Friday, June 20, 2008

MN-02 : Does John Kline put his money where his mouth is ?

Republican Congressman John Kline (MN-02) wrote “Some say America has an addiction to oil. What is abundantly clear is our addiction to foreign oil, which is not only an economic issue but also a national-security concern.”

This view is echoed by Republican-endorsed First District candidate, Dr. Brian Davis with the warning that “If you’re like me, knowing that our economy is partly dependent on countries like Venezuela, Nigeria, and Saudi Arabia is troublesome. Just imagine the potential disastrous consequences if several of these countries were to cut off our supply of oil.”

For these Republicans, the message being sent is that America is in peril as too much of our oil comes from countries whose governments may not be reliably friendly to the United States.

Interestingly, MinnPost reviewed the Financial Disclosure statement of these candidates and reported
“Rep. John Kline reported assets between $253,000 and $720,000, including a Russian investment fund valued between $1,000 and $15,000.

Dr. Brian Davis, who reported a salary of $411,720 in 2007. His wife also received a salary from the Mayo Clinic totaling $52,009.31 in 2007. Davis holds between $2000 and $30,000 in Pfizer stock. Overall, his assets total between $244,000 and $710,000.”

Dr. Davis owning stock in a US headquartered pharmacetical company would not be surprising. Many people’s investment strategy is based on Peter Lynch’s principle of investing in companies that are intimately familiar.

But why would John Kline make an investment in ING Russia Fund ? The ING Russia Fund is composed of 47.8% investment in the oil and gas industry. Once again, many people’s investment strategy includes global investments … not a bad strategy considering the weak US dollar. But Russia ? An investment that is tied exclusively to a single country ?

Admittedly, Russia is not officially in the “Axis of Evil” but since Kline likes to remind voters that during the Cold War, he carried the “nuclear football” that contained the President's launch codes used for nuclear attack, it is surprising that it is where he would make a direct investment.
Yet, he did.
On September 12, 2006, Congressman Kline sold two mutual funds and purchased a number of other funds including the ING Russia Fund.
Once again, a good move to re-position your investments.
But why Russia ?
The dollar amount of his investment is immaterial, it's the message that he values investments in Russia over US or other countries.

Russia and America have a number of disagreements – from the US plans to deploy interceptor missiles in Poland and a radar system in the Czech Republic to Russia’s stance at sanctions against Iran.
Yet, Davis’ warning has been used by Russia. Moscow's sudden cut in gas to Ukraine this winter was Russia using energy as a lever, a weapon or, in Vice President Dick Cheney's words, "a tool of intimidation and blackmail".

It's not just Saudi Arabia that supplies America's oil --- many countries do. As Mexico's productions slow, Russia has increased its shipments to America. What they do with American dollars could be what Congressman Kline means when he raises the fears of "a national-security concern.”

I ask again, WHY does John Kline wish to invest his money in Russia ? It’s his right, but quite surprising.

Then again, maybe Kline is planning for his “retirement years.” After all, as the Rochester Post Bulletin reported on November 28, 2007, former First District Congressman Gil Gutknecht “ serves as a consultant or is involved with six different companies, he said. He is also involved in conducting market research in Russia and drops hints about an energy deal in the works that could make headlines in the Wall Street Journal.” Ah, I guess there is always a career for Congressman after they leave office.

I suppose the lesson is that we should consider diversifying our portfolio from American companies to the ING Russia Fund. After all, Congressman Kline is an advocate of privatizing Social Security, so maybe it’s follow the leader time.

And a sidebar comment about Dr. Davis.
Voters, such as me, must wonder why someone would want take a pay cut of over $240,000 ?
Will he work for Middle Class working families or vote to maintain low tax rates for the doctors and others in the "country club crowd" ?
Would his votes embrace PAYGO, as Congressman Tim Walz advocates, or will his votes reflect increasing the national debt ?


Anonymous said...

Good post, MC.

I live in Eagan and I'm quite ready for the franking window to close. Kline is sending out propaganda like crazy to make up for absentee representation.

Ollie Ox said...

Even more interesting question: Will Davis treat being U.S. representative for Southern Minnesota as a part-time job? Will he continue to practice medicine while relying on robo-teletown meetings and the other devices of absentee representatives to fake contact with his constituents?