PITTSBURGH — The Office of Congressional Ethics is recommending subpoenas for congressman Mike Kelly and his wife — and further investigation into a big stock buy she made.
According to a report released today, the ethics review centers around Victoria Kelly’s purchase of between $15,000 and $50,000 of Cleveland-Cliffs stock in spring 2020.
The report says the stock purchase came the day after congressman Kelly’s office learned the federal government would step in and potentially help Cleveland-Cliffs keep the Butler Works plant open.
Kelly, a Republican, represents Butler.
According to the report from the Office of Congressional Ethics, neither Kelly nor his wife cooperated with the initial review.
Rep. Mike Kelly was raised in Butler, Pennsylvania, currently resides there with his wife, Victoria Kelly, and represents the citizens of Butler in Congress.12 Butler is home to Butler Works, an AK Steel-owned steel plant that employs approximately 1,400 individuals from Rep. Kelly’s congressional district and is an integral part of the Butler economy.13 18. AK Steel is the only remaining domestic producer of grain oriented electrical steel, a type of steel used in U.S. power grid transformers. 14 Because GOES is an essential component of the U.S. power grid, the ability to domestically produce GOES has national security implications.1
In early 2020, in anticipation of its pending acquisition of AK Steel, Cleveland-Cliffs Inc. threatened to close AK Steel’s Butler, Pennsylvania, and Zanesville, Ohio, plants unless the U.S. government intervened and either extended existing Section 232 steel tariff protections to transformer lamination and cores — GOES-based steel products used in power grid transformers17 — or instituted stand-alone Section 232 tariffs for GOES products used in the transformer supply chain. 1
According to Cleveland-Cliffs’ CEO, without government intervention in the form of additional Section 232 tariffs, the Butler and Zanesville plants would remain unprofitable and would need to be shuttered. 22
In the wake of Cleveland-Cliffs’ threat to shutter its electrical steel operations in Butler, Pennsylvania, and Zanesville, Ohio, numerous members of the Pennsylvania and Ohio House and Senate delegations — including Kelly — actively lobbied the Trump administration to take action on Cleveland-Cliffs’ behalf. 28 Likewise, Cleveland-Cliffs urgently lobbied the Trump administration for Section 232 relief. 29 These lobbying efforts culminated in April 2020, just as the COVID-19 pandemic took hold in the U.S. and began consuming much of the federal government’s attention.
On April 28, 2020, the Department of Commerce agreed to take action in support of AK Steel.31 On that day, Secretary of Commerce Wilbur Ross called Cleveland-Cliffs’ CEO and advised him that the Department of Commerce intended to announce publicly in the near future that the Department would be self-initiating a new Section 232 investigation covering transformer laminations and cores.32 Cleveland-Cliffs, as owner of the last remaining domestic producer of GOES, AK Steel, could potentially benefit from the results of the investigation. Given the Department of Commerce’s decision, Cleveland-Cliffs opted not to close the Butler and Zanesville plants.33 24. Kelly’s staff was apprised of these developments on April 28, 2020, by both Cleveland-Cliffs and a senior Commerce Department official. 34 25. The day after Kelly’s office learned about these developments, Victoria Kelly purchased between $15,001 and $50,000 of stock in Cleveland-Cliffs.35 As discussed in more detail below, the timing of this stock purchase suggests that it may have been made based on nonpublic information that Victoria Kelly learned from her husband, Rep. Mike Kelly.
We are reaching out to congressman Kelly’s office for comment.
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