FBI Director Kash Patel has personally invested a six-figure sum in U.S. computer technology interests at a time when his department is cracking down on suspected China-connected computer and cyber crime.
Patel disclosed purchasing $50,001 to $100,000 worth of stock in defense contractor American Superconductor Corp. on July 30, according to a new financial disclosure report reviewed by The Washington Sun.
He also reported investing $100,001 to $250,000 in the Direxion Daily Semiconductor Bull 3X Shares fund. (Government officials are only required to disclose the values of their trades in broad ranges.)
This exchange-traded fund is “triple leveraged” on the success of the top 30 U.S. semiconductor and chip companies, including Nvidia, which recently contributed $25 million to President Donald Trump’s White House ballroom project. Trump this month awarded Jensen Huang, Nvidia’s CEO, the nation’s highest honor for scientific achievement.
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In recent weeks, the FBI has seized “platforms operated and used by China state-sponsored hackers” and arrested a California man on suspicion of smuggling to China over $300 million worth of “high-end computer servers containing U.S.-manufactured graphics processing units” commonly used in artificial intelligence applications.
“The National Security Division will protect the American advantage in the chips that power this technology, a product of our unparalleled innovation and hard work, from illegal diversion by our economic and military adversaries,” Assistant Attorney General for National Security John A. Eisenberg said earlier this month.
In a statement to The Sun, the FBI said Patel’s investments are “fully compliant with all Department of Justice rules and regulations. Reporting is done as per the filing instructions.”
In his disclosure filing, Patel told the Office of Government Ethics that “no current conflict exists” with his American Superconductor Corp. investment, but “recusal or divestiture will occur should one arise.” The FBI described Patel’s representation to ethics officials as “standard protocol.”
Patel told the OGE that he was “voluntarily” reporting his Direxion Daily Semiconductor Bull 3X Shares investment ahead of schedule. Outside of an annual financial disclosure report due each May, executive branch officials are not required to immediately disclose when they buy or sell exchange-traded funds — just individual stocks, bonds, cryptocurrencies and other similar investments.
Dylan Hedtler-Gaudette, acting vice president of policy and government affairs at nonpartisan watchdog group Project on Government Oversight, said it’s “peculiar that OGE and/or agency ethics officials wouldn’t be advising against those kinds of transactions” because the stock ownership gives the appearance of a conflict of interest “at minimum.”
“It could speak to a broader sort of chilling effect or a lax approach to the ethics framework broadly in the administration right now,” Hedtler-Gaudette said.
Massachusetts-based American Superconductor Corp., commonly known as AMSC, does business in a range of industries, including power grids, wind turbines and data center support. It has done much of its government-related business with the U.S. military, according to federal contracting records.
Last decade, the FBI investigated Chinese wind turbine company Sinovel Wind Group LLC, which U.S. officials accused of stealing from American Superconductor Corporation.
Sinovel was “convicted of conspiracy to commit trade secret theft, theft of trade secrets, and wire fraud” causing more than $550 million in losses, according to the Department of Justice.
The theft spurred Trump, then in his first term, to bring the U.S. to the brink of a trade war with China.
“The outcome of this case is a victory for the rule of law. We welcome the opportunity to work with the Trump Administration to ensure that American companies’ intellectual property rights are respected and protected throughout the world and to hold those who steal accountable,” American Superconductor Corp. wrote in a statement after the trial’s conclusion.
The stock price of American Superconductor Corp., which did not respond to a request for comment, has tripled during the past three years, according to Yahoo! Finance.
Patel has routinely traded stocks while leading the FBI.
This summer, he violated the STOCK Act by failing to properly disclose an investment in MicroStrategy — now known as Strategy — a company that frequently contracts with the Justice Department.Last year, Patel invested in donut company Krispy Kreme around the same time the FBI was investigating a ransomware group over allegations that it breached Krispy Kreme’s data systems.
In an ethics agreement signed before his confirmation, Patel vowed to “avoid any actual or apparent conflict of interest.”
Patel is hardly the only official in the Trump administration to regularly trade individual stocks.
Dan Scavino, Trump’s deputy chief of staff, recently earned seven figures from his stock holding in Trump’s media company, joining Karoline Leavitt and her family, who disclosed shares in Trump Media as well as shares in defense contractors, Tesla and tech companies.Trump himself has made thousands of individual stock and bond trades in recent months.
“People in government shouldn’t be playing the stock market, because there’s always the increased possibility or increased potential of them having sort of access to non-public information that the rest of us don’t,” Hedtler-Gaudette said. “There just needs to be a flat across-the-board ban.”
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