How members of Congress make gigantic bank on insider trades, real estate deals, IPOs and other sweetheart opportunities

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43 Responses to “How members of Congress make gigantic bank on insider trades, real estate deals, IPOs and other sweetheart opportunities”

  1. Gorgonaut says:

    It boggles the mind.
    The great thing, though, is that everyone knows about it.

    Here in Norway, as everywhere else in the world, these things happen all the time- without anyone knowing about it.

    What’s the biggest evil?

    /baseless assumption

    • digi_owl says:

      Makes one wonder how many senators and congressmen have their money embedded in the fighter jet purchase and is now dreading the thought that it may go poof…

    • Ryan McGuire says:

      evil is evil whether it’s known or unknown.  Not everyone knows about it, there’s too many who go about their day and don’t know.  They complain about the protesters because they aren’t aware of the real situation.

  2. Cowicide says:

    Meanwhile, more and more hatred and vitriol is spewed against the people in the streets protesting against this broken, corrupt, evil system.

    Hahaha….  OWS is really working.

    Keep turning up the heat, liar corporatists… it only makes the movement boil, steam and cook, baby.

    http://oaklandlocal.com/posts/2011/11/massive-action-remove-occupy-oakland-encampment-expected-monday-morning

  3. Cowicide says:

    It’s interesting to see how much better the republicans handled 60 minutes overall by simply running and hiding… while Nancy Pelosi “screws it up” and shows very obvious fear and angst at the questioning and evening tries to lie about it.

    Watching corporatists squirm is awesome.  They all just try to run and hide like cowards.  Just goes to show how weak these people really are when confronted with even mild adversity.  These rich assholes just can’t handle what we Americans do every day.

    This is our so-called leadership?  It’s beyond time for the people to lead instead.  We need to remove (almost) all these people.

    Thank God for the OWS movement, it could never come at a better time in our nation’s history.

  4. Lemoutan says:

    Surely the reason Congress ‘get a pass’ on insider trading is simpler than ‘that’s the way the rules are (not) written’? It’s more that they’re treating with the very information that is the basis of insider trading, they can’t ‘not know’ it for their own, non-congress, purposes. That would be like trying to induce a legal amnesia. Basically, the simple fair solution is to completely prohibit any stock dealing whatever. It would have to come with the job.

    • That_Anonymous_Coward says:

      Except they do this often…
      When the Government was shut down, they still got paid because they made sure their salary is paid in another way.

      We allow them to use tax dollars as a personal piggy bank, they throw some bones to the locals back home and get reelected while not doing anything to help the country.

      While everyone else has been called on to tighten their belts to make it through these tough times, how much of their pay/benefits has been taken back to help?

    • donovan acree says:

      The correct solutions is not to disallow trading. That would be over the top. They can invest via a blind trust through a third party stock broker.

      • Antinous / Moderator says:

        They can invest via a blind trust through a third party stock broker.

        I’m pretty sure that I remember the Clintons doing a blind trust.  Likewise Dianne Feinstein.

  5. fxq says:

    I don’t think we can ever prevent this kind of behavior. I do wish it was more out in the open – perhaps a daily column on WSJ that lists the 100 largest stock translations by public servants.

    Then we can have some real honest debate about it.

    [aside] I bet if we knew all the facts we’d also find congresscritters that made really BAD trades based on insider info. Now THAT would be a great source of amusement.

    • LinkMan says:

      I don’t think we can ever prevent this kind of behavior.

      You can’t 100% prevent it, but you can prohibit it.  In fields like finance and corporate law where folks are routinely exposed to non-public information it’s pretty well accepted that you can’t trade on it.  Between insider trading and fiduciary duty laws, employer policies and professional ethics guidelines, it’s not so easy for an investment banker or corporate lawyer to trade on the non-public information that comes across their desks every day without getting fired, disbarred or even jailed.  Congress should be under similar obligations.

      • Lemoutan says:

        An office which does not prohibit its members benefiting from the very transactions that it manages is indistinguishable from one which is set up expressly for the purpose of benefiting said members even if its members are, in fact, honest.

        If  such activities are prohibited then outsiders would have no grounds to complain that its membership is comprised only of  self-servers. Thus it’s in their own interest to ensure that outsiders don’t have this perception of them by prohibiting such stock dealing entirely. Pussyfooting about with ‘blind trusts’ simply won’t do that job.

        But – as facetedjewel has pointed out – outsiders don’t actually seem to care that much and probably even expect this kind of behaviour.

        Whaddya gonna do, eh? Tsch.

  6. Kevin Pierce says:

    This sort of shenanigans goes back to Salmon P. Chase’s (Lincoln’s Sect. of the Treasury) relationship with Jay Cooke, and probably beyond.

  7. Guest says:

    These expensively suited and skirted yahoos run for political office for precisely these opportunities in self-dealing.  Whatever activity we see them engaged in in Washington is purely for show for the their constituents, to create a record and to use that record during the campaign to convince the voters to vote for them again, to keep them in a position of power.  Few declarations amuse me more during a political campaign, than to hear one candidate accuse the other of being ‘an insider’.  Great for creating voter outrage but what horseshit!  Neither party would financial support an outsider running for office, assuming they could even get on the ballot.  Washington has been and remains a rich old boy’s club.

    Edit: It was repeated several times in this story that Congressmen and Senators are trading on information not available to the public. Far more damaging to our country is all the information about our politicians that IS available to the public, that the voters completely miss or ignore.

  8. cmcnulty81 says:

    Finally. I have been wondering why the OWS protests haven’t moved to the where the real criminals live: D.C.

    Wall Street firms would not exist without the support of the Federal Reserve and the politicians in D.C., they have the true power. 

    • shamocracy79 says:

      Wall street firms(and every other industry) used their money to buy the support of puppets in Washington(no need to buy the fed reserve, it’s a privately run corporation).

      What we need is the seperation of money and state, that is the removal from all outside financial influence into our democratic process.  Through lobbyists, subsidies, and campaign financing our system is entirely corrupt.   Clean the system up, get the citizenry interested in politics and we can have the democracy we think we should have instead of the shamocracy we currently “enjoy”.

    • Navin_Johnson says:

      Oligarchs have the power. 

      Also:  http://occupydc.org/

    • D Wyatt says:

      I Second the motion, all in favor say i I I ii I I i iI .  motion passed.   OCCUPY DC
      OCCUPY DC
      OCCUPY DC
      OCCUPY DC
      OCCUPY DC
      THEY ALONE ARE THE ROOT OF THE PROBLEM!

  9. obah says:

    The abuse of public trust/ economy should be more serious crime. Actual people get actually killed by bad laws, reforms, contracts and good old money hoarding.

    At least in your America some of the financial criminals who are “caught” get punished. In my country it’ more like s a slap on the wrist and “you shouldn’t do that, it’s naughty”. Not that anyone gets caught anyway because nobody is investigating financial sector. Goverment agency is there but in ten years it has IRL ínformed police about two minor financial crimes.  On the other hand Americans talk about whole different sums of money. My countrys politicians are bought with few free vacations.

    • Yeah. 60 Minutes used the “research” of a Hoover hack for the piece, and it shows.  Although it would be great if the elites in Congress didn’t behave like the rest of their class, this kind of “investigation” into corruption is totally missing the point — as it is designed to. The real corruption is systemic and is more a function of how lobbying and campaign cash dictate policy. Why we don’t have a public option, and oil and nuclear getting huge subsidies, for examples. And as Ryan Grim points out, one of the worst recent offenders of insider-y trading in Congress is Eric Cantor, but 60 minutes is working on a softball piece for Cantor as part of his push to rehabilitate his image, and so he’s left out. If it’s on TV, the first question you should ask yourself is, Who paid for this advertisement?

      • Crispian says:

        “Although it would be great if the elites in Congress didn’t behave like the rest of their class, this kind of “investigation” into corruption is totally missing the point — as it is designed to. The real corruption is systemic and is more a function of how lobbying and campaign cash dictate policy. ”

        This deserves a great big, “HUH?” The 60 Minutes piece addresses one aspect of the systemic nature of the corruption. If it is legal to invest in corporations that you have the power to regulate or not regulate, politicians are going to do it to their advantage.

        “And as Ryan Grim points out, one of the worst recent offenders of insider-y trading in Congress is Eric Cantor, but 60 minutes is working on a softball piece for Cantor as part of his push to rehabilitate his image, and so he’s left out.”

        Like HuffPo, you claim that the “”investigation”” is “totally the missing the point”…except if there is a Republican we can really pin blame on.

        “If it’s on TV, the first question you should ask yourself is, Who paid for this advertisement?”

        People complain about the effects of Citizens United, but how much money was effectively directly transferre­d to Pelosi as a result of the VISA IPO? And we do not even know exactly how much money she made from that!

        If we see an advertisement on TV and if corporations donate to candidates…it’s out in the open. We don’t have to like it, but it’s open. Direct contributions are limited and we can hold politicians’ feet to the fire if we think they are improperly influenced. If a corporation releases an ad, a book, a movie, a billboard – it’s out in the public domain and subject to battle of ideas protected by the First Amendment.

        A direct transfer of  money via a VISA IPO? Priceless.

  10. Hmm, conservative think tanks like the Hoover Institution are saying the same things you might hear at any Occupy event. I think that the one of the core goals of Occupy, to make the government more independent of financial interests,  would play well with conservatives if we could just get the message out to them.

    Here’s an interesting idea: Get elected to congress and all your money goes into a blind trust. Double blind, really, as it should be the case that the planners themselves should not know which members of Congress hold which account. 

    I’ll bring this up with some folks after tomorrow’s GA.

    • Navin_Johnson says:

      I think that the one of the core goals of Occupy, to make the government more independent of financial interests,  would play well with conservatives if we could just get the message out to them.

      Unfortunately they conflate cash with ‘free speech’.  Good luck though, maybe get some centrist conservatives to reconsider.

      •  

        Unfortunately they conflate cash with ‘free speech’.  Good luck though, maybe get some centrist conservatives to reconsider.

        I think there’s a big difference between a plutocrat and a conservative. Many conservatives are concerned about the entanglement of government and financial interests. The folks at Hoover seem to be interested in it.

        The early days of the Tea Party were concerned with bailouts without accountability. Then they got undermined by the plutocrats and it became more about God and guns, and getting rid of scary black people in the White House.

        • Crispian says:

          The Tea Party NEVER became about “God and guns and getting rid of scary black people in the White House.” That was a charged lobbed right from the start and if you say something loudly enough for long enough, even some good and honest people will start to believe it.  I’m assuming you are in that category of people.

          • Daniel says:

            I keep seeing this “he said/she said” nonsense about the Tea Party.  I’m willing to believe it was a bunch of whiny upper middle class tax dodgers in 2007 but by 2008 the racists, NRA members, and Pat Robertson watchers seemed like they were in firm control.

            I’m perfectly willing to believe that an original, pure, somewhat-less-than-reasonable Tea Party was co opted to become the party of anti-intellectual animus it seems to be today but if you want me to believe it was “never” about God, guns, and dog-whistle racism then you have a long row to hoe.  It became about those things for the same reason that the Republican party did: you mistook noble savages for useful idiots.

          • Crispian says:

            Did you ever attend a Tea Party rally? I did. That first one in Chicago in 2009. Speakers at the rally emphasized that Bush’s policies were just as much to blame. One young man who was distributing brochures and talking to people in the crowd was proudly gay. But he was very concerned about our economic future. He brought up the issue of gay rights, recognizing that many may not agree with his views, and emphasized that the movement was about the size and scope of government.  Everyone I saw him speak with completely agreed with him.

            And here is your assumption of its start:
            “I’m willing to believe it was a bunch of whiny upper middle class tax dodgers in 2007…”

            You don’t even know when the movement started. You are disparaging people as whiny and upper middle class based on what? A Gallup poll from April 5, 2010 showed that 45% of Tea Partiers have an income of less than $50,000. And 55% were above $50,000 (unfortunately it didn’t break it down more). I don’t know where you draw the line on “upper middle class” but it is a reasonable assumption that most in that  poll earned less than $200k (Obama’s special number). Gallup’s conclusion based on all the various demographics polled: “Tea Party supporters skew right politically; but demographically, they are generally representative of the public at large.”

            That’s my eyewitness account. That’s Gallup’s polling results. You throw out erroneous dates and your own personal fantasies of what the Tea Party is.

          • Daniel says:

            You don’t even know when the movement started. You are disparaging people as whiny and upper middle class based on what? A Gallup poll from April 5, 2010 showed that 45% of Tea Partiers have an income of less than $50,000. And 55% were above $50,000 (unfortunately it didn’t break it down more). I don’t know where you draw the line on “upper middle class” but it is a reasonable assumption that most in that  poll earned less than $200k (Obama’s special number).

            I draw the line at about $50,000 a year.

            My dates are not wrong, yours are:
            http://thebostonteaparty2007.blogspot.com/

            If the Tea Party had a message that was not “Keep the government out of Medicare” then you guys failed to get it across to the public. Sorry. You can always try again.

          • Crispian says:

            Daniel, that 2007 event was a commemoration of the historic Boston Tea Party used as a campaign fund raiser by Ron Paul (before the bailouts, stimulus, and ACA). Very different animal from the populist movement that exploded 2 years later. There is no reason to confuse a single fundraising event with a populist movement just because they reference the same historic event.

            And you claim someone who earns $60,000 per year is upper middle class? I’m sure they will be thrilled to learn that. Are you assuming that person lives alone? That if they have a spouse, that spouse works and earns as much? That he doesn’t have children? That real estate prices are relatively low? Maybe that person is a Registered Nurse, for whom the 2010 average salary is over $67k according to the Bureau of Labor Statistics.

            I’m proving you wrong with facts. You only throw out your own personal and uninformed wishes.

  11. Teller says:

    My takeaway from the report was that members of congress are immune from insider trading laws. Genius! That’s why a senator can walk out of a meeting knowing some highway’s going to be built and buy the land around it. Or the second they decide Boeing’s getting a big contract, Hello, broker. Not to mention pref treatment on can’t-miss IPOs. The only solution is to get Congress to pass legislation disallowing congressional insider trading.

    /waits for pig to fly out

  12. sgtdoom says:

    Until that day when members of congress and the supreme court are rightfully dragged out and either hung, or guillotined, we will experience zero change in Amerika.

    We have just witnessed the IMF and banksters choosing the prime ministers of Greece and Italy, just as the banksters have given us the “choice” of Obama of Wall Street, or Romney of Wall Street, while the Mittster obscenely claims the Chinese “have stolen American jobs” when it was the talking obscenity, Mitt Romney who offshored American jobs to China.

    Only a most violent revolution will ever change anything in Amerika.

  13. Curtis Wissler says:

    If you haven’t heard Frank Miller’s rant regarding the OWS movement, search it out.  Then, shove this little tiny tidbit back at him with full force.  Along with the literal myriad of complaints that all OWS supporters voice for where the 99% 0f Americans finds themselves today, this is just another nail in our collective coffin as powerless citizens.  When you have a ruling elite (congress and senate) that is made up of 50% millionaires who also fall into the 1% bleeding this country dry, what more information does anyone need.  Public service.  LMFAO.  It’s a joke, but it’s not that funny.

  14. fluxivity says:

    term limits please

  15. Frederik says:

    “No, no, we don’t call it insider trading, that’s corrupt and illegal, we prefer to call it Enhanced trading. See, much better and totally legal…”

  16. el dueno says:

    Congress declared itself exempt from insider trading restrictions over 15 years ago. “It is too burdensom” was the reason given since almost any transaction could be considered done with insider knowledge. Perhaps it is time to require our law-makers and regulators to put their wealth into hidden trust accounts while they serve the public, or am I too idealistic.

  17. Brainspore says:

    The end of the piece sums it up nicely. The problem isn’t even that Congress is made up of especially evil people- the problem is that the rules are set up in such a way that almost anyone in the same situation would eventually succumb to temptation. The political machine in Washington is designed to corrupt the most idealistic of souls, and the people who run that machine it keep it very well oiled.

  18. SCAQTony says:

    Amazing that with the stroke of a pen, insider trading for the higher forms of life; (read and congressman and senators), can profit while people are suffering.

    Imagine you’re on the Titantic and you notice that several members of congress are jumping into lifeboats yet the ship is moving along fine; but then…. “See ya, wouldn’t want to be ya!”

  19. Justin Bennett says:

    Let your congress man and woman know what you think!
    You can comment on the current legislation HR 1148 and write your representative a letter!https://www.popvox.com/bills/us/112/hr1148

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