If you haven’t already, take some time to watch the 60 Minutes piece on congressional insider trading. Taking the lead from work done by Peter Schweizer for his new book Throw Them All Out, the story delves into how so many of our elected officials manage to end up as millionaires after a few terms in Washington, D.C. Maddeningly, the practice is legal and not exclusive to members of one party. (And, according to WPRI, Rhode Island Senator Sheldon Whitehouse has apparently engaged in the practice, though he–according to a spokesman–“is not actively involved in the management of this investment account”). For example, to pick a couple high-profile individuals:
During the healthcare debate of 2009, members of Congress were trading health care stocks, including House Minority Leader John Boehner, who led the opposition against the so-called public option, government funded insurance that would compete with private companies. Just days before the provision was finally killed off, Boehner bought health insurance stocks, all of which went up….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.
Schweizer explains why he wrote the book:
This is not a book about corrupt political leaders. It is instead about a compromised political system. The purpose of the book is not to single out certain individual members, but to look at a broad pattern of financial transactions and expose possible insider trading and conflicts of interest. The book reveals a pattern of suspicious stock trading by members of congress from both parties based on their financial disclosure statements and legislative activities….the political leaders named here are the beneficiaries of these trades and were anyone else in America to engage in these sort of trading patterns, they would likely receive scrutiny from the Securities and Exchange Commission (SEC). Indeed, private citizens might very likely go to jail were they to do this as it relates to their own jobs.
The real scandal is that in our current system of government, these trades are perfectly legal. We wouldn’t tolerate professional athletes betting on their games. So why do we let our leaders do it on something far more important?