A freshman Congressman close to the Pentagon’s now-defunct $10 billion cloud computing deal with Microsoft apparently dumped stock in the company shortly before the contentious contract went belly up weeks ago.
Rep. Pat Fallon, of Texas, recently sold off as much as $250,000 of MSFT stock, only weeks before the Joint Enterprise Defense Infrastructure deal between America’s military establishment and the tech giant was abruptly called off, public disclosures forms show.
Problematically, Fallon also serves on the committee that was tasked with overseeing the deal. The House Armed Services Committee’s new subcommittee on Cyber, Innovative Technologies, and Information Systems is in charge of the Defense Department’s “tech spending” and has been responsible for “keeping a close eye on” on JEDI—which would’ve seen the migration of massive amounts of DoD data to a commercial cloud system and was the subject of intense corporate competition.
Last September, the Pentagon announced Microsoft would be handling the contract but subsequently reversed itself in July, claiming that the deal would be canceled due to shifts in the DoD’s needs.
We reached out to Rep. Fallon’s office with a request for comment and a spokesperson provided us with the following statement:
“Congressman Fallon had absolutely no prior knowledge the Pentagon intended to cancel the JEDI contract. Any accusation that Congressman Fallon acted inappropriately with his routine stock transactions is wildly speculative and has no foundation in truth. We challenge anyone to bring one shred of actual evidence to back up this ridiculous accusation.”
Fallon has argued that the selling of the stock was basically just dumb luck, since the stock he owned was part of an option call—a transaction in which he had bought $250,000 in MSFT shares on May 26 before selling the “rights to other investors to purchase at a later date,” Salon reports. Those investors subsequently decided to buy Fallon’s shares on June 21, which forced him to sell off his position in the tech company. It just so happened that this occurred a couple of weeks out from JEDI’s untimely demise. ¯\_(ツ)_/¯
However, the allegations aren’t the only financial issues Fallon is currently dealing with. He also recently caught flack for failing to properly disclose millions of dollars in stock trades—causing some to wonder whether he would face ethics violations. When the news broke, a spokesperson for Fallon claimed he was “unfamiliar with how frequently members of Congress are required to file financial disclosures.”