Transparency Foundation Investigation Reveals How Some Politicians Profited from Covid-19 Lockdowns

This was originally posted on The Transparency Foundation website

San Diego County Supervisor Nathan Fletcher supported Covid-19 lockdowns — all the while trading and personally profiting from stock trades in companies that benefited from lockdowns. Fletcher’s behavior raises serious conflict of interest questions that need to be answered.

During the early days of the Covid-19 pandemic, a bitter debate raged on whether broad-based lockdowns of the economy would bring benefits that were worth the costs. That debate may never be fully resolved — though evidence is mounting that the lockdowns were largely ineffective in combating the spread of Covid-19.

However, critics of Covid-19 lockdowns have long wondered whether politicians supported draconian Covid-19 lockdowns for political or personal reasons.

Conflict Watch, a standing program of the Transparency Foundation, advocates for strong disclosure rules to combat self-dealing and conflicts of interest in public institutions. From campaign finance to personal finance, the program advocates that the public has a right to know how leaders of a public institution may personally benefit from decisions being made.

In 2021, Conflict Watch received a complaint from a resident of San Diego County that alleged that the chairman of the San Diego County Board of Supervisors, Nathan Fletcher, had potentially profited personally from his policies related to Covid-19.

The Transparency Foundation’s Conflict Watch initiated an investigation in late 2021 to examine the allegations against Fletcher, which included filing a demand for records from Fletcher’s county supervisorial office in November 2021. Unfortunately, Fletcher has steadfastly refused to comply with our records request under the California Public Records Act (CPRA) and we have retained legal counsel to litigate the matter.

Notwithstanding Fletcher’s illegal refusal to cooperate with the investigation, we have been able to utilize records already in the public domain to determine one potential conflict of interest by Nathan Fletcher on this matter.

Based on a simple review of news coverage, Board meeting minutes, and press materials distributed by Fletcher’s office, we determined that Nathan Fletcher backed some of the most extreme views and policies on Covid-19 lockdowns in the country.

Fletcher advocated for substantial limitations on personal freedoms, sweeping lockdowns of wide swaths of the economy, and aggressive condemnations of violators of his county Covid restrictions. Fletcher also used San Diego County policy decisions to promote a national narrative favoring more restrictive Covid-19 policies.

Under California law, every year elected officials and public employees who make or influence government decisions must submit a Form 700 Statement of Economic Interest detailing, among other things, their personal finances, income, real estate, and stock holdings, etc.

The Transparency Foundation obtained a copy of Fletcher’s Form 700 from 2020, which details Fletcher’s investment in multiple stocks in March and April 2020 — at the beginning of the pandemic.

Our investigation has uncovered evidence that Fletcher seems to have engaged in suspicious stock trades during the early period of the pandemic in companies that would benefit from Covid-19 lockdowns — and then aggressively supported such lockdowns as a matter of public policy.

During early 2020 as the pandemic started, Fletcher and his wife (former State Assemblywoman Lorena Gonzalez) invested between $32,000 and $160,000 in the following companies:

  1. Zoom: a teleconferencing service that benefited from increased remote working conditions.

Fletcher bought this stock on 4/6/2020 at $113.63. Sold on 6/3/2020 at $223.87 for a 97% profit.

  • CVS health: a health products retailer and Covid test provider that benefited from increased health product purchases.

Fletcher bought this stock on 3/19/2020 at $56.80. Sold on 6/3/2020 at $87.06 for a 53% profit.

  • LHC Group, Inc: a hospice and home healthcare company that benefited from an increased need for at-home healthcare solutions.

Fletcher bought this stock on 3/19/2020 at $113.91. Not sold as of 2020 report, valued today at $136.17 for a potential 20% profit.

  • Chemed: a health center that benefited from increased reliance on health solutions and providers.

Fletcher bought this stock on 3/19/2020 at $360.50. Sold on 8/27/2020 at $510.77 for a 42% profit.

  • Apple: a technology and computer company that benefited from an increased need for reliable at-home personal computers.

Fletcher bought this stock on 4/6/2020 at $62.72. Sold on 6/3/2020 at $81.28 for a 30% profit.

  • Hormel: a packaged food company that benefited from increased purchases of nonperishables.

Fletcher bought this stock at 4/6/2020 $48.68. Sold on 6/3/2020 at $47.67 for a 2% loss. 

  • Cisco: a telecommunications and networking technology company that benefited from increased online and digital reliance.

Fletcher bought this stock on 4/6/2020 at $40.46. Sold on 6/3/2020 at $46.94 for a 16% profit.

  • Ball Corp: an aerospace company specializing in packaging and storage solutions that benefited from increased time-spend at home and reliance on packaged foods.

Stock bought on 4/6/2020 at $64.10. Sold on 6/3/2020 at $73.95 for a 15% profit.

Critics of Fletcher will raise the following conflict of interest concerns about his stock trades:

  • During March through June 2020 when most of these stock trades were made, Fletcher received daily private briefings from county staff on the progression of the pandemic by virtue of his membership on a Board subcommittee on Covid-19. Did Fletcher have access to information that was not readily available to the public regarding Covid-19 that would help inform his stock trading? 
  • All of these companies directly benefited from Fletcher’s lockdown policies. Moreover, days after selling his stock positions in many of these companies, Fletcher announced the loosening of lockdowns for San Diego County. Did Fletcher’s personal financial positions influence his decision making regarding lockdowns? 

Supporters of Fletcher will argue he has a right to trade in stock like any other member of the public  and that his stock trades were common-sense moves that any reasonably informed investor would have made during a pandemic.

We may never fully know which side is right — particularly in light of Nathan Fletcher’s refusal to comply with the California Public Records Act request we filed.

Yet the problem remains: there clearly exists either a real or perceived conflict of interest of Nathan Fletcher trading and profiting from Covid-19 stocks while taking more extreme policy positions on Covid-19. The result is a loss of public trust and confidence in Nathan Fletcher regarding his handling of Covid-19 — and public decision makers writ large.

Matt Stockton, Treasurer of the Transparency Foundation, says the findings of the Conflict Watch investigation raise serious conflict of interest concerns that need to be addressed.

“Stock trades like these can undermine public trust and confidence in their elected officials and Supervisor Nathan Fletcher at least has a lot of explaining to do,” said Stockton.

Stockton said the Conflict Watch investigation into the Fletcher matter is simply an example of a much larger problem nationally of the public questioning whether politicians and government officials benefited personally from Covid-19 policies.

That’s why in the coming months the Transparency Foundation will continue to examine potential conflicts of interests related to Covid-19 policies — and the individuals that supported the policies.

“We shine a light on how elected officials may be profiting or benefiting personally from policy positions they take while in office — and this kind of allegation has been made across the country against federal, state and local officials who have been particularly aggressive in supporting draconian policies such as lockdowns during the Covid-19 pandemic,” said Stockton. “Our question is if a policy seems extreme or doesn’t follow the science, is there another factor at play like personal or political benefit?” he asked.

View Nathan Fletcher and his Spouse’s Form 700s



Learn More: Conflict Watch — A Program of the Transparency Foundation 

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About The Transparency Foundation:

The Transparency Foundation is a 501c3 nonprofit, nonpartisan organization committed to making public institutions more transparent and accountable to the people they serve.

ConflictWatch, a standing program of the Transparency Foundation, advocates for strong disclosure rules to combat self-dealing and conflicts of interest in public institutions. From campaign finance to personal finance, the public has a right to know how leaders of a public institution may personally benefit from decisions being made.