I broke down and wrote my congressman for the first time in my life. What got me so motivated to reach out to Representative Tim Scott of District One in South Carolina? A non-partisan piece by 60 Minutes on the practice of insider trading by members of Congress. Turns out Congress exempted themselves and their staffs from a law that applies to every other citizen in this country. As a result, some members have amassed enormous amounts of wealth and have allegedly passed legislation that helped their stock portfolios while hurting the very people they are supposed to be serving.
Here’s a little tidbit from the story by Steve Kroft:
In mid September 2008 with the Dow Jones Industrial average still above ten thousand, Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke were holding closed door briefings with congressional leaders, and privately warning them that a global financial meltdown could occur within a few days. One of those attending was Alabama Representative Spencer Bachus, then the ranking Republican member on the House Financial Services Committee and now its chairman… While Congressman Bachus was publicly trying to keep the economy from cratering, he was privately betting that it would, buying option funds that would go up in value if the market went down. He would make a variety of trades and profited at a time when most Americans were losing their shirts.
Kroft didn’t just go after Republicans. He went after Democrats, as well. Here’s what he uncovered about Nancy Pelosi:
And former House Speaker Nancy Pelosi and her husband have participated in at least eight IPOs. One of those came in 2008, from Visa, just as a troublesome piece of legislation that would have hurt credit card companies, began making its way through the House. Undisturbed by a potential conflict of interest the Pelosis purchased 5,000 shares of Visa at the initial price of $44 dollars. Two days later it was trading at $64. The credit card legislation never made it to the floor of the House.
This was all sparked by a book titled Throw Them All Out by Peter Schweizer. According to Schweizer’s interview in the piece:
If you were a senator, Steve, and I gave you $10,000 cash, one or both of us is probably gonna go to jail. But if I’m a corporate executive and you’re a senator, and I give you IPO shares in stock and over the course of one day that stock nets you $100,000, that’s completely legal.
It’s a disgusting and blatant example of elected officials putting themselves above the law for their own financial gain, and it has to end. It won’t solve all the problems I currently have with how our government is run, but it will be a major step in the right direction.
Here’s the message I sent my Representative.
I was appalled by the 60 Minutes piece on the insider trading practices by some members of Congress. I understand that the institution of which you are now a member is exempt from the insider trading laws that apply to every other citizen of the United States. You and the other members of congress are allowed to make trades based on non-public information. The practice has made many congressional members extremely wealthy, and some have argued legislation that could have benefited the American people has been jeopardized because votes were cast to protect congressional financial portfolios instead of the people of their district and state.
Whether there are actual improprieties or just the appearance of improprieties, you and every other member of congress cannot possibly establish and hold trust with your constituents. I am asking you to legally end this practice. Help pass legislation that will completely “prohibit members of Congress and federal employees from profiting, or helping others profit, from non-public information—primarily through stock and futures trading—gleaned through their access to privileged, political-based information.” (STOCK Act Reintroduced to Ban Insider Trading by Members of Congress by Representative Louise Slaughter)
This is not a partisan movement. This is a moral movement. Please represent the First District of South Carolina in support and sponsorship of H.R.1148.IH.
Here’s a link to the 60 Minutes piece: Congress: Trading stock on inside information?