Stock Market: Congress’ Illegal Piggy Bank

For decades, members of Congress have taken advantage of financial details garnered from pending legislation or from those who are directly involved in specific business negotiations with Congress. It has been prevalent through the years for members to enrich themselves with suspect stock market transactions that could only have happened by their access to and then using that info.

Who would have thought that Coronavirus would have opened a door for our federal employees — members of the House and Senate — to take advantage of a pandemic that has 330 million Americans hiding under desktops in fear for their lives? But that is happening today. (Details of these just ahead)

Remember the words of President Obama’s Chief of Staff and later Mayor of Chicago Rahm Emanuel:

“You never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before.”

That’s precisely what current members of Congress have been secretly doing. But it has happened often in the past but mostly just to make a lot of money by playing the Congressional Monopoly game!

“Let’s Make A Deal”

What’s happening now is NOT new. It’s been going on for decades. Before we tell you the latest, let’s look back a few years.

Then Rep. Tom Price (R-GA), President Donald Trump’s Health and Human Services secretary, when just a nominee was under siege — the harsh lights of a Senate hearing upon him. News reports showed he had bought shares in a tiny biotechnology company while sitting on committees that could influence the firm’s prospects. A colleague, Rep. Chris Collins (R-NY), had tipped him off to the investment.

Rep. Doug Lamborn, Republican of Colorado, bought shares of the same tiny Australian company, Innate Immunotherapeutics. Within two days, three more members also bought in — Republicans Billy Long of Missouri, Mike Conaway of Texas, and John Culberson of Texas. Conaway added more shares the following week.

Sen. Sheldon Whitehouse, the Rhode Island Democrat who sits on the Senate HELP Committee, which oversees health care, is a substantial investor in pharmaceutical stocks. As lawmakers closed in on a bipartisan deal over a significant medical research bill called the 21st Century Cures Act, Whitehouse bought shares in the pharmaceutical firms McKesson, Gilead, and Abbott Labs ten days before the bill was made public. Whitehouse and his wife bought additional stock in Gilead and Amgen two days before the House voted on the bill. The day President Barack Obama signed the bill into law, Whitehouse started a series of three sales of shares in those companies.

Rep. Adam Kinzinger, Republican of Illinois, was a guest speaker at Prescient Edge, a small research and technology firm with Defense Department contracts, in January of 2016. When the company raised private capital later that year, Kinzinger bought in to the tune of $20,002. Kinzinger was a member of theHouse Foreign Affairs Committee, which oversees issues affecting Prescient Edge.

Rep. Chuck Fleischmann, Republican of Tennessee, served on the health care appropriations panel. As then-Vice President Joe Biden was pressing lawmakers to approve funding for his “Cancer Moonshot” proposal in the summer of 2016, a Fleischmann family account invested in two companies, Juno Therapeutics, and Celgene, which were developing new cancer drugs. One of the investments was made a week before the Obama administration announced new measures that would speed up approval for cancer therapies.

384 House members and senators who served in the 114th Congress made no stock trades over two years. Meanwhile, the lawmakers who are active in stock trading conducted a total of more than 21,300 trades during the same two years, but a small group of very wealthy lawmakers accounted for a significant share of those trades.

Texas Republican Rep. Mike McCaul reported approximately 7,300 stock transactions in an array of industries over the two years. Oregon Democratic Rep. Kurt Schrader made a substantial number of trades in companies that have an interest in the committee’s health and energy work. Schrader made close to 700 stock trades over two years.

Instances of insider trading by members of Congress are not difficult to find. For example, in 2008, then-Congressman Spencer Bachus shorted the U.S. stock market one day after attending a confidential meeting with Henry (“Hank”) Paulson and Ben Bernanke, who at that time were the secretary of the Treasury and chairman of the Federal Reserve, respectively. At this meeting, which took place on Sept. 18, Bachus and other members of Congress were given material nonpublic information about the extent of the risks that were facing the financial system at that time.

John Boehner and Dick Durbin, both Senators at the time, also attended that closed-door meeting. Both of them placed orders selling shares in mutual funds the following day.

These are just a pittance of examples of those who have been found involved in unscrupulous stock dealings in the past. Discovering these transactions (which are publicly reported if one cares to dig to find them) show there is a strong propensity for many lawmakers to take advantage of “insider information” obtained by just being a member of Congress.

House and Senate members who are active traders insist their buying and selling is a normal part of managing their finances, as with any American who wants to save for retirement or put their kids through school. But their colleagues don’t seem to agree. The clear majority of lawmakers avoid potential conflicts of interest by buying mutual funds, putting their portfolios in blind trusts or simply staying out of the stock market. Wouldn’t that be the wise and ethical approach for those who have access to information that could possibly be used for self enrichment?

House Speaker Nancy Pelosi (D-CA), when just a Representative back in 2012, was slapped on the wrist by Congress for participating in several obvious personal enrichment transactions committed by her husband Paul Pelosi. Both the Senate and the House passed a bill —The Stop Trading on Congressional Knowledge Act, or “STOCK Act.” The measure made it illegal for members of Congress to engage in insider trading. The act was passed in April 2012, during the presidency of Barack Obama.

The STOCK Act was fondly termed the “Pelosi Rule” by Republican members of Congress. Americans were happy that it appeared that a stop had been crafted for greedy public servants who seemed to always leave Congress as multi-millionaires when being just average economic Americans when entering Congress.

But, WAIT!

  • The STOCK Act outlawed insider trading by members of Congress.
  • The law was passed in April 2012 with strong bipartisan support.
  • In April 2013, key provisions of the law were weakened, reducing the safeguards against insider trading.

Does any of that surprise you?

“I’m deeply concerned,” said Minnesota Democratic Rep. Tim Walz, an early supporter of the Stock Act who does not himself trade stocks. “If you buy stock and then do something that changes that stock, you’ve got to know what’s going on.”

Trouble on  the Hill: “Busted!”

What’s happening in Washington right now? We got through the Mueller Investigation, the impeachment trial of President Trump, and we’re eight months away from a presidential and Congressional election. What could possibly go wrong now? Coronavirus! 

Do you remember the statement above of Rahm Emanuel?

“You never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before.”

Coronavirus is certainly a horror for every American. But several in Congress in the shadow of the current pandemic found a way to make a few quick bucks. If you haven’t heard, it’s because you’ve been asleep or are fasting news coverage.

Four senators dumped millions of dollars worth of stock while Capitol Hill was being briefed on the threat of coronavirus but before the markets tanked as infections soared, disclosure records have revealed.

Republicans Richard Burr, Kelly Loeffler and James Inhofe and Democrat Dianne Feinstein collectively offloaded up to $11 million in stock between late January and early February, according to disclosure records.

Burr, chair of the Senate Intelligence Committee that was directly briefed on coronavirus, sold up to $1.7 million in stock including in hotels, according to reporting from ProPublica. To put Burr’s actions in context, his last financial disclosure form filed with the Senate showed his total net worth at $1 million. Yet, ProPublica reported he sold $1.7 million. Why and how could the Senator sell stock he reportedly did not own? Did he come into stock ownership to that level between the time of his disclosure statement and the coronavirus attacking the stock market? 

Burr’s spokeswoman said in a statement to DailyMail.com that Burr filed his financial disclosure form several weeks before the markets showed ‘volatility.’

Feinstein, a member of the same committee, sold up to $6 million in stock including in a biotech firm.

Loeffler dumped up to $3.1million in investments starting on the day the Senate Health Committee, which she sits on, was briefed by the CDC. Meanwhile, James Inhofe sold up to $400,000 in stock, including real estate.

Loeffler and Feinstein have defended themselves, saying their stocks are invested in trusts and portfolios that they have no personal control over. Inhofe has not commented.

Summary

Numerous times you have witnessed TruthNewsNetwork asking a question in stories and podcasts, “What’s Going On?” We’re asking it again.

It is obvious that politicos in Congress have bountiful opportunities for self-enrichment once seated in the House or Senate. It cannot be happenstance that so many enter Congress with modest net worth only to leave their post years later worth millions. That is NOT normal and is obviously based on enrichment opportunities not available to the general public. And they are OUR employees.

That “Pelosi Rule” that was passed and signed into law by President Obama was little more than a straw gift given to Americans to show “We in Congress are going to police ourselves and make sure NO ONE cheats regarding stock trading.”

They lied.

In YOUR world, do you know of any other public entity (like Congress) in which workers can cheat, take advantage unethically and illegally to make money and there’s no accountability to anyone for those actions? In many respects, it reminds me of that old saying, “That’s kinda’ like the prisoners, not the guards, guarding the prisoners.” Self-policing seldom works, especially when it comes to someone else’s money.

What is most objectionable to me about this has not changed since I first discovered it. These 535 elected officials took an oath of office to serve us — all of us. They’re paid well — far better than are average Americans. Doors they certainly would never know of open to them as they meet and interact with those in business while in office. That’s normal. But there’s NO honest explanation for the actions you are hearing about from these today.

In the REAL world, here’s how this would be structured:

  1. Before taking the oath of office, each member of Congress would be required to either divest 100% of their personal holding other than a retirement plan already in place and then to place ALL of their personal and business assets remaining in valid Blind Trusts in which they nor their spouses or children have any knowledge of or control of any kind.
  2. No member of Congress would be allowed to receive any compensation of any kind — other than their published Congressionally controlled income and expenses while serving their term in office — PERIOD.
  3. NO lobbying of members of Congress or any person serving in the White House or a cabinet position can participate in any type of lobbying as defined in existing U.S. law. Under NO circumstances can any member of Congress receive any kind of compensation from lobbyists. That includes payment of any kind — direct, indirect, or even in-kind. That prohibition applies to the immediate family members of those in Congress.
  4. Finally, and most importantly, any member of Congress found to have violated any of these will immediately be removed from their office in Congress. Further, the Department of Justice will immediately file charges for felony violations against those former members of Congress AND any person or persons who participated in facilitating this illegal process.

Does that sound somewhat radical? What is the role of serving in Congress? TO REPRESENT US…PERIOD. No longer should Americans feel that “serving in Congress” is really “serving.” Being in Congress really means “obtaining unscrupulous if not illegal opportunities to personally enrich oneself, trying to gain as much wealth as possible by walking as close as possible to the ‘felony line’ without stepping across it.”

Here’s a challenge: ask your members of Congress from your district and state if they would support a law that prohibits “extra” compensation based on the points above? Most will say, “I’d have to see the bill before I could commit to support it.” When they say that, ask them this, “Would you create such a bill and promote it in Congress?”

I guarantee the answer will be a resounding “No” with a plethora of excuses.

Sad, isn’t it. Sad mostly that so many take advantage of it and us. But it’s saddest that so many do it at all and think nothing of doing so.

That says a lot about them. Who in God’s name have we put in charge of creating the laws of our nation?

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