House Ethics Committee Finds Evidence Against Rep. Mike Kelly

The House Ethics Committee has reportedly found substantial evidence suggesting that Rep. Mike Kelly (R-PA) violated the House Code of Conduct by profiting from a stock deal linked to a company that lawmakers were monitoring in Washington.

A recent 28-page report outlines various findings, indicating that while there was no solid proof of insider trading or direct conflict of interest, Kelly, who serves on the Strong Methods and Means Committee, failed to fulfill his obligations. Consequently, the committee has instructed both him and his wife to divest their investments in Cleveland Cliffs, a steel manufacturing company central to the investigation.

The report highlighted concerns over Kelly’s dealings with Cleveland Cliffs and, more specifically, his wife’s stock transactions. Even though the evidence didn’t rise to the level of outright insider trading or violations of conflict of interest rules, the committee expressed serious apprehension about the implications of Kelly’s actions.

The investigation delved into a series of trades made by Kelly’s wife, Victoria, involving Cleveland Cliffs stock over the past five years. In 2020, Cleveland Cliffs acquired AK Steel, the only U.S. producer of Grain Oriented Electric Steel (GOES).

Early in 2020, Cleveland Cliffs warned that without Section 232 tariffs from the Trump administration, they might have to shut down operations and lay off workers at their Butler location.

On April 28 of that year, the Commerce Department received information that aligned with what both Cleveland Cliffs and Kelly already knew.

Remarkably, the day after this disclosure, Victoria Kelly purchased 5,000 shares of Cleveland Cliffs stock, amounting to $23,075. The investigation was publicly announced shortly afterward on May 4.

The committee couldn’t definitively ascertain if Victoria Kelly was aware of any developments prior to her stock purchase. At that time, lawmakers, including Kelly, were working remotely after testing positive for Covid-19. He noted, perhaps humorously, that “Mrs. Kelly probably overheard me,” as he was mostly at home.

Nonetheless, the committee could not conclusively determine whether she had actually heard anything.

The investigation referenced the Congressional Knowledge (Equities) Act, implemented in 2012, which prohibits members and their staff from partaking in insider trading based on confidential information obtained through official capacities.

While Kelly participated in the inquiry, his wife declined to cooperate further, either via voluntary interviews or written responses to the committee’s questions. She stated her previous cooperation with document requests and cited health concerns for her withdrawal. Kelly remarked that she found the process invasive.

Because of this lack of cooperation from Victoria, the committee struggled to discern whether her stock acquisition was indeed inappropriate.

The findings also indicated that her investment in Cleveland Cliffs was an outlier in her overall portfolio. In contrast to her other transactions, which were made through her company, this particular stock purchase had to be directed by her due to it not being executed on PNC’s investment platform. It was her first individual stock purchase in a year and distinctly different from the bond investments she held.

Kelly commented that he believed the decision to invest was ultimately his wife’s. However, in August 2020, his office informed local media that he asked “lifelong residents to show support for this 100-year-old home worker and their managers.”

Another transaction looked at by the committee occurred in January 2021, shortly after Cleveland Cliffs acquired the steel manufacturer in December 2020, which saw significant increases in stock value. That month, Victoria Kelly sold all her Cleveland Cliffs shares for $87,551.06, reaping a profit of $64,476.06.

Witnesses, including Rep. Kelly, could not satisfactorily explain why Mrs. Kelly chose to sell her stock at that moment.

In June 2024, Kelly disclosed that he had purchased between $50,000 and $100,000 worth of Cleveland Cliffs shares in March while his office was dealing with issues involving the company and the Department of Energy. March was also the month when the Energy Department made decisions regarding protections for the facilities in Butler.

Ultimately, the committee advised Kelly and his wife to divest all shares of Cleveland Cliffs if they wished to maintain their involvement in related official matters.

The report concludes that while it’s rare for the committee to recommend stock sales over possible conflicts of interest, Rep. Kelly, given his position, holds “insider” status concerning Cleveland Cliffs.

In response to the Ethics Report, Kelly stated that the investigation has persisted for years while Cleveland Cliffs Butler Works faced uncertainty due to the Biden administration’s energy policies. He claimed to have been advocating for the plant’s 1,400 employees throughout the process and mentioned that he engaged with those workers.