In the News: Blog

What we actually told NBC News before they trotted out a Democrat group’s smear

An NBC News reporter, Heidi Przybyla, was used as a conduit July 29 for a new Democrat attack on Sen. Ron Johnson after he didn’t cave in to earlier Democrat pressure to stop looking into possible foreign interference in the 2016 election.

In it, Przybyla amplified Democrats’ recycling of previously debunked claims around Senator Johnson’s sale of his last interest in his family’s Oshkosh manufacturing company. She cited a short dossier of talking points from a new Democrat dark-money group calling itself the Congressional Integrity Project, and Przybyla quoted from the group’s top operative, Kyle Herrig, who insinuated that there was something untoward about the senator selling his 5% share in the manufacturing company.

There wasn’t anything untoward, even according to people often critical of Senator Johnson. “I criticized WI Sen. Ron Johnson after reports tonight of his large stock sale were lumped in with reports of other senators selling in dubious circumstances. But the details of Johnson’s sale are different from those of the others. I withdraw the criticism; it’s unfair to him,” wrote journalist John Nichols of the Nation on Twitter. Dan Primack wrote on Axios that it “was a vanilla private equity deal that was negotiated before almost anyone had heard of coronavirus.”

The deal, announced Feb. 11, 2020, had been in the works since 2018. Under it, a private equity firm, Gryphon, invested in Senator Johnson’s company, in the process buying the senator’s share. Other members of the senator’s extended family will remain significant owners. They will continue managing it, as they have done since Senator Johnson gave up any managerial role after being elected to the Senate in 2010.

Przybyla asked questions about the sale and about the senator’s other assets — which are publicly disclosed in accordance with Senate rules — and the senator’s staff provided detailed answers and a follow-up briefing to Przybyla. In the interest of transparency, those details are provided here for the public.

Przybyla asked for comment to her claim that “Johnson’s stake in the company increased by millions from 2017 to when he sold it in 2020.” She’s referring to the disclosure of the sale — available here — as being “between $5,000,001 and $25,000,000.” Senate disclosure forms require asset values and sale prices to be reported as within broad brackets, not in exact amounts. The senator’s share of the company had been reported every year as being worth between $1,000,001 and $5,000,000 — the applicable category. When the senator sold the share, its value had risen enough to push it over the line into the next higher category.

Przybyla was told that when the senator’s full 2020 disclosure is made public, the sale will not result in an increase in his net worth — because the proceeds will not be sufficient to increase the money market account into which he deposited them into a higher bracket. The likely effect is a drop in reported net worth as the share in his family’s company comes off the tally.

Przybyla didn’t include this. But because of the breadth of the categories, she was able to get a source to assert, without evidence, that it was “a very big sale.”

Przybyla asked why, if the share sold for more than $5 million, it had been reported as worth between $1,000,001 and $5,000,000 for years. She was told the simple reason: It was a share in a privately held family company — one without regular sales of shares to reveal any change in the value of the company. The value of companies with publicly traded stocks are discovered daily by the price at which shares trade. But Johnson’s company had been held since he bought it back from an outside owner in the 1990s, so there had been no market test of what the share was worth. The $1-$5 million figure was a best estimate according to disclosure rules’ requirements.

Przybyla asked why the senator hadn’t put his share of the company in a “blind trust,” and she claimed without evidence in her story that he had promised to do so in his 2010 campaign. She cited only a July 9, 2010 press release from Johnson’s campaign saying he “is taking steps to move financial assets” to such a trust.

Przybyla was directed repeatedly to the step the senator took instead in 2010 and 2011 to sell off all publicly traded stocks he owned and shift the proceeds into cash forms, such as money market accounts. A blind trust conceals from its holder the identity of the shares in it so that a politician cannot know he has an interest in policy affecting a company. Not having shares in publicly traded companies but only in cash form goes a step farther, although it came at the cost of lower returns: The Dow Jones index opened in 2011 at 11,671, and closed at 24,719 at the end of 2017. By staying in cash over that period, Senator Johnson knowingly and willingly missed out on the 112% market increase.

Przybyla then asked why Senator Johnson didn’t put his share of his family’s company, which he no longer managed, into a blind trust. It was explained to her that his knowing that the trust contained a known share of his own family’s company would defeat the fundamental point of a blind trust. She seemed not to grasp the point.

Przybyla asked about the senator’s small share in DP Lenticular, an Irish company; she seemed to have been told by Democrats that it was suspect. Johnson’s staff informed her that the senator’s share, worth between $250,000 and $500,000 every year he’s been in the Senate, was an investment to establish a sales agency for products that his company manufactured in Oshkosh and exported to Europe. “I have small investment, primarily so I can see the financial information,” he told a reporter in 2016. Far from serving as a “shelter” for income, as Przybyla insinuated, the senator earned no returns on his investment or any income aside from a de minimus dividend that amounted to less than $5,000 in 2018.

One of Przybyla’s most remarkable questions stemmed from her reliance on the Center for Responsive Politics’ Open Secrets website, which attempts to calculate politicians’ net worth off their public financial disclosure forms. Przybyla asked how Senator Johnson’s “net worth, according to the nonpartisan Center for Responsive Politics, (jumped) from $24 million when he was elected in 2010 to $78 million in 2018? (considering he sat out the market?)”

She was given the straightforward answer: It didn’t. Open Secrets was wrong when it reckoned the senator’s net worth, and wrong when the Democrat attack group fed Przybyla the story idea.

Remember that financial disclosures report the value of assets as falling with ranges. Open Secrets adds up the minimum values of each asset and the maximum values, reports the totals and estimates a politician’s net worth as the average of the two. Przybyla’s claim about how much Senator Johnson’s net worth “jumped” is based on Open Secrets’ erroneous estimate of his assets’ value (see it here) as “totaling $28,202,028 to $128,732,000 in 2018.” The midpoint of these figures is $78 million, the figure Przybyla asked about.

But Open Secrets’ tally of the senator’s assets was wrong: The Center for Responsive Politics double-counted many of his assets, using slightly different names. The center, or Przybyla, could have seen this if they compared the tally to the senator’s filed disclosure forms, which Open Secrets even offers, here.  

But they didn’t.

The result of Open Secrets’ screw-up, which they quietly have corrected, was to overstate the senator’s net worth by a factor of two. The website did the same double-counting mistake on at least some of his assets in 2017 (see here), and has quietly corrected that, too.  

The result? The Center for Responsive Politics’ estimate of Senator Johnson’s net worth is not far above what it was the year he first took office. It is in fact in the same range it has been since he was elected. This means that Przybyla’s claim that the senator “is likely to have increased his wealth anywhere from 50 percent to 100 percent since he took office” is simply wrong according to the source she goes on to cite.

Przybyla was misled by the Democrats’ dirt-digging group that fed her the story.

This should not be surprising. Senator Johnson and his partner in investigating possible corruption surrounding the 2016 election, Sen. Chuck Grassley, called out this week the Democrats’ concerted smear campaign meant to derail the investigation.  

Johnson told the Washington Examiner that the attacks won’t deter him. “National Democrats and the Biden campaign have now escalated their rhetoric in what appears to be an attempt to silence our investigation,” he said. “These attacks will not deter me, but serve to only increase my curiosity. What are Democrats afraid I might find?”

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