Insider Trading Legal For Members Of Congress
By Devvy Kidd
“It is impossible to calculate the moral mischief, if I may so express it, that mental lying has produced in society. When a man has so far corrupted and prostituted the chastity of his mind as to subscribe his professional belief to things he does not believe he has prepared himself for the commission of every other crime.”
~Thomas Paine, The Age of Reason
How many times have we seen stories about individuals going to federal prison for insider trading? Prominent individuals like Martha Stewart. How about billionaire Dallas Mavericks owner, Mark Cuban? He was pursued relentlessly for years by the SEC for alleged insider trading. It was dismissed by a judge, but you can imagine his legal bills.
Have you ever wondered why an incumbent in the Outlaw Congress goes into office with a net worth of a hundred grand or so and within a decade is worth millions?
Being in the trenches nearly 24/7 going on 21 years, very few things shock me anymore. However, when I found out insider trading is legal for members of the U.S. Congress, I was speechless.
People wonder why I refer to the U.S. Congress as the Outlaw Congress? They are outlaws. There is no longer any concern for the U.S. Constitution and too many of them have been lining their pockets using insider knowledge of bills likely to pass where they will benefit financially.
Too many of those miscreants violate laws everyday of the week with impunity because they know by promising “bacon” to their district (along with the massive electronic vote fraud and illegals voting), they’ll get right back into office. Here’s another example courtesy of Worldnetdaily.com:
Just what is Congress illegally downloading?
(Dec. 28, 2011)
“Are members of Congress online pirates, stealing copyrighted material and viewing porn while they are, ironically, working on federal legislation to stop Internet theft of intellectual property? The answer is yes, according to a report that examines the downloading habits – legal and illegal – of the U.S. House of Representatives.
“Online monitors at TorrentFreak researched the surfing habits of lawmakers via YouHaveDownloaded.com in the analysis. ‘YouHaveDownloaded is a treasure trove full of incriminating data on alleged BitTorrent pirates in organizations all across the world,’ the report states…
“The U.S. House was targeted for review since lawmakers are drafting the much-discussed Stop Online Piracy Act, or SOPA, which some fear could be a tool for mass censorship in the name of copyright protection.
“‘Since it’s the birthplace of the pending SOPA bill, we wondered how many of the employees there have engaged in unauthorized copying. The answer is yet again unambiguous – they pirate a lot,’ the report says. ‘In total we found more than 800 IP addresses assigned to the U.S. House of Representatives from where content has been shared on BitTorrent. After a closer inspection it quickly became clear the House isn’t just using it for legitimate downloads either, quite the opposite.’”
“Congressional downloads include pornographic material.”
Aww. Probably just “research” and if you believe that, I can sell you some sand over in the Gobi Desert.
A bill is languishing in the Outlaw Congress to stop insider trading for members of the Outlaw Congress:
“The Stop Trading on Congressional Knowledge (STOCK) Act of 2011, which would prohibit members or employees of Congress, as well as executive branch employees, from using nonpublic information obtained through their public service for investing or any attempt at personal financial gain. Sen. Kirsten Gillibrand, D-N.Y., is introducing a slightly different version of the legislation on Wednesday.
“Like everyone else, members of Congress are subject to current insider trading laws. However, current insider trading laws do not apply to nonpublic information about current or upcoming congressional activity — that’s because members of Congress aren’t technically obligated to keep that information confidential.
“So, for instance, if a lawmaker learns an upcoming bill will grant a company a large government contract, which could boost that company’s stock, he or she is free to buy that stock ahead of the bill’s public introduction. This form of ‘insider trading’ is one of the reasons why there are so many wealthy members of Congress, CBSNews.com reported earlier this year.
“The legislation would also require members of Congress and employees to report the purchase, sale or exchange of any stock, bond, or commodities future transaction in excess of $1,000 within 90 days.
“Gillibrand’s legislation would, in addition to enabling the Securities and Exchange Commission to prosecute cases of insider trading by members of Congress, also make such trading a violation of the House and Senate rules.
“Out of 975 federal entities, Congress and the Supreme Court are the only two that have no rules or laws prohibiting them from trading securities based on nonpublic information.
“Congressmen can get away with ‘the type of insider trading that would send Martha Stewart to prison,’ Craig Holman, government affairs lobbyist for the consumer advocacy organization Public Citizen, told CBSNews.com in June. ‘They go into hearings and confidential meetings with business interests, understanding new legislation is going to come out next week,’ and are free to trade on that information.
“A report released earlier this year by four universities found that on average, stock portfolios held by House members from 1985 to 2001 beat the market average by approximately 6 percent annually. In 2004, the same group of professors found that the average stock portfolios held by members of the Senate beat the market average by about 10 percent.” (Source: CBS News)
Dennis Hastert, failed Speaker of the U.S. House of Representative for years, bailed in 2007, two steps ahead of the law:
“In May 2006, ABC News cited ‘high-level official sources’ in a report claiming that Hastert was under investigation by the FBI. According to the report, the FBI was looking into a letter Hastert wrote in 2003 urging then-Interior Secretary Gale Norton to block an Indian casino that would have competed with casinos operated by other tribes, which were represented by convicted lobbyist Jack Abramoff. Hastert denied the claim, and others suggested that the government leak of an investigation was retaliatory for Hastert’s public opposition to the FBI raid of Rep. William Jefferson’s congressional office. Days after the report, Deputy Attorney General Paul McNulty denounced it, stating ‘With regard to reports suggesting that the Speaker of the House is under investigation or ‘in the mix,’ as stated by ABC News, I reconfirm, as stated by the Department earlier this evening, that these reports are untrue.’ ABC News, however, refused to retract its original claim of an ongoing investigation. Hastert’s office was also under investigation by the House Ethics Committee for its handling of early complaints about inappropriate contacts with House pages by former Rep. Mark Foley. On December 8, 2006, the committee reported that while Hastert had acted negligently, he had not violated any House rules.”
Lots of beltway doublespeak.
Failure to disclose real estate trust
“On June 14, 2006, Bill Allison of the Sunlight Foundation reported that Hastert used an Illinois trust to invest in real estate near the proposed route of the Prairie Parkway, a highway project in Illinois. In Congress, Hastert was then able to secure $207 million in earmarked appropriations for the project, which includes an exit near his land. According to the report, the trust has now transferred 138 acres of the land to a real estate development firm that plans to build a 1,600-home community, located just a few miles from the north-south connector Hastert has championed in the House.
“Hastert’s 2005 financial disclosure form, released June 14, makes no mention of the real estate trust. Hastert lists several real estate transactions in the disclosure, all of which were in fact done by the trust. Kendall County public records show no record of Hastert making the real estate sales he made public today. Rather, each was executed by the trust.
“On June 19, Hastert responded to the allegations, which at this point had been run in several prominent newspapers including the Chicago Tribune and Washington Post. Asserting that he had done nothing illegal, he stated, ‘I listed it the way the disclosure said I should list it exactly.’ He went on to blame the attention generated by this ordeal on the, ‘unrelenting Democratic media.’
“Designed to connect the counties west of Chicago to the metropolis itself, the Prairie Parkway had neither the support of the public nor the Illinois Department of Transportation. Their objection: Rigid requirements in the highway bill would force the diversion of state funds that might have been used for the widening and improvement of existing roads–an approach, according to opinion polls, favored by a majority of the area’s residents–or for more efficient transportation corridors to Chicago.
“Squabbling over the ballooning cost of the bill might have prevented this highway from ever coming to fruition. But Hastert played an unusually active role in shepherding the legislation, a more aggressive role than he played at any other point in his speakership. His dominance of the process was noted by an Illinois highway official, who remarked, ‘I think it’s truly a recognition of the leadership of Speaker Hastert. Speaker Hastert was able to deliver a bill that made it through Congress that the president could sign, rather than a bill that would make it through Congress that the president would veto.’” (Source: SourceWatch.org)
Not to worry. Denny is still stealing the fruits of your labor, kissed and blessed by the Outlaw Congress. After all, someday an incumbent might get thrown out and can get a lucrative deal like Hastert has with the sweat off your back:
Former Speaker Gets Pricey Perks
“U.S. taxpayers are spending more than $40,000 per month on office space, staff, cell phones and a leased SUV for former House Speaker Dennis Hastert, even as he works as a lobbyist for private corporations and foreign governments.
“The payments are perfectly legal under a federal law that provides five years of benefits for former speakers — but only if Hastert never makes use of his government-funded perks in the course of his lobbying work. Ethics experts say that sort of separation is hard to maintain…The federal government pays $6,300 per month to rent an office for Hastert and his staff in Yorkville, Ill. Hahn conceded that Hastert has no other office set aside for lobbying work in Illinois but said that the former speaker travels to Washington frequently for work.
“In addition to the office, the government pays the salaries of three of Hastert’s assistants in his Illinois office — each more than $100,000 in 2008. Bryan Hardin, Hastert’s administrative assistant (the title often used by a chief of staff in a congressional office) earned $138,000.
“‘The office of the former speaker has specific functions that are tied to Denny being the former speaker, but he does not receive any compensation and is not an employee,’ Hahn said. ‘There are three staffers that carry out the functions — archiving, correspondence, speaking engagements — and working with the Hastert Center’ at Wheaton College.
“House disbursement records show that the office is spending an additional $2,000 per month in taxpayer money on a consulting firm, Burnham Strategies, that is run by several of Hastert’s former staffers, including Hahn. Altogether, the firm was paid $30,000 through Sept. 30 of this year, records show. Taxpayers also make the lease payments on a 2008 GMC Yukon and pay for a satellite TV subscription, cell phones, laptops and other expenses.” (Source: Politico.com)
The STOCK Act was originally introduced in the 109th session of the House of Representatives on Mar. 28, 2006. Here we are in 2011 and buzzards in the Outlaw Congress are still making themselves rich while spending us into poverty.
Now, one would think given the complete distrust of the American people today of the Outlaw Congress and an approval rating of 9%, those liars, crooks and cowards would immediately pass a bill to stop what amounts to insider trading: H.R. 1148 — Stop Trading on Congressional Knowledge Act.
The bill was introduced in March 2011. According to Open Congress, it now has 241 sponsors. Why hasn’t it been brought to a vote by Speaker John Boehner, another rotten, corrupt political animal?
“On Dec. 6, 2011, House Financial Services Chairman Spencer Bachus (R-AL) scheduled a markup of the STOCK Act for Dec. 14, 2011. House Majority Leader Eric Cantor (R-VA) indefinitely postponed the markup session on Dec. 7, 2011, stating that ‘a large group of bipartisan members of the committee felt the legislation was flawed and being recklessly moved solely in response to media pressure. Members of both sides of the aisle wanted more time to gather information and develop appropriate alternatives.’” (Source: Procon.org)
The bill has been around six years. How much more time do they need? More time to make money on insider information.
“On Dec. 13, 2011, the Senate Homeland Security and Governmental Affairs Committee advanced the STOCK Act by a vote of 7-2. Senators Tom Coburn (R-OK) and Ron Johnson (R-WI) dissented, calling the bill ‘unnecessary and rife with potential unintended consequences.’ Senator John McCain (R-AZ) also opposed the bill, but was absent from the vote.” (Source: Insidertrading.procon.org)
Perhaps you should call your U.S. Representative and demand that bill get passed. As for S. 1871, it reads virtually the same as the house bill, but don’t expect the corrupt U.S. Senate to get it passed unless there is massive heat from the American people – if they can fit it in between putrid “reality” TV shows, sports, boozing it up at the local watering hole, walking the malls or skiing the slopes.