How Do Members of Congress Get So Rich?

We’ve written before regarding specific “questionable” business deals involving several in Congress, none more obvious and sinister than those of House Speaker Nancy Pelosi (D-CA). Pelosi’s investments have often been questionable as have her specific political roles in legislative actions involving different entities in California and elsewhere to obtain political favors as well as inside information on pending business deals. Here is the link to the two-part expose’ of Pelosi’s if not illegal, certainly immoral business transactions published July 22nd and 23rd this year: https://truthnewsnet.org/pelosi-family-big-money-corruption/

But that’s just the story of one member of Congress. A recent study showed that 51 of our current 100 Senators are filthy rich. And most were not when they were elected. So how does one explain the ability of those few when working in Washington to parlay through their government jobs amazing financial windfalls?

The Process

Yes, there can certainly be legitimate business opportunities which politicians can take advantage of just as can private citizens. But some of those 51 Senators seem to have found on numerous occasions the “golden goose.” And that goose seldom lives in a pond in their state, unless they’re from California, Arizona, New York, or other heavily populated left-leaning states.

An analysis of personal financial disclosure data as of August 16, 2019, has found that those 51 senators and their spouses have as much as $96m personally invested in corporate stocks in five key sectors: communications/electronics; defense; energy and natural resources; finance, insurance, and real estate; and health.

The majority of these stocks come from public companies, and some are private.

Overall, the senators are invested in 338 companies – including tech firms such as Apple and Microsoft, oil and gas giants including ExxonMobil and Antero Midstream, telecom companies including Verizon, and major defense contractors such as Boeing – in the five sectors looked at closely.

Certainly it is not illegal for members of Congress to invest in companies which they have at some time legislative matters that directly or indirectly impact those companies, even though many citizens feel it should be. But how ironic is it when some of these mentioned financial windfalls result from successes of companies over which these members of Congress process legislation tied directly to some of these companies? That’s where Pelosi got in trouble previously. But few ever get called out for what they’re doing.

Not only are the senators far wealthier than most of their constituents, but they’re in a prime position to increase their wealth via policymaking.

If a representative on the House financial services committee owns hundreds of thousands of dollars worth of stock in Bank of America, how might this investment affect their questioning of Bank of America’s CEO in a hearing? Could it influence how they legislate and vote on banking issues? It certainly can. Here’s one such example:

Senator Joe Manchin (D-WV), the ranking member on the Senate energy and natural resources committee, owns between $1m and $5m worth of non-public stock in his family coal business, Enersystems, making him the only Democratic senator who is directly profiting from the environmentally devastating coal business.

Despite pressure from the left, the Senate minority leader, Chuck Schumer, made Manchin the ranking member of the committee, and Manchin did not divest his coal holdings.

It is a fact that such investments made by members of Congress are legal on their surface, but it initiates questions from many citizens at how easily these fortunes are made. It seems to many that in big business sectors, there is too much access by elected officials that impact heavily those Congressional decisions — especially in finance, securities and real estate. Ten Senate members of the banking committee own collectively $8 million of stock in those three sectors — and each of those companies have issues and policies that come before that committee.

You know what’s odd about this? Something that can so obviously be labeled “political corruption” or “paybacks” goes virtually unnoticed by government watchdogs and are simply ignored by the Department of Justice. To make matters worse, there is absolutely NO sense of obligation to “shun the very appearance of evil.”

Do you remember the “everybody’s doing it” argument you gave to your Mom when she told you not to go to a good friend’s party? “Everybody’s doing it” was your response. The few times that specific Congressional wrongdoing finds its way into the public’s scrutiny they are simply ignored. When questioned as to why this so often happens, one DOJ investigator responded, “They’re all doing it.”

That doesn’t make any of it right. Call me stupid, but I thought that every member of Congress  is elected to serve the voters and other constituents in their various districts and states — not themselves. There’s nothing in their oaths of office that requires them to decline business opportunities. But there’s something in their commitments to work exclusively for their constituents.

Let’s be fair. Some lawmakers want to do away with these perceived conflicts of interest. Presidential candidate and Senator Elizabeth Warren has put forth legislation to stop such financial dealings from Congressional members. And not just Congress — also senior congressional staff, Presidential cabinet secretaries, also folks who work at the White House, even federal judges. That legislation would prevent these from owning all kinds of financial assets, like stocks, bonds, and others, while they serve.

Summary

I’m going to get personal here. I find it difficult to accept the claims of federal lawmakers that they cannot afford to live and work there. I know it’s much more expensive to live in D.C. than in Smalltown, America. But they knew that when they ran for office. Have you ever seen the compensation for members of Congress? House members make approximately $170,000 a year, plus expense accounts. With cushy committee assignments and some additional legitimate revenue opportunities like speaking engagements and consulting projects, that number can climb.

$170,000 a year: Nothing to sneeze at

No matter. It IS expensive to lease and furnish a place in Washington. Then there’s the responsibility of financing a family back home. To make it work requires sacrifices from those members of Congress and their families. But in the end, no one said they have to do it — it’s a conscious choice!

Putting aside the certain attractive financial offers these lawmakers receive can be difficult. Americans understand that. Americans also understand that their being lawmakers does not give them free passes to twist the power of the office they hold into financial windfalls. And Americans really hate one thing most about these financial actions: when lawmakers take these questionable financial opportunities, what they are doing is selling the power of the office they hold that voters gave to them. In essence they are selling something they do not own.

Part of the American dream that millions of immigrants flood to the U.S. for is the opportunity for financial freedom that can be gained here by hard work. Many of those in Congress have skillfully skipped over the deliberate steps most have to take for prosperity: diligence, hard work, and self-deprivation. In doing that they thumb their noses at the common American who just works hard to scratch out a good living for their families.

We could detail here elaborate examples of how dozens of members of the House of Representatives and the U.S. Senate have achieved great wealth through their positions of power and opportunities. We’ll end with this one example:

Senator Dianne Feinstein (D-CA), who along with husband Richard Blum, an investment banker, is the second most wealthy member of the Senate with up to $7m invested in the five business sectors listed above. Blum’s purchase of as much as $250,000 worth of Facebook stock three months before his wife questioned the Facebook CEO, Mark Zuckerberg, came under scrutiny after that trade was reported. He has since sold off the stock, but the couple still owns up to $3.3m worth of communications and electronics sector stock, which is heavily represented their state of California, including between $150,001 and $650,000 invested in Alphabet. Alphabet is the parent company of Google. Does anyone reading this think there just might be some inside information used to make decisions by Feinstein and husband Richard to pull the trigger on those investments?

How does all this happen? First, the salaries and benefits for Congress are set and voted on by those members of Congress — not Voters!

I know of no such arrangement in any large or mid-size company in America. Do you know why? In a capitalistic system, supply and demand and a free market determine the entire financial structure of companies. They’re based on cost and revenue. Congress is NOT a member of a capitalistic system. Congress directs ours. But they base their personal pay with no consideration of what the “company” revenue is — they just pay themselves what they want! The “company” — the United States — is $22 Trillion in debt for money they borrowed and spent. Did they ask you your opinion?

How can this be stopped? I’m not a Constitutional scholar, but I think the only way it can is through amending the Constitution. And the process gets more difficult for that to happen with the fact that Congress must get involved in constitutional amendments!

The other way is for states to each call a Constitutional Convention at which each can take actions to regulate the money Congress spends on ALL is operations, including lawmakers own compensation.

It’s highly unlikely either of these will ever happen. Imagine trying to get enough people to agree to doing so. It would be a nightmare.

The final option? Start electing U.S. Representatives and U.S. Senators basing support for them on their financial positions on this issue and promises to make it happen.

I don’t know about you, but when you have a man or woman who have unilateral power to determine what they’re going to get paid, the odds are they are going to do O.K.!

I’m talking to my boss about this tomorrow. “If it’s good for the goose…”

I’ll kill the hope we may have created in this story: when they leave Congress, almost all go to work on “K Street” — the epicenter of almost all the lobbying of the U.S. Congress. There they simply parlay their contact lists they compiled while serving into rich contracts with the companies they represented when in Congress. What do they do for those companies? Slap the backs of their former fellow lawmakers while taking them to expensive dinners, vacations, and jobs for relatives, IF they’ll make decisions the “right way” in legislating.

Corruption at the highest level in the country. But right now, it’s legal!