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A few weeks back Roll Call had a story (not available online) reporting that Congressman Pete Hoekstra of Michigan, the top Republican on the House Intelligence Committee, had recently reported an interesting stock market transaction on his personal financial disclosure form. In 2006, the newspaper said, Hoekstra:
had purchased stock in Interoil Company in a transaction valued from $1,001 to $15,000. He also reported that seven months later, he sold Interoil stock in a transaction valued in the same range. Historical stock tables indicate that the value of Interoil stock jumped almost $10 per share during that time period, and Hoekstra’s purchase and sale appear to have netted a profit somewhere from $675 to $9,875. That profit should be, but is not, listed on Hoekstra’s income tables. Hoekstra’s office did not return calls seeking an explanation for the omission.
This is extremely interesting for a number of reasons, some which were not explored in the Roll Call story. For example, as I recently wrote here, Interoil itself is a small, murky firm that once:
bought an Alaskan oil refinery from Chevron and shipped it 6,000 miles away to Papua New Guinea. Back in 1997, a subsidiary of Enron bought a big stake in InterOil, and two years later the firm got an $85 million loan from the Overseas Private Investment Corporation (OPIC)–a fraction of the $2.2 billion that Enron and Enron-linked firms sucked out of OPIC in loans and insurance.
One of InterOil’s investors and directors is Gaylen Byker, the president of Calvin College in Grand Rapids, Michigan. In 2005, President Bush delivered their commencement speech. Byker is also a generous donor to G.O.P. candidates and causes. Including Congressman Hoekstra, to whom he gave two small contributions ($250 each), in September of 2006 and November of 2007.
Now let’s take a closer look at Hoekstra’s profitable trading in Interoil stock. The company began trading in the U.S. in the fall of 2004. Hoeckstra bought his (undisclosed number of) shares on April 17, 2006. The share price closed that day at $14.01, not far above its lowest ever close of $13.12 in late March of that year.
Hoekstra didn’t hold onto his shares for long, selling his position on November 13, 2006. The closing share price that day was $24.25, up an astonishing 75 percent from the closing price when Hoekstra purchased his stake seven months earlier. Indeed, on the very day that the congressman sold his shares, Interoil’s stock price climbed by more than $4 a share.
What caused the price spike that was so beneficial to Hoekstra and other investors? This was the very day that Interoil announced the type of news that investors crave: discovery near its refinery of “a vast pool of natural gas potentially larger than the United States’ total residential consumption of the fossil fuel in 2005. The size of the discovery was so large, Phil E. Mulacek, InterOil’s chairman and chief executive, informed an analyst, that simply controlling its output ‘was sort of like trying to stop the Mississippi’.”
It was that “discovery” that sent Interoil shares soaring and helped Hoekstra turn such a nice profit. However, to this day Interoil has never proven that there are actually any reserves at the site (in fact, Interoil acknowledges in its corporate filings that it has no proven energy reserves, anywhere.) Interoil stock prices continued to climb after Hoekstra sold, but the company has been operating in the red and its share price has come crashing back to earth. The closing price yesterday was $18.45.
It would be interesting to know how Hoekstra–who made just 13 stock trades in all of 2006–picked InterOil to invest in, and how, given his busy congressional schedule, he sold on such an auspicious day.
I’ve called Hoekstra’s office for comment. If I hear back, I’ll update this story.
More from Ken Silverstein:
Perspective — October 23, 2013, 8:00 am
How pro-oil Louisiana politicians have shaped American environmental policy
Postcard — October 16, 2013, 8:00 am
A trip to one of the properties at issue in Louisiana’s oil-pollution lawsuits
For the past three years my dosimeter had sat silently on a narrow shelf just inside the door of a house in Tokyo, upticking its final digit every twenty-four hours by one or two, the increase never failing — for radiation is the ruthless companion of time. Wherever we are, radiation finds and damages us, at best imperceptibly. During those three years, my American neighbors had lost sight of the accident at Fukushima. In March 2011, a tsunami had killed hundreds, or thousands; yes, they remembered that. Several also recollected the earthquake that caused it, but as for the hydrogen explosion and containment breach at Nuclear Plant No. 1, that must have been fixed by now — for its effluents no longer shone forth from our national news. Meanwhile, my dosimeter increased its figure, one or two digits per day, more or less as it would have in San Francisco — well, a trifle more, actually. And in Tokyo, as in San Francisco, people went about their business, except on Friday nights, when the stretch between the Kasumigaseki and Kokkai-Gijido-mae subway stations — half a dozen blocks of sidewalk, which commenced at an antinuclear tent that had already been on this spot for more than 900 days and ended at the prime minister’s lair — became a dim and feeble carnival of pamphleteers and Fukushima refugees peddling handicrafts.
One Friday evening, the refugees’ half of the sidewalk was demarcated by police barriers, and a line of officers slouched at ease in the street, some with yellow bullhorns hanging from their necks. At the very end of the street, where the National Diet glowed white and strange behind other buildings, a policeman set up a microphone, then deployed a small video camera in the direction of the muscular young people in drums against fascists jackets who now, at six-thirty sharp, began chanting: “We don’t need nuclear energy! Stop nuclear power plants! Stop them, stop them, stop them! No restart! No restart!” The police assumed a stiffer stance; the drumming and chanting were almost uncomfortably loud. Commuters hurried past along the open space between the police and the protesters, staring straight ahead, covering their ears. Finally, a fellow in a shabby sweater appeared, and murmured along with the chants as he rounded the corner. He was the only one who seemed to sympathize; few others reacted at all.
Number of U.S. congressional districts in which trade with China has produced more jobs than it has cost:
Young bilingual children who learned one language first are likelier than monolingual children and bilingual children who learned languages simultaneously to say that a dog adopted by owls will hoot.
An Oklahoma legislative committee voted to defund Advanced Placement U.S. History courses, accusing the curriculum of portraying the United States as “a nation of oppressors and exploiters.”
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