In March 2020, Cleveland-Cliffs' CEO publicly
indicated that, without tariff protections, the company may
close the Butler plant (as well as a finishing plant in
Zanesville, OH) and lay off employees.\33\ On April 28, 2020,
Cleveland-Cliffs opted not to close the Butler or Zanesville
plants after Commerce advised the company that it would
initiate a Section 232 investigation covering certain GOES-
based steel products. Representative Kelly's staff was apprised
of these developments by Commerce officials and Cleveland-
Cliffs that same day. The next day, April 29, Mrs. Kelly
purchased 5,000 shares of Cleveland-Cliffs stock for $23,075.
This purchase was disclosed in a periodic transaction report
(PTR) filed by Representative Kelly on May 15, 2020.
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\33\Daniel Moore, Steel CEO to Trump administration: Tariffs
`loophole' threatens Butler plant, Pittsburgh Post-Gazette (Mar. 12,
2020) (hereinafter March 2020 Pittsburgh Post-Gazette Article), https:/
/www.post-gazette.com/news/politics-nation/2020/03/12/Trump-tariffs-
loophole-jobs-Butler-AK-Steel-Cleveland-Cliffs-Mike-Kelly/stories/
202003120072.
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A. REPRESENTATIVE KELLY'S SUPPORT FOR SECTION 232 TARIFFS FOR
GOES PRODUCTS
On December 3, 2019, Cleveland-Cliffs announced a merger
agreement with AK Steel;\34\ the acquisition was finalized in
March 2020.\35\ In January and March 2020, Cleveland-Cliffs
expressed its intention to shut down both the Butler and
Zanesville plants ``[u]nless the U.S. government intervened and
either extended existing Section 232 steel tariff protections
to transformer lamination and cores . . . or instituted
standalone Section 232 tariffs for GOES products used in the
transformer supply chain,'' citing circumvention of existing
tariffs through Canada and Mexico.\36\ Representative Kelly was
aware of the concerns from individuals working at the Butler
plant beginning in early 2020.\37\ The potential closure of the
Butler plant was one of the most important constituent issues
that Representative Kelly and his congressional office
addressed in the early part of 2020. Representative Kelly
described it as ``a serious problem'' that ``is a matter not
only of the jobs in my town and in our state but also for
national security.''\38\ Likewise, one of his staffers
described the possible plant closure as a ``big deal'' for the
congressional office.\39\
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\34\See Cleveland-Cliffs, Cleveland-Cliffs to Acquire AK Steel
(Dec. 3, 2019), https://www.clevelandcliffs.com/news/news-releases/
detail/50/cleveland-cliffs-to-acquire-ak-steel.
\35\See Cleveland-Cliffs, Cleveland-Cliffs Completes Acquisition of
AK Steel (Mar. 13, 2020), https://www.clevelandcliffs.com/news/news-
releases/detail/35/cleveland-cliffs-completes-
acquisition-of-ak-steel.
\36\OCC Referral Exhibits 2, 5. Under Section 232 of the Trade
Expansion Act, the President can adjust imports of goods or materials
from other countries, including by tariffs, if the quantity or
circumstances surrounding those imports are found to be a threat to
national security. 19 U.S.C. Sec. 1862 (as amended). See also Cong.
Research Service, ``Section 232 of the Trade Expansion Act of 1962''
(Updated Apr. 1, 2022), available at https://crsreports.congress.gov/
product/pdf/IF/IF10667; March 2020 Pittsburgh Post-Gazette Article
(``Lourenco Goncalves, chairman and CEO of Cleveland-Cliffs Inc., said
in an interview he would `shut that plant down,' doubling down on a
`promise' he made last week before a Congressional panel to cut those
jobs should U.S. officials not act swiftly to stem the flow of [GOES]
imports.'').
\37\18(a) Interview of Representative Kelly.
\38\Id. (also stating that ``[M]y entire staff, whether it's here
in D.C. or back home, were alert.'').
\39\18(a) Interview of Congressional Staffer 2.
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The Chairman, President, and CEO of Cleveland-Cliffs was a
witness at a hearing held by the Congressional Steel Caucus on
March 5, 2020.\40\ In his testimony before the Caucus members,
including Representative Kelly, he discussed the importance of
Section 232 protections and said ``1,500 jobs in Butler, PA
will be gone . . . if I don't get help.''\41\ On March 6,
Representatives Kelly and Troy Balderson (of the 12th District
in Ohio that includes the Zanesville plant) transmitted a
letter to President Donald Trump regarding the threat of GOES
imports into Canada and Mexico being used to create products
that are then imported into the United States.\42\ The letter
indicated that this practice was a particular threat to AK
Steel, and noted AK Steel was soon going to be acquired by
Cleveland-Cliffs. Shortly thereafter, on March 9, the Butler
County Board of Commissioners sent a letter to President Trump
regarding their support for Cleveland-Cliffs' request to
``close the loophole in the `Section 232' steel tariffs'' and
laying out the potential loss to Butler County if Commerce did
not extend the tariffs.\43\ The Board of Commissioners copied
Representative Kelly on this letter.
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\40\Lourenco Goncalves, Congressional Steel Caucus Hearing
Testimony (Mar. 5, 2020), https://www.steel.org/wp-content/uploads/
2020/06/Lourenco-Goncalves-Chairman-President-and-CEO-Cleveland-Cliffs-
Testimony.pdf. See also OCC Referral Exhibit 5.
\41\OCC Referral Exhibit 5.
\42\See OCC Referral Exhibit 4.
\43\OCC Referral Exhibit 1.
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On April 15, 2020, Members of Congress sent a letter to
President Trump regarding their concerns about ``the
vulnerability of the electrical transformer supply chain and
the fate of 1,500 jobs in Pennsylvania and Ohio.''\44\
Representative Kelly was a main signatory on this letter, and
copied the U.S. Trade Representative, Secretary of Commerce
Wilbur Ross, and White House trade advisor Peter Navarro.
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\44\OCC Referral Exhibit 11.
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On April 22, 2020, Cleveland-Cliffs informed Representative
Kelly that it intended to provide layoff notices at the Butler
and Zanesville plants.\45\ From around April 22 through April
27, Representative Kelly was actively engaged in seeking
support for Section 232 tariffs for GOES products. As part of
that effort, Representative Kelly and his staff coordinated
with other Member offices and contacted Secretary Ross, the
U.S. Trade Representative, and senior White House
officials.\46\ The matter was a ``high priority'' for
Representative Kelly during this time.\47\
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\45\See OCC Referral Exhibit 13. See also OCC Referral Exhibit 16
(April 22, 2020, email from Congressional Staffer 2 to Commerce
official noting ``things are getting dire at the Butler, PA plant.'').
\46\See, e.g., OCC Referral Exhibits 12-21; Exhibit 2.
\47\See, e.g., OCC Referral Exhibit 19.
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B. DEPARTMENT OF COMMERCE ANNOUNCEMENT OF SECTION 232
INVESTIGATION
On April 24, 2020, Commerce informed Cleveland-Cliffs that
it would not pursue coverage of GOES derivative products under
the Section 232 tariffs.\48\ Representative Kelly and his staff
continued to liaise with the Administration on the issue after
April 24, with the discussion turning to whether Commerce would
initiate an investigation under Section 232, which allows the
Secretary of Commerce to self-initiate an investigation to
determine whether foreign imports are a threat to national
security.\49\ In a phone call that took place around noon on
April 28, 2020, Secretary Ross informed Cleveland-Cliffs' CEO
that Commerce intended to publicly announce a self-initiated
Section 232 investigation covering the GOES-based transformer
laminations and cores.\50\ Cleveland-Cliffs' employees informed
Representative Kelly's staff of Commerce's commitment to the
investigation later that same day.\51\ Staff from Commerce also
directly informed Representative Kelly's staff that day of the
decision to initiate a Section 232 investigation.\52\
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\48\See OCC Referral Exhibit 13.
\49\See, e.g., OCC Referral Exhibits 9, 12-27.
\50\See OCC Referral Exhibit 13.
\51\See OCC Referral Exhibits 13, 28-29, 31.
\52\See OCC Referral Exhibit 33; 18(a) Interview of Congressional
Staffer 2; see also OCC Referral Exhibit 15 (text from a staffer in
another congressional office to Representative Kelly's staff stating,
``Wilbur Ross just called AK Steel and they are going to come up with a
deal--they are not announcing the closing or announcing they are firing
anyone tomorrow!!!'').
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Representative Kelly did not recall the specifics of when
he learned of the Section 232 investigation, but he and several
of his congressional staffers testified that he would have been
informed of the development right away.\53\ Representative
Kelly told the Committee that his wife was aware of the
potential layoffs and the impact that would have on the Butler
community, but he did not believe he discussed Commerce's
actions with her.\54\ Representative Kelly's counsel stated in
a submission to the Committee that ``Mrs. Kelly was aware that
Representative Kelly was working hard to protect these jobs and
keep the AK Steel Butler Works open and operational.''\55\
Likewise, in his interview with the Committee, Representative
Kelly stated that ``[e]veryone talked about the closure of the
plant'' and that people would come up to him and Mrs. Kelly in
town to discuss their concerns.\56\ Representative Kelly was
also working from his home in Butler, PA during this time
period, as he was recovering from COVID.\57\ He told the
Committee that ``Mrs. Kelly would've heard any of my
conversations'' and that she ``sits around for most of the time
I'm on the phone.''\58\ Representative Kelly's staffer informed
the Committee that he would have informed Representative Kelly
by at least 4:00 p.m. on April 28, 2020, that Commerce decided
to initiate a Section 232 investigation;\59\ the Committee was
unable to determine whether Mrs. Kelly heard any such
conversation.
---------------------------------------------------------------------------
\53\OCC Referral Exhibits 2, 30; 18(a) Interview of Congressional
Staffer 1 (``I was informed by [Congressional Staffer 2], it would've
gone to the Member first.''); 18(a) Interview of Congressional Staffer
2; 18(a) Interview of Representative Kelly.
\54\18(a) Interview of Representative Kelly.
\55\Letter from counsel to Representative Mike Kelly to Chairman
Theodore E. Deutch and Ranking Member Jackie Walorski, Committee on
Ethics (Feb. 9, 2022) (Appendix B).
\56\18(a) Interview of Representative Kelly.
\57\See Office of Representative Mike Kelly, Representative Kelly
Tests Positive for COVID-19 (Mar. 27, 2020), https://kelly.house.gov/
media/press-releases/representative-kelly-tests-positive-covid-19; see
also Office of Representative Mike Kelly, Kelly Defeats COVID-19,
Donates Convalescent Plasma to Aid Others in the Fight (May 12, 2020),
https://kelly.house.gov/media/press-releases/kelly-defeats-covid-19-
donates-convalescent-plasma-aid-others-fight (``U.S. Representative
Mike Kelly . . . has been declared free of the virus by medical
professionals. The congressman tested negative for the virus and
positive for antibodies on May 6 . . . .'').
\58\18(a) Interview of Representative Kelly.
\59\18(a) Interview of Congressional Staffer 2.
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Representative Kelly's staff initially expected Commerce to
issue a press release regarding the Section 232 investigation
imminently on the afternoon of April 28, 2020.\60\ In
anticipation of this release, Representative Kelly's policy
director emailed senior Cleveland-Cliffs employees, ``Assuming
everything stays on track with [Secretary] Ross' offer to help
with AK Steel, please let [communications director] know if you
need a quote from [Representative Kelly]. He's happy to help
with press!''\61\ On the morning of April 29, 2020,
Representative Kelly's policy director informed other staffers
that she had spoken with a senior Cleveland-Cliffs employee and
that an announcement was likely going to be made later in the
week based on a ``late night'' conversation with the Secretary
of Commerce's chief of staff.\62\ As discussed further below,
that same day, Representative Kelly's wife purchased 5,000
shares of Cleveland-Cliffs stock.
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\60\See OCC Referral Exhibit 34.
\61\OCC Referral Exhibit 47.
\62\OCC Referral Exhibit 34.
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On May 1, 2020, Representative Kelly and several of his
staffers had a phone call with Secretary Ross, during which
Secretary Ross confirmed that a Section 232 investigation
announcement was forthcoming.\63\ Commerce publicly announced
its Section 232 investigation on May 4, 2020.
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\63\See OCC Referral Exhibits 35-36. Representative Kelly testified
that he had no reason to believe that once Commerce had informed
Cleveland-Cliffs that it would self-initiate a Section 232
investigation it would not go through with that decision. 18(a)
Interview of Representative Kelly.
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Following the initiation of the Section 232 investigation,
Representative Kelly and his staff continued to work with
Cleveland-Cliffs in an effort to secure a favorable
investigation result from Commerce. Representative Kelly's
office submitted a letter to the Secretary of Commerce on July
1, 2020, in response to Commerce's request for comments
regarding the 232 investigation. The letter stated:
As the U.S. Representative of Pennsylvania's 16th
Congressional District and lifelong resident of Butler,
Pennsylvania, I am writing on behalf of AK Steel, a
wholly-owned subsidiary of Cleveland-Cliffs Inc. and
the last producer of [GOES] in North America, to
express my strong support that the Department of
Commerce recommend that President Trump take the
necessary steps to preserve the production of this
critical material in the U.S.\64\
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\64\Exhibit 3. See also U.S. Department of Commerce, The Effect of
Imports of Transformers and Transformer Components on the National
Security, Appendix D (submission from Congressman Mike Kelly) (Oct. 15,
2020) (hereinafter Commerce Report).
The letter also explained the plant's importance to the
community, the essential nature of GOES for the electric grid,
and the related national security implications.\65\ It
addressed the concern that companies circumvented the Section
232 tariff through the favored trade status of Canada and
Mexico, which would cause Cleveland-Cliffs to permanently shut
down the Butler plant.\66\
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\65\See Exhibit 3.
\66\See id.
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In September and October 2020, Representative Kelly and his
staff continued to have discussions with Cleveland-Cliffs
personnel on the status of the Section 232 investigation.\67\
Following publication of a press article critical of the
Section 232 investigation, Representative Kelly's staffer
emailed Cleveland-Cliffs employees noting that the congressman
``was texting with your boss. He thinks it's important that we
push back on the article highlighting the national security
angle as the last maker of electrical steel.''\68\ These
communications were happening within a few weeks of local press
reaching out to Representative Kelly's office about Mrs.
Kelly's stock purchase.\69\
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\67\See Exhibit 4.
\68\Exhibit 5. See also Wall Street Journal Editorial Board,
Trump's Steel Election Trap, Wall Street Journal (Sept. 29, 2020),
https://www.wsj.com/articles/trumps-steel-election-trap-11601420322.
\69\See, e.g., Exhibit 6 (September 1, 2020, email chain in which
Congressional Staffer 2 notes, ``I spoke to Mike about it tonight.'');
OCC Referral Exhibit 45. Also around that time, Cleveland-Cliffs helped
plan a virtual ``steel industry'' fundraiser for Representative Kelly.
Exhibit 7.
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Commerce released its report on the findings of its Section
232 investigation on October 15, 2020.\70\ On November 2, 2020,
Section 232 extensions were applied to imported laminations and
cores of GOES, and Cleveland-Cliffs ``praised President Trump
and his Administration for taking action to save 1,400 jobs''
at the Butler plant.\71\ Prior to President Trump's speech on
the Section 232 extensions, Representative Kelly's office
provided talking points to the President's chief of staff and
another White House official.\72\
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\70\See Commerce Report (finding that GOES is ``critical to the
national security.'').
\71\Cleveland-Cliffs, Cleveland-Cliffs Applauds President Trump's
Actions to Address Imports of Laminations and Cores from Electrical
Steel (Nov. 2, 2020), https://www.clevelandcliffs.com/
investors/news-events/press-releases/detail/10/cleveland-cliffs-
applauds-president-trumps-actions-to.
\72\See Exhibit 8.
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C. MRS. KELLY'S CLEVELAND-CLIFFS STOCK TRANSACTIONS AND
RELATED MEDIA INQUIRIES
On April 29, 2020, Mrs. Kelly purchased 5,000 shares of
stock in Cleveland-Cliffs for $23,075.\73\ This purchase
occurred the day after Representative Kelly's staff learned
that Commerce would be opening a Section 232 investigation, but
five days before this information was announced publicly.
Within Mrs. Kelly's vast investment portfolio, the Cleveland-
Cliffs stock was an outlier. First, unlike other holdings in
her investment portfolio that were traded at PNC's discretion,
the purchase of this stock 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.\74\
Second, at the time of the purchase, Mrs. Kelly's investment
activity consisted primarily of funds and bonds, as well as a
trust that was substantially invested in ``large
capitalization'' entities.\75\ The Cleveland-Cliffs purchase
was Mrs. Kelly's first purchase of individual stock in nearly a
year.\76\
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\73\See Exhibit 9.
\74\See id. (``Per your direction, I purchased 5,000 shares of
Cleveland Cliffs (CLF), for a little more than $20,000. Because this
stock is not currently covered by our analysts, I will take all trade
direction from you (future buys or sells).'').
\75\Witness 2 confirmed that Mrs. Kelly had liquidated all of her
individual stocks in consultation with PNC. 18(a) Interview of Witness
2.
\76\See, e.g., Representative Kelly's 2018 Financial Disclosure
Statement (filed June 11, 2019); Representative Kelly's 2019 Financial
Disclosure Statement (filed Aug. 13, 2020).
---------------------------------------------------------------------------
Representative Kelly filed a PTR for this transaction on
May 15, 2020; in fact, the only transaction on that PTR was
Mrs. Kelly's Cleveland-Cliffs stock purchase. Individuals
involved with filing Representative Kelly's PTRs generally had
different recollections of how that process occurred. For
example, one of his staffers explained the process for filing
PTRs in Representative Kelly's office as follows:
[Witness 1] also worked with the firm [PNC] that Mrs.
Kelly would do her transactions through, her stock
transactions. He would work with them every month and
put together the list of transactions. He would put
together the report. He would email me four copies of
the report. I would print them out. I would walk them
into [Representative Kelly's] office. And every month
we would sign them--he would sign them.
We'd walk it down and get it date-stamped on all
four. They'd [the Legislative Resource Center] keep
three. I would keep them in my desk. I would keep one
copy, date-stamped, in my desk.\77\
---------------------------------------------------------------------------
\77\18(a) Interview of Congressional Staffer 2.
In contrast, Witness 1 (who assists many other Members with
their required disclosures as well) stated he would receive an
email from PNC showing the prior month's transactions, fill out
the PTRs as needed, and send them directly to the Legislative
Resource Center. He also stated that neither Representative
Kelly nor anyone else in his congressional office would receive
the PTRs. Representative Kelly stated that Witness 1 took care
of the Financial Disclosure statements and PTRs; he
acknowledged that he would ``sign off'' on every PTR filed but
said that he was unaware of the actual transactions that are
disclosed on the PTRs.\78\
---------------------------------------------------------------------------
\78\18(a) Interview of Representative Kelly.
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Representative Kelly initially informed the Committee,
through counsel, that he ``learned of [Mrs. Kelly's] stock
purchase when he was informed by a staff member who received an
inquiry shortly after'' the May 15, 2020, PTR was filed.\79\ In
his interview with the Committee, Representative Kelly first
stated that he was unaware of Mrs. Kelly's stock purchase until
he was contacted by OCC in 2021.\80\ Later, he said that Mrs.
Kelly herself ``probably told'' him of the Cleveland-Cliffs
stock purchase.\81\ He then recalled a specific conversation
with Mrs. Kelly during which she informed him that she
purchased Cleveland-Cliffs stock because ``it was [] so
cheap'':\82\
---------------------------------------------------------------------------
\79\Letter from counsel to Representative Mike Kelly to Chairman
Theodore E. Deutch and Ranking Member Jackie Walorski, Committee on
Ethics (Feb. 9, 2022) (Appendix B). In interviews with the Committee,
no staffers recalled any press inquiries until the beginning of
September 2020. 18(a) Interview of Congressional Staffer 1; 18(a)
Interview of Congressional Staffer 2; OCC Referral Exhibit 2.
\80\Representative Kelly was first notified of OCC's preliminary
review of this matter on March 9, 2021. OCC Referral at 3.
\81\18(a) Interview of Representative Kelly (he also clarified, ``I
can tell you this. I would believe that she would tell me, hey, you
know what, I know you're concerned about the mill, I bought some stock
in it.'')
\82\Id.
I had a promotion at the [car] dealership one time,
it was called ``Take Stock in America,'' and for every
time somebody bought a [car], we were going to give
them four shares of Armco stock.\83\ It was $27 a
share. And she said to me, [] how much did you pay for
that stock? I said, like $27. . . . She goes, do you
have any idea what it is today? I said no, I don't
follow but I'm more concerned with the mill staying
open. . . . And she said, well, I bought some of that
stock [Cleveland-Cliffs]. I bought it for a lot less
than you bought it for.\84\
---------------------------------------------------------------------------
\83\Prior to Cleveland-Cliffs and AK Steel, the plant was owned by
Armco Steel from 1927 through 1999. See, e.g., Lawrence Sanata, Retired
mill worker preserving history of Armco Steel Co. through book, Trib
Live (Oct. 21, 2021), https://archive.triblive.com/news/retired-mill-
worker-preserving-history-of-armco-steel-co-through-book.
\84\18(a) Interview of Representative Kelly.
When asked whether Mrs. Kelly knew the plant was going to
stay open at the time she purchased the stock, Representative
Kelly responded, ``I think 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.''\85\
---------------------------------------------------------------------------
\85\Id.
---------------------------------------------------------------------------
Several months later, on August 31, 2020, a reporter from
the Pittsburgh Post-Gazette reached out to Representative
Kelly's communications director about Mrs. Kelly's stock
purchase.\86\ In response to the reporter's inquiry,
Representative Kelly's office gave the following statement:
---------------------------------------------------------------------------
\86\See OCC Referral Exhibit 44.
At a time when the entire Butler community is
rallying to save the AK Steel plant and its 1,400 jobs,
Representative Kelly's wife made a small investment 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.\87\
---------------------------------------------------------------------------
\87\OCC Referral Exhibit 46.
Shortly after the Pittsburgh Post-Gazette ran its story on
September 20th, the Butler Eagle reached out to Representative
Kelly's office regarding the stock purchase. The same statement
was also sent to the Butler Eagle.
Contemporaneous messages between Representative Kelly's
staffers about the statement show that various iterations were
considered before a statement was given to these media
outlets.\88\ In text messages from September 1, 2020,
Representative Kelly asked one of his staffers: ``Let me know
how we answer the [Post-Gazette's] question about my wife's
investment in our hometown steel mill before we release
it.''\89\ The staffer responded that he planned to call
Representative Kelly the next morning to ``go over the
draft.''\90\ In his interview with the Committee,
Representative Kelly did not recall the statement or any
discussions about the press coverage around that time.\91\
---------------------------------------------------------------------------
\88\See, e.g., Exhibit 6; Exhibit 10; Exhibit 11.
\89\Exhibit 12.
\90\Id.
\91\18(a) Interview of Representative Kelly. (``I don't ever recall
reading that statement''; ``Q: Do you recall having conversations with
any member of your staff about that press coverage? A: No.'').
---------------------------------------------------------------------------
Despite the press statement about the stock purchase being
a way for Mrs. Kelly to ``show her support'' for the community,
the staffers involved in crafting the statement did not have
discussions with Mrs. Kelly about her reason for purchasing the
stock when drafting the statement.\92\ Representative Kelly's
staffer indicated Mrs. Kelly had told him the purpose was to
show support to the community, but only after OCC's
investigation had concluded.\93\ In contrast, Representative
Kelly testified that Mrs. Kelly made the stock purchase because
it was ``cheap.''\94\
---------------------------------------------------------------------------
\92\Correspondence reviewed by the Committee suggests that the
communications director was the first to articulate the purchase was
intended to show Mrs. Kelly's support of the Butler community, rather
than Mrs. Kelly or Representative Kelly. See, e.g., Exhibit 10.
\93\18(a) Interview of Congressional Staffer 1.
\94\18(a) Interview of Representative Kelly. (``Q: [W]e're just
wondering whether [the communications director] came up with [language
about supporting the town] or whether you had talked to him or
Congressional Staffer 2 and suggested that that was the reason behind
Mrs. Kelly's purchase? A: Well, Mrs. Kelly made the purchase because
she thought it was a good buy. . . .'').
---------------------------------------------------------------------------
None of the witnesses interviewed by OCC or the Committee
provided a clear explanation for how Mrs. Kelly's purchase of
the stock served to show support for the workers and management
of the Butler plant.\95\ Neither Mrs. Kelly, Representative
Kelly, nor the congressional office advertised Mrs. Kelly's
stock purchase at the time it was made.
---------------------------------------------------------------------------
\95\See 18(a) Interview of Congressional Staffer 1; 18(a) Interview
of Congressional Staffer 2; OCC Referral Exhibit 2 (testifying
regarding the statement, ``I don't know [] exactly what was in
[Representative Kelly's] mind with that. I just know this is what he
wanted to say.'').
---------------------------------------------------------------------------
In late September 2020, Cleveland-Cliffs officials informed
Representative Kelly and his staff that the company would
acquire ArcelorMittal USA LLC, a steel production company.\96\
This was publicly announced on September 28, 2020.\97\
Cleveland-Cliffs' acquisition of ArcelorMittal USA LLC closed
on December 9, 2020.\98\ Following the acquisition, Cleveland-
Cliffs stock increased substantially in value.\99\
---------------------------------------------------------------------------
\96\See Exhibit 5.
\97\Mark Bergen, Eddie Spence, and Joe Deaux, Cleveland-Cliffs to
Buy ArcelorMittal USA for $1.4 Billion, Bloomberg (Sept. 28, 2020),
https://www.bloomberg.com/news/articles/2020-09-28/cleveland-cliffs-to-
buy-arcelormittal-usa-in-1-4-billion-deal.
\98\See Cleveland Cliffs, Cleveland-Cliffs Inc. Completes
Acquisition of ArcelorMittal USA (Dec. 9, 2020), https://
www.clevelandcliffs.com/news/news-releases/detail/8/cleveland-cliffs-
inc-
completes-acquisition-of.
\99\Cleveland-Cliffs Stock Jumps 3x in 6 Months; What's Changed?,
Forbes (Jan. 7, 2021), https://www.forbes.com/sites/greatspeculations/
2021/01/07/cleveland-cliffs-stock-jumps-3x-in-6-months-whats-changed/
?sh=5ce217302708.
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On January 11, 2021, Mrs. Kelly sold all her shares of
Cleveland-Cliffs stock for $87,551.06, representing a
$64,476.06 profit.\100\ 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.
Representative Kelly filed a PTR disclosing the sale of Mrs.
Kelly's Cleveland-Cliffs stock on February 12, 2021.
---------------------------------------------------------------------------
\100\Letter from counsel to Mrs. Victoria Kelly to Chairman
Theodore E. Deutch and Ranking Member Jackie Walorski, Committee on
Ethics (Feb. 9, 2022). The stock price increased by approximately 285%
from the close of April 29, 2020 ($4.70/share) to the close of January
11, 2021 ($18.11/share). See also OCC Referral at n. 121.
---------------------------------------------------------------------------
In general, Representative Kelly testified that he does not
get involved with Mrs. Kelly's investment portfolio and his
wife ``doesn't discuss what she does with her stock,'' though
she sometimes tells him about stock she purchases after the
fact.\101\ Mrs. Kelly's investment advisor confirmed that
Representative Kelly was not involved with her portfolio.\102\
---------------------------------------------------------------------------
\101\18(a) Interview of Representative Kelly.
\102\18(a) Interview of Witness 2.
---------------------------------------------------------------------------
In February 2024, the Committee requested a voluntary
interview of Representative Kelly. On May 8, 2024,
Representative Kelly voluntarily testified before the
Committee. At that time, Representative Kelly was asked about
the most recent PTRs he had filed, which disclosed bond
transactions by his wife; he told the Committee he had not been
aware of those transactions until asked about them by the
Committee.\103\
---------------------------------------------------------------------------
\103\18(a) Interview of Representative Kelly.
---------------------------------------------------------------------------
On June 14, 2024, Representative Kelly filed a PTR
disclosing that Mrs. Kelly had purchased between $50,000 and
$100,000 in shares of Cleveland-Cliffs stock on March 28,
2024.\104\ The stock generally declined in value since that
purchase. At the time of Mrs. Kelly's stock purchase,
Representative Kelly's congressional office was involved in
another issue of concern to Cleveland-Cliffs. In January 2023,
the U.S. Department of Energy (Energy) proposed a rule change
that would have rendered GOES immaterial to the production of
electrical distribution transformers, again potentially
impacting jobs at the Butler plant. After ``a years-long
legislative effort to reverse the DOE proposed rule to save
these jobs,'' Energy announced that it would maintain the use
of GOES in distribution transformers on April 4, 2024--just one
week after Mrs. Kelly's second purchase of Cleveland-Cliffs
stock.\105\ Mrs. Kelly declined to respond to written questions
regarding this stock purchase. Representative Kelly also did
not respond to written questions about the purchase.\106\
---------------------------------------------------------------------------
\104\The disclosure of the March 28, 2024, stock purchase was late
under the STOCK Act, which requires PTRs to be filed by the earlier of:
(1) 30 days from being made aware of the transaction, or (2) 45 days
from the transaction. In August 2024, the Committee sent Representative
Kelly a letter informing him that he owed a $200 late fee. The letter
noted that it was Representative Kelly's fourth late PTR. A second
notice of the required fee was sent in November 2024. As of the date of
this Report, Representative Kelly has not paid the late filing fee or
sought a waiver for the fee.
\105\Office of Representative Mike Kelly, Representative Mike Kelly
Statement on Department of Energy Finalized Rule on Grain Oriented
Electrical Steel to Save Hometown Steel Plant (Apr. 4, 2024), https://
kelly.house.gov/media/press-releases/rep-mike-kelly-statement-
department-energy-finalized-rule-grain-oriented. He also held a
townhall about efforts to repeal the rule in order to save the Butler
plant. Office of Representative Mike Kelly, WPXI-TV recaps Rep. Mike
Kelly's town hall to save 1,300 jobs at local steel plant (Apr. 9,
2024) (sharing broadcast news coverage of an April 1, 2024, town hall),
https://www.youtube.com/watch?v=MS7k2MC-6mI. Representative Kelly later
introduced an amendment to fully repeal the rule. Office of
Representative Mike Kelly, Kelly amendment to fully repeal job-killing
Dept. of Energy policy passes House Rules Committee, advances to full
House vote (May 7, 2024), https://kelly.house.gov/media/press-releases/
kelly-amendment-fully-repeal-job-killing-dept-energy-policy-passes-
house-rules.
\106\Representative Kelly requested, through his then-counsel, that
Committee communications be sent to him by mail at his home address.
The Committee then transmitted the questions by mail and provided an
additional two weeks to respond, but did not receive a response.
Committee staff also notified Representative Kelly's chief of staff of
the outstanding request. Representative Kelly did not provide an
explanation for his refusal to correspond electronically, or his
failure to respond to the request. Committee staff renewed the request
for information about the second stock purchase in the current
Congress; Representative Kelly declined to cooperate.
---------------------------------------------------------------------------
As discussed above, Mrs. Kelly refused to testify before
the Committee. In lieu of her in-person testimony, the
Committee sought her responses under oath or affirmation to
less than two pages of written questions, including why she
purchased the stock, whether she discussed Commerce's actions
relating to Cleveland-Cliffs with Representative Kelly or his
staff, and why she decided to sell her stock in January 2021.
She declined to respond; her counsel cited Mrs. Kelly's recent
health issues and prior cooperation as a basis for not
cooperating further. According to Representative Kelly, Mrs.
Kelly did not want to interview with the Committee because the
process was ``invasive.''\107\
---------------------------------------------------------------------------
\107\18(a) Interview of Representative Kelly.
---------------------------------------------------------------------------
V. FINDINGS
A. THE COMMITTEE DID NOT FIND SUBSTANTIAL EVIDENCE THAT REP-
RESENTATIVE KELLY VIOLATED LAWS, RULES, OR OTHER STANDARDS
OF CONDUCT RELATING TO INSIDER TRADING AND CONFLICTS OF IN-
TEREST
1. Insider Trading
The Committee has long advised that Members and employees
are prohibited from entering into personal financial
transactions to take advantage of any confidential information
obtained through the performance of their official governmental
duties.\108\ The STOCK Act explicitly affirmed that Members and
employees are subject to the insider trading prohibitions
arising under federal securities laws as to information learned
both in an official capacity and a personal capacity.\109\ This
also extends to instances where a Member engaged in
``tipping.'' Tipping is the passing along of inside information
in violation of a duty of confidentiality. A tip occurs when
the tipper discloses material, nonpublic information to another
person, who knows or should have known that the tipper was
breaching a duty by disclosing the information and the tipper
intended to personally benefit by providing the
information.\110\
---------------------------------------------------------------------------
\108\2011 Pink Sheet.
\109\2012 Pink Sheet; 2020 Pink Sheet.
\110\2011 Pink Sheet. A personal benefit can include either a
direct profit or an indirect ``gift'' of information. See Salman, 137
S. Ct. at 428.
---------------------------------------------------------------------------
OCC commissioned an expert report to provide an opinion on
whether Mrs. Kelly's stock purchase may have violated Federal
laws related to insider trading. The expert report concluded
that while the fact of the Section 232 investigation was
nonpublic information, and therefore confidential, it was not
material.\111\ The expert did, however, find that ``Ms. Kelly's
purchase of Cleveland-Cliffs stock on April 29, 2020
represented a sharp departure from her investment behavior,
leading to the inference that this investment was due to some
special event or consideration.''\112\ On the basis of this
report, OCC did not consider whether Representative Kelly
engaged in insider trading.\113\
---------------------------------------------------------------------------
\111\See Exhibit 13. Specifically, OCC concluded that the
information was not material to Cleveland-Cliffs investors and there
was not a significant change in the price of Cleveland-Cliffs stock
after the Section 232 investigation became public.
\112\OCC Referral at 22.
\113\See OCC Referral at n. 8.
---------------------------------------------------------------------------
Nonetheless, Representative Kelly had a clear duty as a
Member of Congress to refrain from using confidential
information obtained through the performance of his official
duties for private gain. Although his congressional office had
been voicing this issue to Commerce for months, Mrs. Kelly did
not make her stock purchase until the day after Representative
Kelly learned of the Section 232 investigation and that the
workers at the Butler plant would continue to be employed--in
other words, once the matter was resolved in Cleveland-Cliffs'
favor. Further, Representative Kelly admitted Mrs. Kelly may
have overheard his discussions about the matter while he was
working from home recovering from COVID.\114\
---------------------------------------------------------------------------
\114\18(a) Interview of Representative Kelly.
---------------------------------------------------------------------------
While Representative Kelly learned confidential information
shortly before Mrs. Kelly's stock purchase, it is not clear
whether Mrs. Kelly made the trade based on this information and
no evidence was uncovered to show that Representative Kelly
shared nonpublic information with his wife with the intent to
personally benefit from that information. However, the timing
alone of Mrs. Kelly's purchase raises serious concerns; these
concerns are amplified when coupled with the fact that it was a
deviation from her typical trading activity, which principally
relied on her broker to identify trades and had otherwise
divested of all individual stocks. Unlike every other stock she
held since at least 2017 until the Cleveland-Cliffs purchase in
2020, this purchase required her explicit instruction.\115\ The
Committee did not receive convincing evidence from any
individual as to why Mrs. Kelly chose to purchase Cleveland-
Cliffs stock the day after Representative Kelly learned that
Cleveland-Cliffs would not be closing the Butler plant as
previously announced.
---------------------------------------------------------------------------
\115\After Mrs. Kelly's sale of the Cleveland-Cliffs stock, she
purchased two other stocks between June and December of 2021 that
required her instruction; both stocks were sold in 2023. Neither
company is local to the congressman's district.
---------------------------------------------------------------------------
Likewise, the Committee was unable to find an explanation
as to the intent behind Mrs. Kelly's stock purchase.
Representative Kelly's congressional office provided a
statement to the press that she was showing support for the
local community. However, there is no evidence that Mrs. Kelly
was involved in crafting the statement or that she informed
anyone in the community of her stock purchase. Nor did she
actually show public support through other actions either
before or after the stock purchase. Mrs. Kelly's refusal to
cooperate left the Committee with no viable explanation as to
why she purchased Cleveland-Cliffs stock when she did.
Furthermore, Representative Kelly's testimony on the subject
was inconsistent. Contemporaneous messages show that his
congressional staff may have first suggested the idea that the
stock purchase was intended to show community support.
Representative Kelly did not recall being involved in these
discussions although contemporaneous records show his
involvement in reviewing draft press statements. In contrast to
the publicly stated reason for the stock purchase,
Representative Kelly told the Committee that Mrs. Kelly
purchased Cleveland-Cliffs stock ``because it was cheap.''\116\
However, the stock had in fact been ``cheap'' for years.\117\
He further stated that ``the natural follow [is], I think
people buy stock because they think they're going to make money
on it.''\118\
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\116\18(a) Interview of Representative Kelly.
\117\AK Steel acquired Armco Inc. in 1999; from 1999-2020, the
value of AK Steel stock was, on average, under $10/share for 12 of
those years, including every year since 2012. See Investing, AK Steel
Stock Price History, https://www.investing.com/equities/ak-steel-
holding-corp-historical-data (last visited Apr. 23, 2025). See also
Macrotrends, Cleveland-Cliffs-41 Year Stock Price History (last visited
Apr. 23, 2025), https://www.macrotrends.net/stocks/charts/CLF/
cleveland-cliffs/stock-price-history.
\118\18(a) Interview of Representative Kelly.
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Without Mrs. Kelly's cooperation, the Committee was
ultimately unable to confirm whether Mrs. Kelly received
nonpublic information from her husband or what her intent was
in purchasing the Cleveland-Cliffs stock. In light of concerns
raised about Mrs. Kelly's health, and the lack of candor in her
communications to the Committee over the course of its
investigation, the Committee determined not to subpoena Mrs.
Kelly.\119\ Based on the record available, the Committee did
not find sufficient evidence that Representative Kelly engaged
in or facilitated insider trading with respect to his wife's
2020 purchase of Cleveland-Cliffs stock.\120\
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\119\Representative Kelly informed the Committee that Mrs. Kelly
did not want to interview with the Committee because the process was
``invasive.'' Id.
\120\On this basis, the Committee also did not reach a finding
regarding whether the confidential information--that Commerce would
initiate a Section 232 investigation and the Butler plant would not be
closing--was material.
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As discussed below, Members must avoid even the appearance
of impropriety. Accordingly, the Committee recommends the
Kellys divest of all Cleveland-Cliffs stock should he continue
to take official actions relating to the company.
2. Conflict of Interest
Representative Kelly continued to advocate for Section 232
tariffs for GOES products even after Mrs. Kelly held stock in
Cleveland-Cliffs. As discussed above, he took several actions
to specifically benefit Cleveland-Cliffs during the time his
wife had a direct financial interest in the company, including:
issuing a press release praising Commerce's decision to
initiate a Section 232 investigation; communicating with
Commerce during the public comment period on behalf of
Cleveland-Cliffs; preparing talking points for President Trump
when he announced the Section 232 extensions to GOES products;
corresponding with senior White House officials regarding
Cleveland-Cliffs' competitive position; and, in the case of
Mrs. Kelly's most recent Cleveland-Cliffs stock purchase,
working to revise and repeal a rule change that would
effectively make GOES obsolete. Representative Kelly told the
Committee: ``I know that plant, and I know what we make, and I
know we're the last producer of that product in the United
States . . . Am I an insider? Damn right. I have been inside
that mill.''\121\
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\121\18(a) Interview of Representative Kelly. See also Letter from
Representative Mike Kelly to Chairman Michael Guest and Ranking Member
Mark DeSaulnier, Committee on Ethics (July 7, 2025) (Appendix B)
(``I've been inside the mill, I've spoken with the workers, and they
appreciate the hard work we have done to fight for those jobs and fight
for Butler.'').
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The Committee has noted that ``[t]he rules governing
conflicts of interest require a fact-specific analysis, and
Members are encouraged to conduct that analysis with the
guidance of the Committee's non-partisan, professional
staff.''\122\ Not every financial interest triggers a
requirement of recusal; as the Committee has noted, Members who
happen to be farmers may still represent their constituents in
matters relating to farm policy. Similarly, ``[n]o statute or
rule requires the divestiture of private assets or holdings by
Members . . . upon entering their official position.''\123\ The
Committee ``views conflicts of interest differently based on
the nature of the personal financial interest relative to the
scope of the action.''\124\ Members are generally only expected
to recuse themselves from a vote when they have ``a direct
personal or pecuniary interest'' that would be affected by the
legislation.\125\ A Member is not restricted from voting on
legislation that affects a class of companies or assets, as
opposed to legislation affecting a specific company or asset in
which the Member holds a financial interest.\126\ The Committee
has noted, however, that certain actions, such as contacting
Executive Branch agencies, ``entail a degree of advocacy above
and beyond that involved in voting,'' and Members are held to a
higher standard with respect to such activity.\127\
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\122\Comm. on Ethics, In the Matter of Allegations Relating to
Representative Tom Petri, H. Rept. 113-666, 113th Cong., 2d Sess. 6
(2014) (hereinafter Petri).
\123\2011 Pink Sheet.
\124\Gingrey at 11.
\125\Members are also expected to recuse themselves when they have
even an appearance of a conflict of interest arising out of a
negotiation or agreement for future employment. House rule XXVII, cl.
4.
\126\Williams at 9-10.
\127\Ethics Manual at 246.
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In assessing whether Representative Kelly had an actual
conflict of interest with respect to his official actions to
the benefit of Cleveland-Cliffs, House rule XXIII, clause 3
provides a framework for reviewing the matter. A violation of
clause 3 occurs when a Member ``(1) receives or accrues
compensation; and (2) that compensation resulted from the
`improper' exercise of [the Member's] influence.''\128\
Regarding the first factor, the Committee has historically
``defined `compensation' to include the service of a Member's
own `narrow, financial interests as distinct from those of
their constituents.'''\129\ With respect to the second factor,
the Committee has articulated that it is improper to ``take
actions which are intended to assist a specific entity in which
the Member has a financial interest, and in a manner that could
affect that interest.''\130\ In this instance, the Committee
recognizes that Representative Kelly's interests were aligned
with his constituents, and there is evidence that
Representative Kelly took actions to the benefit of Cleveland-
Cliffs both before and after his wife purchased stock in the
company. Accordingly, the Committee did not determine that
Representative Kelly had an actual conflict of interest.
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\128\Berkley at 47.
\129\Id. (quoting House Ethics Manual (2008) at 314).
\130\Comm. on Ethics, In the Matter of Representative Maxine
Waters, H. Rept. 112-690, 112th Cong., 2d Sess. 14 (2012); see also
Berkley at 48.
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Even if Representative Kelly did not have an actual
conflict of interest, his conduct may still be in violation of
Section 5 of the Code of Ethics if he had an apparent conflict
of interest. The Committee has long cautioned Members to
``avoid situations in which even an inference might be drawn''
that a Member took an official action to benefit their own
financial interests.\131\ In determining whether a Member's
conduct is in violation of Section 5, the Committee asks
``whether a reasonable person might conclude that a Member took
an official action for personal financial gain.''\132\ To
determine the answer to this question, the Committee typically
considers ``the totality of the circumstances in each
case.''\133\ In Williams, a matter which presented similar
allegations of a conflict of interest related to the
sponsorship of legislation, the Committee outlined a number of
factors for consideration, centering around (a) the nature of
the Member's financial interest, and (b) the nature of the
Member's official action.\134\
---------------------------------------------------------------------------
\131\Ethics Manual at 196, 261.
\132\Williams at 12.
\133\Id.
\134\Id. at 13-16.
---------------------------------------------------------------------------
The Committee has generally considered the following
factors with respect to the nature of the Member's financial
interest including: the dollar value of the financial interest;
the relative value of the investment compared to the entire
investment portfolio; whether the investment is public or
private; whether the financial interest is direct or imputed;
and whether the interest is aligned with the interest of
constituents.
Here, Mrs. Kelly purchased 5,000 shares of Cleveland-Cliffs
stock for $23,075, and later sold them for $87,551.06, accruing
a $64,476.06 profit. The relative value of this stock compared
to the value of Mrs. Kelly's entire investment portfolio was
minimal, as the portfolio contained more than 7 million
dollars' worth of assets at the time. Additionally, the stock
purchase was in a publicly traded company. With respect to
whether any financial interest was direct or imputed,
Representative Kelly himself appears to have had little or no
direct financial interest in the Cleveland-Cliffs stock
purchased by Mrs. Kelly. Her portfolio is in her name and,
according to Representative Kelly, he has no legal right to any
of Mrs. Kelly's invested funds.\135\ However, he could have had
an imputed interest in the increased value of the stock between
when Mrs. Kelly purchased it in April 2020 and sold it in
January 2021. Representative Kelly has not attempted to claim
the spousal exemption and while Representative Kelly does not
have direct access to the investment account, the funds within
the account can be used by Mrs. Kelly to address matters
relevant to their joint personal financial dealings.
---------------------------------------------------------------------------
\135\18(a) Interview of Representative Kelly.
---------------------------------------------------------------------------
When asked whether he had any concerns about the potential
conflict of interest in working on matters related to
Cleveland-Cliffs while his wife owned stock, Representative
Kelly responded, ``My concern was more for the people I
represent and the fact that there's a lot of jobs that were at
risk. I don't think my wife buying a small amount of stock is
going to drive any decision that I would've had.''\136\ The
Committee did not find any evidence to the contrary;
Representative Kelly consistently emphasized that his primary
concern was for his constituents, and the broader policy and
security issues he associated with his support for domestic
GOES production.
---------------------------------------------------------------------------
\136\Id.
---------------------------------------------------------------------------
In considering the nature of the Member's official action,
the relevant factors include: whether the action was consistent
with the treatment of others who requested similar assistance;
whether other Members of Congress participated; whether public
oversight was applied; the potential effect the proposed
activity would have on the official's financial interest; and
whether the proposed activity affects a sector or large class
of entities or narrowly affects a single or smaller group of
entities in which the Member retains a financial interest.
In this matter, Representative Kelly and his staff
testified that the potential closure of the Butler plant was a
very important issue for the constituents in Representative
Kelly's district and that Representative Kelly was directly
involved in the work. According to the congressional staff, it
was unusual for him to be involved in casework affecting the
district, although constituents would come to Representative
Kelly with concerns that he would pass along to district
staff.\137\ In the case of Cleveland-Cliffs, this matter was
high-profile in the district because of its potential to affect
a large number of jobs in the community. Likewise, another
Member, Representative Balderson, was also concerned about the
potential closure of a Cleveland-Cliffs plant in his district
in Ohio. Representatives Kelly and Balderson jointly signed
many of the letters to Commerce, and their staff appears to
have been in contact frequently in the weeks leading up to the
Section 232 investigation announcement. The decision to
undertake a Section 232 investigation by Commerce had no public
oversight and impacted only two plants in Butler, PA and
Zanesville, OH.\138\ However, while the decision had large
implications for Representative Kelly's district, the decision
did not appear to have a significant impact on Cleveland-
Cliffs' stock price.
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\137\18(a) Interview of Congressional Staffer 1; 18(a) Interview of
Congressional Staffer 2.
\138\Once the Section 232 investigation was initiated, there was a
public comment period. See Commerce Report.
---------------------------------------------------------------------------
Given the totality of the circumstances in this case, the
Committee did not conclude that Representative Kelly had a
clear actual or apparent conflict of interest, as a reasonable
person would not conclude that Representative Kelly undertook
the work related to the Section 232 investigation by Commerce
to benefit himself rather than his constituents. However, the
Ethics Manual advises Members to use ``added circumspection''
when sponsoring legislation or contacting the Executive Branch
on matters that may affect their financial interest and urges
Members to contact the Committee for guidance in deciding how
to address potential conflicts. Representative Kelly did not
seek the Committee's guidance. In a prior matter, the Committee
considered whether a Member's investments violated conflict of
interest standards and ultimately concluded that no rules or
other laws were violated based in large part on the fact that
the Member repeatedly sought advice from the Committee on the
official actions taken related to the company in which he
invested, and the Member substantially complied with that
advice.\139\ While it is not a violation of the rules to not
seek advice from the Committee, had Representative Kelly done
so, he would have been better able to appreciate the potential
appearance of impropriety created by his wife's stock purchase.
---------------------------------------------------------------------------
\139\Petri.
---------------------------------------------------------------------------
Based on the foregoing, the Committee did not find that
Representative Kelly clearly violated conflict of interest laws
or standards. His ongoing financial interest in Cleveland-
Cliffs nonetheless creates an appearance of impropriety, as
discussed further below. In light of the significance of the
Butler plant to his official work, it would be unreasonable to
expect Representative Kelly to refrain from taking actions to
benefit Cleveland-Cliffs. To best serve his constituents
without creating any appearance of acting for personal gain,
neither Representative Kelly nor his spouse should maintain a
financial interest in Cleveland-Cliffs.
B. THE COMMITTEE FOUND SUBSTANTIAL EVIDENCE THAT
REPRESENTATIVE KELLY VIOLATED THE CODE OF OFFICIAL CONDUCT
House rule XXIII, clause 1, states that ``[a] Member . . .
shall behave at all times in a manner that shall reflect
creditably on the House'' and clause 2 states that ``[a] Member
. . . shall adhere to the spirit and the letter of the Rules of
the House . . . .'' In enforcing clause 1, the Committee has
noted that ``Clause 1 is a purposely subjective standard
designed to `have a deterrent effect against improper conduct,'
and provide `the ability to deal with any given act or
accumulation of acts which, in the judgment of the [C]ommittee,
are severe enough to reflect discredit on the Congress.'''\140\
The provision serves ``as a safeguard for the House as a
whole.''\141\
---------------------------------------------------------------------------
\140\Gaetz.
\141\Sergeant-At-Arms at 22.
---------------------------------------------------------------------------
The Ethics Manual also warns Members against actions that
``may create an appearance of impropriety that may undermine
the public's faith in government.''\142\ The Committee has
repeatedly cautioned that Members should avoid even the
appearance of impropriety, which undermines the public's
confidence in the integrity of government officials.\143\ The
Committee explained its approach to such matters in a recent
case, and it has followed this approach in many matters, over
many years: ``[T]here is no evidence that [the Member] . . .
purposefully violated the rules . . . But there are a range of
mindsets between completely innocent and unforgivably corrupt.
Somewhere along that span sit Members who fail to exercise care
that a reasonable Member would exercise in similar
circumstances to ensure compliance with the Code of
Conduct.''\144\
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\142\Id. at 24.
\143\See, e.g., Comm. on Ethics, In the Matter of Allegations
Relating to Representative Cathy McMorris Rodgers, H. Rept. 116-359,
116th Cong., 1st Sess. 52 (2019) (``Nonetheless, the Committee cautions
Representative Rodgers and the whole House community to avoid even the
appearance of a conflict of interest when entering into relationships
with contractors on behalf of the House.''); Comm. on Ethics, In the
Matter of Allegations Relating to Representative Thomas Garrett, Staff
Rept., 115th Cong., 2d Sess. 38 (2019) (``However, Members have a duty
to avoid even the appearance of impropriety. When Members accept gifts
from their employees, it can lead to an appearance that the Member
lacks impartiality and create an environment in which staff attempt to
win a Member's favor not based on their work product or effort, but by
offering to perform unofficial favors for or providing gifts to the
Member.''); Comm. on Ethics, In the Matter of Allegations Relating to
Representative Luis V. Gutierrez, H. Rept. 115-617, 115th Cong., 2d
Sess. 31 (2018) (``The Committee has also long cautioned Members that
when taking official actions, they must `avoid situations in which even
an inference might be drawn suggesting improper action.''').
\144\Comm. on Ethics, In the Matter of Allegations Relating to
Representative Bobby L. Rush, H. Rept. 115-618, 115th Cong., 2d Sess.
24 (2018).
---------------------------------------------------------------------------
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. Regardless of his motivations when taking
actions on behalf of Cleveland-Cliffs, those actions have been
taken against the backdrop of his family's financial interest
in the company. The questions raised about the 2020 stock
purchase are not unreasonable; the financial benefit of a
nearly $65,000 profit risks creating an appearance of self-
dealing. However, the significance of this profit was dismissed
by Representative Kelly, who stated to the Committee multiple
times that ``no one cares'' about his wife's stock purchase.
The conflict of interest standards and federal laws prohibiting
insider trading exist because people do care whether he, in his
role as a Member of Congress, obtained confidential information
and gave that information to his wife while advocating for
policies that would benefit his family, resulting in thousands
of dollars in financial gain. Mrs. Kelly's subsequent purchase
of Cleveland-Cliffs stock despite the ongoing investigation,
and Representative Kelly's failure to timely disclose that
purchase and answer questions relating to it, are yet more
examples of his failure to recognize the gravity of the
allegations in this case and indicate a lack of respect for the
Committee's role and processes. Representative Kelly has not
demonstrated sufficient appreciation for the harm to the
institution caused by the appearance of impropriety.
Members have a duty of candor and diligence when under
investigation by the Committee.\145\ During his interview with
the Committee, some of Representative Kelly's answers to key
questions were inconsistent both during his testimony and with
his prior written responses to Committee requests for
information. In addition, Representative Kelly's production of
documents was largely unresponsive. Most concerning, when asked
to respond to a limited set of written questions about the
second purchase of Cleveland-Cliffs stock, both Representative
Kelly and Mrs. Kelly refused to cooperate altogether.
---------------------------------------------------------------------------
\145\Comm. on Ethics, In the Matter of Allegations Relating to
Representative George Santos, H. Rept. 118-274, 118th Cong., 1st Sess.
55 (2023); Comm. on Ethics, In the Matter of Allegations Relating to
Delegate Michael F. Q. San Nicolas, H. Rept. 117-387, 117th Cong., 2d
Sess. 5 (2022); Comm. on Ethics, In the Matter of Allegations Relating
to Representative David Schweikert, H. Rept. 116-465, 116th Cong., 2d
Sess. 6 (2020) (hereinafter Schweikert).
---------------------------------------------------------------------------
The Committee has previously found Members to be in
violation of clause 1 of the Code of Official Conduct when they
have acted in a manner that impeded the Committee's
investigation.\146\ Many of those matters have resulted in a
sanction being imposed on the Member. In one matter, the
Committee noted that a Member's efforts ``to delay and impede
[an investigative subcommittee's] investigation were not only
highly detrimental to the Committee's work and the reputation
of the House, they were themselves sanctionable
misconduct.''\147\ In another matter, the Committee reproved a
Member for interfering with its investigation, noting that
``the Committee cannot perform its essential functions, which
are critical to upholding the public's trust in the institution
of the House, without the full cooperation of the House Members
and staff.''\148\
---------------------------------------------------------------------------
\146\See, e.g., Schweikert; Comm. on Ethics, In the Matter of
Allegations Relating to Representative Judy Chu, H. Rept. 113-665,
113th Cong., 2d Sess. 15 (2014) (hereinafter Chu); Comm. on Ethics, In
the Matter of Allegations Relating to Representative Laura Richardson,
H. Rept. 112-642, 112th Cong., 2d Sess. 32 (2012) (finding that
``Respondent's conduct, including her conduct after receiving notice of
the Committee's investigation, evidences a pattern of indifference or
disregard for the laws, rules or regulations of the United States House
of Representatives.'').
\147\Schweikert at 6.
\148\Chu at 14-15.
---------------------------------------------------------------------------
The Committee found that Representative Kelly violated
clause 1 of the Code of Official Conduct by failing to meet his
duty of candor. The Committee further determined that this
Report shall serve as a reproval of Representative Kelly's
conduct.\149\
---------------------------------------------------------------------------
\149\Representative Kelly is also directed to pay his outstanding
$200 late filing fee within 30 days of the date of this Report.
---------------------------------------------------------------------------
VI. CONCLUSION
The Committee reminds all Members to uphold their
responsibility to maintain the privacy of confidential
information and to avoid even the appearance of impropriety
when carrying out their governmental duties. This is
particularly important when Members may be viewed by the public
as having a personal, financial motive for their official
actions and often occurs in the context of stock transactions.
The Committee has long advised ``added circumspection'' when
Members take actions above and beyond voting that may affect
their personal financial interests. Representative Kelly did
not show sufficient circumspection.
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.
Representative Kelly has also repeatedly emphasized that the
official actions he has taken with respect to GOES tariffs
uniquely benefit the Cleveland-Cliffs plant, the only facility
in the country currently producing GOES. Even where a company
is a major employer in a Member's district, it is not
necessarily an impermissible conflict for the Member to own
stock in that company and take official actions that benefit
that company. Here, however, where there is evidence that the
Member had confidential information at the time his spouse was
actively trading on the company's stock, while the Member took
official actions directly affecting the specific company, there
is a unique and heightened ethical concern.
In order to avoid any continued appearance of impropriety,
the Committee's position is that Representative Kelly should
ensure that he and Mrs. Kelly divest of all shares of
Cleveland-Cliffs before taking any further official action
relating to the company.\150\
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\150\To the extent divestment results in any profits, the Committee
recommends donating the profits to an appropriate charitable
organization. An appropriate charitable organization is an organization
described in section 501(c)(3) of the Internal Revenue Code of 1986 and
exempt from taxation under section 501(a) of the Code.
---------------------------------------------------------------------------
Members are entitled to defend themselves when under
investigation by the Committee, but they have a duty to
diligently address allegations that impact the integrity of the
institution. Representative Kelly acted in a manner that did
not reflect creditably upon the House by failing to meet his
duty of candor to the Committee. The Committee has thus
determined to reprove Representative Kelly for his violations
of the Code of Official Conduct.
VII. STATEMENT UNDER HOUSE RULE XIII CLAUSE 3(c)
The Committee made no special oversight findings in this
Report. No budget statement is submitted. No funding is
authorized by any measure in this Report.
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