Virginia Democratic Senate candidate Edythe C. Harrison suggested today that Republican Sen. John W. Warner may have improperly used "advance information" gained as a member of the Senate Armed Services Committee to profit from a defense industry stock purchase in 1983.
A later report from Warner's staff showed that he actually lost money on the Caterpillar Tractor Corp. stock specifically mentioned by Harrison in her statement.
Harrison also suggested that Warner's holdings and contributions from defense industry political action committees have kept him from investigating waste in Pentagon spending.
Warner, who led the former Norfolk legislator by as much as 42 points in one recent poll on next Tuesday's election, said in a prepared statement that his investments are made without his prior knowledge and that his investment firms are told to "avoid investments whenever possible" in defense industries.
A spokesman for Warner, a multimillionaire, flatly denied Harrison's suggestions and said the innuendoes were part of her "increasingly shrill style of campaigning -- a style that has no limits." Warner's staff noted that all of Harrison's information came from a public disclosure form filed last May.
Harrison, who declined to specifically accuse Warner of wrongdoing, issued a lengthy statement in which she said Warner began purchasing defense industry stocks in 1983, including stock in Caterpillar with a value of between $15,000 and $50,000, according to Warner's public financial disclosure statement.
Harrison said Caterpillar before 1983 had not been in the top 100 defense industries but "jumped to number 62" that year.
Warner's staff later reported that the Washington brokerage firm of Johnston, Lemon Inc. bought 1,000 shares of Caterpillar stock on April 28, 1983, for $45.75 per share and sold it nearly four months later for $40.50 a share, a loss of $5,250.
Told that Warner had lost money on the stock, Tim Harrison, the challenger's son and campaign director, said, "the issue is not whether Mr. Warner obtained a short-term gain or a short-term loss, the issue is his independent judgment and ability to curb mismanagement and waste that plague the defense procurement system."
"As a member of the Armed Services Committee, did Mr. Warner obtain any advance information about Caterpillar that influenced his decision to buy a large block of its stock?" Harrison asked at the earlier news conference here.
Such use of information possibly could violate Senate ethics and Securities and Exchange Commission regulations, according to officials. "I don't know the answer to these questions," Harrison said. Pressed by reporters to explain whether she was suggesting that Warner may have violated the law or engaged in improprieties, Harrison said, "I am raising the question . . . anything is possible."
Harrison said she had "raised very serious questions" about Warner's leadership but later said "I am not talking about legal violations."
"One of the chief issues is . . . can you be independent as a member of the Armed Services Committee . . . can you investigate the very corporations that are cheating the American taxpayers when you are receiving political action contributions from the these corporations and when you are holding stock in these corporations? That is the question."
Harrison today said Warner owns stock in such firms as IBM, Dupont and Lockheed and that during 1983 Warner engaged in stock transactions valued from $250,000 to $565,000 and that his holdings include Lockheed stock valued at $5,000 to $15,000.