Ever wonder why Congress seems so willing to help bail out the financial industry? Well, a 60 Minutes report on Sunday says that lawmakers purchased stock in companies while involved in debates on Capitol Hill about bills that would affect those companies.
Conflict of interest? Just a teensy-weensy little one. But it’s apparently completely legal.
“Insider trading on the stock market. If you are a member of Congress, those laws are deemed not to apply,” says Peter Schweizer, a fellow at the Hoover Institution, a conservative think tank at Stanford University in the 60 Minutes piece. “The fact is, if you sit on a healthcare committee and you know that Medicare, for example, is– is considering not reimbursing for a certain drug that’s market moving information. And if you can trade stock on– off of that information and do so legally, that’s a great profit making opportunity. And that sort of behavior goes on.”
California Rep. Nancy Pelosi, the former house speaker, and her husband invested in eight initial public stock offerings in 2008. The Pelosi’s, for example, bought 5,000 shares in VISA at $44 a share, while a bill that could have hurt the company was under review in the House. The stock jumped to $64 a share–an increase in value for Pelosi of $100,000.
Likewise, current House speaker John Boehner bought health insurance stock while debating the merits of Obama care.
Both Boehner and Pelosi denied wrongdoing.
In addition, Alabama Rep. Spencer Bachus was shorting the market while he was being secretly briefed on the failing economy, 60 Minutes reported. Bachus made money trading General Electric stock during the financial crisis. “What we know is that those meetings were held one day and literally the next day Congressman Bachus would engage in buying stock options based on apocalyptic briefings he had the day before from the Fed chairman and treasury secretary. I mean, talk about a stock tip,” Schweizer told 60 Minutes.
Several years ago, then Speaker Dennis Hastert got a federal earmark to build a highway near land he owned. The value of the land shot up after that, and Hastert sold it for a $2 million profit, 60 Minutes reports.