Embattled FBI Director Kash Patel is being accused of breaking the law after failing to properly report a six-figure purchase of stock in a crypto company that has received millions of dollars in government contracts through the Justice Department.
According to NOTUS, Patel, 46, purchased between $100,001 and $250,000 worth of stock in MicroStrategy, a “bitcoin treasury company,” on Nov. 21.
He did not disclose the trade with federal regulators until May 26, well past the 45-day deadline required for reporting stock transactions over $1,000 under the Stop Trading on Congressional Knowledge Act.
In a letter sent to the Office of Government Ethics that day—more than 180 days after purchasing the stock—Patel said that he “inadvertently omitted” the trade from an earlier disclosure filing.
Under the Stop Trading on Congressional Knowledge Act, first-time violators face a $200 penalty. But the DOJ, which would be responsible for issuing fines for STOCK Act violations, has yet to do so in Patel’s case, an FBI official familiar with the matter told NOTUS.
Dylan Hedtler-Gaudette, acting vice president of policy and government affairs for the nonpartisan watchdog organization Project on Government Oversight, said Patel was “absolutely” late in disclosing his stock purchase.
“That’s violating the law—no other way to put it,” Hedtler-Gaudette told NOTUS.
In a statement, the FBI told NOTUS that “once the mistake was discovered,” Patel filed the amended disclosure report, and that it has since been approved by a DOJ ethics official.
Neither the DOJ nor the FBI immediately responded to a request for comment from the Daily Beast.
MicroStrategy, which says it aims to “strategically accumulate bitcoin and advocate for its role as digital capital,” is led by Michael Saylor, a longtime friend of President Donald Trump’s son Eric Trump, and a key crypto ally to the president, according to Fortune.
The company has pulled in millions of dollars over the years through contracts with the DOJ, of which the FBI is a part, as well as other federal agencies, including the Department of Health and Human Services, the Defense Department, and the State Department.
Since Patel bought in last year, however, MicroStrategy stock has shed roughly half its value.
Deputy Assistant Attorney General William Taylor defended Patel in a May 28 letter to the Office of Government Ethics, writing that Patel had stated in his letter that the stock purchase had been omitted due to “a miscommunication.” In fact, Patel did not detail such a miscommunication in his letter.
Taylor claimed that Patel’s personal stake in MicroStrategy does not represent a conflict of interest with his role overseeing the FBI.
“I continue to believe that Director Patel is in compliance with applicable laws and regulations governing conflicts of interest,” he wrote.
Many government watchdog groups and some lawmakers have called for a ban on federal officials trading individual stocks over concerns about conflicts of interest and insider trading.
More than 30 members of Congress were late in filing STOCK Act disclosures over the past year, according to NOTUS.
