Former House Speaker Nancy Pelosi bought stock in initial public offerings (IPOs) that earned hefty returns while she had access to insider information that would have been illegal for an average citizen to trade with – even though it’s perfectly legal for elected officials, CBS’s "60 Minutes" reported Sunday night. (emphasis added)It is not illegal for members of congress to do things that would get any of us put in jail. For example, billionaire Martha Stewart spent time in federal prison for lying to the FBI over insider trading worth about $100,000. To put that in perspective, scale her billion dollar worth down to $100,000, and divide that insider trading $100,000 by the same amount and you'll find she spent five months in federal prison over the equivalent of $10 to a more normal income. In comparison, Nancy Pelosi in just the one case she was asked about on 60 Minutes benefited from insider information to the tune of $100,000, yet it was perfectly legal.
In an interview, Schweizer tells the story of the tumultuous days in 2008 before the TARP funds were allocated. A Newsweek interview puts it this way:
Republican Rep. Spencer Bachus, of Alabama... was known in the House as a guy who liked to play the market, and in fact he was pretty good at it; one year, he reported a capital gain in excess of $150,000 from his trading activities. More striking is that Bachus boldly carried forth his trading in the teeth of the impending financial collapse, the nightmarish dimensions of which he had learned about first-hand in confidential briefings from Treasury Secretary Henry Paulson and Fed chairman Ben Bernanke. On Sept. 19, 2008, after attending two such briefings, Bachus bought options in an index fund (ProShares UltraShort QQQ) that effectively amounted to a bet that the market would fall. That is indeed what happened, and, on Sept. 23, Bachus sold his “short” options, purchased for $7,846, for more than $13,000—nearly doubling his investment in four days.Again, if you or I did that, we'd be spending time behind bars with bad men, but for them, it's not illegal. Neither Bachus, nor Pelosi, nor Boehner, nor John Kerry or any of them violated any laws or ethics rules. Although Nancy might want to be behind bars with bad men - I don't know.
Around the time Congress and the Bush administration worked out a TARP bailout, Bachus made another options buy and again nearly doubled his money.
And that's just part of the problem. They also get rich on land deals, and the crony insider deals we already hear about. Solyndra and the rest of the green energy scandals are the system working backwards - they make other people rich in thanks for contributing to their campaigns.
In the wake of the story, Joe Lieberman and Scott Brown have introduced a bill into the Senate to make them live by the same rules we do. In the house, Louise Slaughter, and Tim Walz, have done the same. It seems likely to me that these bills will pick up additional sponsors but, of course, are in danger. Such bills have been introduced before and they've always been blocked - Brian Baird of Washington was the last one to seriously push this kind of legislation. They see no reason to have to live like the common people.
Throw Them All Out is non-partisan, as the "All" in the title implies. In the 1992 election, when Ross Perot's siphoning off of GOP votes gave Bill Clinton the presidency, there was a movement called THRO - Throw the Hypocritical Rascals Out. It appears to be growing legs again. Meanwhile, Borepatch has been saying this for a long time. If you haven't gotten the message, read it again.