Daily Republic: Varilek had shares in Big Oil company he criticizes

By Tom Lawrence

Oct. 3, 2012

Democratic congressional hopeful Matt Varilek has criticized Rep. Kristi Noem for taking campaign donations from “Big Oil,” but he once owned 20 shares of stock in one of the companies he named in an attack on her.

Varilek bought the Valero Energy stock in June 2008 while he worked as an aide to Sen. Tim Johnson. He spent $1,045 for it.

Varilek sold the stock in July 2009 at a loss as the once-raging bull market began its deep decline. He said it was a minor purchase and had no influence in his political views, while the company is sending larger amounts of money to Noem’s campaign.

On Aug. 22, during the candidates’ debate at Dakotafest, he mentioned Valero by name in criticizing Noem for taking about $70,000 in campaign donations from oil companies.

“I’m willing to stand up to Big Oil companies who are the opponents funding the effort to weaken the RFS,” Varilek said at the time, referring to the Renewable Fuel Standard. “My opponent, on the other hand, has taken thousands and thousands — I think something like $70,000 from Big Oil companies like Exxon-Mobil PAC and Valero PAC.”

According to Federal Election Commission records, the Valero Energy Corporation Political Action Committee donated $5,000 to Noem’s campaign on June 30, 2011, and $2,500 to her on July 25, 2012.

David Benson, Varilek’s campaign manager, rejected any claim of hypocrisy.

“Unlike Kristi Noem, Matt has never taken a penny in campaign contributions from Big Oil companies, and he never will,” Benson said in response to questions from The Daily Republic. “Unlike Kristi Noem, Matt has never voted to protect tax subsidies for those same companies. It’s a desperate stretch to say that an investor once owning 20 shares of stock is the same as a member of Congress accepting corporate PAC contributions and doing those companies’ bidding in office.”

While Noem’s campaign suggested Varilek sold the stock before he mounted his campaign, Benson said that was not a consideration, since Varilek sold it more than two years before he began exploring a run for office.

In fact, when he sold it in 2009, Democrat Stephanie Herseth Sandlin held the House seat that Varilek is now seeking.

“The stock fell in value, and he sold to cut his losses,” Benson said.

On Monday, Noem’s staff provided copies to The Daily Republic of Varilek’s Personal Financial Disclosure documents filed with the U.S. Senate in 2009 and 2012 that revealed that investment. Varilek worked for Sen. Johnson from 2005 until 2011; he filed a report this year to report his fiscal information for last year.

The Valero Energy Corp. is based in San Antonio. It refines oil and produces ethanol. The company owns an ethanol refinery in Aurora in Brookings County.

In a statement on its annual report for 2009, the firm said it was “an exceptionally challenging year for Valero and the refining industry.”

A June 18, 2009, USA Today story pointed to the problems Valero was going through at the time, stating “… the stock market’s reaction to Valero Energy’s plans to sell 40 million shares of stock at $18 a share is pretty typical: Negative. Shares of Valero closed at $22.38 on June 2, the day before the company announced the stock sale and said it is likely to lose money in the second quarter. The stock now is trading down more than 20 percent from that level.”