About that ‘60 Minutes’ report on congressional insider trading

If there are any television sets in Zuccotti Park, I hope they were tuned last night to “60 Minutes.” If so, the Occupy Wall Street protesters might have learned another reason to think the political class is at the heart of the problems against which OWS rails. See the video here:

CBS’s weekly news-magazine show did well to highlight the problem of members of Congress doing what, if done by anyone else in America, might be described as illegal insider trading. Now, there are those who will argue that insider trading should be legal, usually on the premise that people make trades because of information, and that trades based on inside information will help make that information public more quickly, and expose other kinds of fraud. But I would hope they’d agree that, while it’s also in our best interests for “Washington insider” information to become public quickly, the potential for corruption among lawmakers is too great. And the solution seems fairly simple: Require lawmakers to put all or most of their assets in blind trusts while they’re in office. They would still have political incentives for their inside information to become public information.

However, there were a few significant holes in the “60 Minutes” story that would have helped us, the viewing public, understand how big a problem this is, and whether it should take priority as a financial matter over, say, unwinding Fannie Mae and Freddie Mac:

1. “60 Minutes” reports that Spencer Bachus, the Alabama Republican and chairman of the House Financial Services Committee, “made money trading General Electric stock during the [2008 financial] crisis, and a third of GE’s business is in financial services.” OK, but how much money? And, by definition, there’s twice as much GE business outside financial services as in it — was that ratio higher before the financial crisis? Should we consider GE a financial services firm for the purposes of examining Bachus?

2. Both Speaker John Boehner and his predecessor, Nancy Pelosi, are shown at press conferences being asked by CBS’s Steve Kroft about trades they made, perhaps based on inside information. (Pelosi’s trade, taking part in Visa’s IPO while legislation that would have hurt Visa was pending — and which was later withdrawn, only to be reintroduced by the Senate and passed two years later — seems more serious than insider trading.) In both cases, we’re told they bought stock — Boehner’s purchases were of unnamed health insurance companies, during the Obamacare debate about a public options — and that the prices of those shares rose. But we’re never told whether they sold the shares and actually made any money. Or, if they still hold the shares, whether the prices have fallen. (In Visa’s case, at least, the price has continued to rise.)

And, as with the Bachus case, if they made money, how much was it? And when? By contrast, we were told Pelosi’s predecessor, Dennis Hastert, made $2 million from transactions involving land adjacent to a future highway for which he secured federal earmarks.

3. Former Rep. Brian Baird, D-Wash., is held up as an example of someone who tried to fight this practice in Washington by sponsoring the “Stock Act,” which would tighten rules on trading and increase transparency. We’re told the bill had only six co-sponsors, a pitiful number (although Baird’s hypothetical of 100 co-sponsors for a “National Cherry Pie Week” bill is not very useful: Of course a noncontroversial bill would get more co-sponsors). But there’s a revealing exchange during a montage of Kroft chasing down members of Congress:

Male voice: I would have no problem with that.

Kroft: Okay.

Male voice: But then again I am a big fan of, you know, instant disclosure on almost everything.

Kroft: They’re looking for co-sponsors.

Male voice: And yet, I’ve never heard of it. (emphasis added)

It’s hard to say, based on Kroft’s report, whether the Stock Act is something Baird really pushed or, as the closing line by the “male voice” seems to suggest, it’s the kind of bill members of Congress introduce for the sake of saying they introduced it, but which they never seriously pursued.

4. And how about some overall numbers? Kroft interviews an academic who has been studying this issue. How many trades have there been, and over what period of time? How much money was involved in them?

All in all, it was a good report on an apparent problem — but not quite good enough for us to know just how big of a problem.

– By Kyle Wingfield

102 comments Add your comment

Producer

November 14th, 2011
8:32 am

Why am I not surprised that Congress has exempted themselves from insider trader laws that would get us regular folk put in jail? Typical.

jt

November 14th, 2011
8:37 am

“All in all, it was a good report on an apparent problem — but not quite good enough for us to know just how big of a problem.”
.
Speak for yourself.
.
One only has to research to see how our two senators in Georgia are invested up to their smelly armpits in Big Agriculture and Big Mortgage/Banks.
.
Watch where the wheel-barrows of Tax money goes.
.
Head..meet….pike.

Politi Cal

November 14th, 2011
8:44 am

Term limits…term limits…term limits. Being a Congressman/woman should not be a profession.

Joe The Plumber too.

November 14th, 2011
8:49 am

The little children calling themselves Occupy _______ ( insert city here) need to be spanked and put to bed early with no snacks. I wonder if nancy piglosi is still proud of them now that there is rampant drug use, rapes, property damage to small businesses, attacks on police officers & theft occuring at these lawbreaking campsites, and yes my little bedwetting libs, they are illegal campsites. Try picking a park and putting up a tent and start living there and see how far you get. This same scum that are protesting something/anything are damaging small business people that are struggling to make it in the same economy. It’s time for the police in every city to do their jobs and clear this trash so that the taxpaying citizens can get on with the business of living their lives and not having these misfits to deal with.

Jimmy62

November 14th, 2011
9:01 am

I saw a friend posting about Penn State, “How could anyone ignore assault and molestation?” My initial thought is that he was talking about Occupy, but no… He continues to ignore assault and molestation when it involves left wing causes.

ByteMe

November 14th, 2011
9:08 am

Should we consider GE a financial services firm for the purposes of examining Bachus?

For the purposes of TARP, GE was a financial services firm, because their financing arm’s exposure was large enough to swamp the other 2/3 of the company. Just because it’s contribution to the bottom line is only 1/3 of the company doesn’t mean it’s not the tail wagging the dog.

JF McNamara

November 14th, 2011
9:25 am

Congress if full of stock market cheats, bribe takers and corrupt money makers? Really? What is this, 1982?

rwcole

November 14th, 2011
9:40 am

I saw the story as well and had some of the same questions as you, Kyle. Wouldn’t if be great if there was a group of people whose job it was to follow up on this kind of info and then tell the public about it? They could gather pertinent information for the rest of us and then report it to us thru different media outlets such as newspapers, internet, and television. You know what? We could call them reporters. I wonder if there’s anyone out there that would be interested in a job like that.

kitty

November 14th, 2011
9:40 am

I think the fact that members of Congress go in without millions of dollars in net worth and come out with millions of dollars of net worth should speak for itself. Why else would someone spend millions to be elected to a job that pays so little? Definitely not enough to make millions.

Creed

November 14th, 2011
9:46 am

I video won’t run.

term_limit_ted

November 14th, 2011
9:48 am

Too bad stories like the one from 60 Minutes doesn’t garner attention for more than a day. This will fall off the radar and we will continue to be barraged by irrelevant junk like Cain’s past possible sexual exploits and how Perry had a brain fart a week ago.

PK

November 14th, 2011
9:52 am

Any member of Congress, and their senior staff at least, should be required to have a real blind trust arrangement for any and all securities investments and should not be allowed to acquire real estate in areas where pending legislation could affect prices. This is a no-brainer. It is also a no-brainer that those scumbags would exempt themselves. It’s the gall of that bunch, the blatant hypocrisy that really jacks my BP.

Kyle Wingfield

November 14th, 2011
9:53 am

Good points, ByteMe.

Kyle Wingfield

November 14th, 2011
9:55 am

Creed: Hmmm…it was working earlier, but I’m having problems with it now, too. Let me look into it.

JC

November 14th, 2011
9:56 am

#rwcole: “Wouldn’t if be great if there was a group of people whose job it was to follow up on this kind of info and then tell the public about it?”

Here is one site: http://insidertrading.procon.org/view.answers.php?questionID=001034

Search the web, you’ll find a lot more.

JC

ragnar danneskjold

November 14th, 2011
10:00 am

Innuendo sells, actuality does not. As I never watch the Tiffany network, did they touch on Harry Reid’s amazing wealth accumulation during his tenure?

PK

November 14th, 2011
10:02 am

Well, what has to happen is that all of us who are enraged by this story need to write their reps and demand legislation that requires blind trusts (after all many appointed officials are required to use them, why not the bigger cheats?) Secondly, we also must demand an investigation of what has gone on before. With the same rules that apply to others who trade on inside information. You want to get something done? Don’t count on the other guy doing it – GET INVOLVED!

Ann Richardson

November 14th, 2011
10:03 am

I can remember coming back to the USA as a young woman who had spent 3 months touring Western Europe for 3 mos. with several friends, a “Europe on $10 a Day” trip. Seeing how much more our country had than still war torn WE and seeing East Germany, Berlin, with the Russian troops, wire, guard dogs, towers, Check Point Charlie, I kissed American soil upon returning as I was so very proud to be an American.

Now, at 73 yrs. old, I am not so proud. Our Congress is corrupt, our government dysfunctional, and our country is no longer a country to be proud of. We the people must take over and get rid of all the slim in Washington. Remember next November: That is when we should start getting rid of all the rats in Washington who are stealing our taxpayers’ money. These people do not deserve to live in a country of the brave and free.

Dave

November 14th, 2011
10:05 am

A friend from South Africa, now a citizen, seemed to put it all in perspective for me when she said that she observed prior immigrating here that the U.S. government, like most governments, is a “banana republic” where the “elected officials” seek only to enrich themselves, continue to invent and extract “taxes” to pay their “sponsors” (contributors) their “loan” back with interest, and forcibly control the population to bend to their whims ( laws ) enacted to continue the process in perpetuity.

Welcome to the Occupation

November 14th, 2011
10:07 am

If there are any television sets in Zuccotti Park, I hope they were tuned last night to “60 Minutes.” If so, the Occupy Wall Street protesters might have learned another reason to think the political class is at the heart of the problems against which OWS rails

I think the OWS protesters are perfectly well aware of the fact that it’s the political class that is the problem. The fact that they’ve been encamped at Wall Street and not Washington is only appropriate because of the inordinate power that industry enjoys.

LD

November 14th, 2011
10:19 am

“All in all, it was a good report on an apparent problem — but not quite good enough for us to know just how big of a problem.”

“How big” should never be a basis for a decision to halt unethical practices. Which day and how much and to whom are questions left to regulators – who operate with the necessary regulations.

As for the “proposals” in comments here, reprisal can never substitute for even handed justice.

Term limits leave lobbyists as the only powerful and continuous influence in Washington, or a State capitol. No thanks.

M.Baig

November 14th, 2011
10:21 am

Smacks of double standards.
Different sets of rules for Public and Congressmen.

MadMc44

November 14th, 2011
10:22 am

The problem goes deeper than the congress people making money on insider trading–it’s those people disclosing to their high roller contributors that something is about to happen–then getting a campaign chest kick back.

Kyle Wingfield

November 14th, 2011
10:26 am

Welcome: No, if they were “perfectly aware of the fact that it’s the political class that is the problem,” they’d be occupying Capitol Hill.

UGA 1999

November 14th, 2011
10:26 am

OWS is fading and fading fast. The movement is over. The thugs can go home.

Middle Molly

November 14th, 2011
10:30 am

Of course this is infuriating! I personally would love to see all money out of politics… limited public campaign finance, no lobbyists, no jobs for members of Congress or their families before, during, or after that person’s tenure in Congress, sharp limits as to what members of Congress and their families can invest in during and after their tenure in Congress. This stuff angers me as much as it should ANY decent citizen who really cares about this country.

But mixed in with these comments are attacks at the “Occupy” people. I have tremendously mixed feelings about the tactics and goals of the Occupy people. But I understand why they are out there and why they are distressed and why they are camping out in the cold, in unpleasant conditions, and risking getting arrested: They are as unhappy as the rest of us with the connection between government and business. They realize that the need for money to get into politics begins to corrupt the most ideal among us. They realize that the chance of making money while in office begins to corrupt the most ideal among us. And they realize that, unless government represents the people vs. business and Wall Street, the kinds of things discussed on 60 Minutes will continue.

How can the same people commenting here who disparage the “insider trading” of Congress also disparage the people who are manning the Occupations?

We’re all on the same side: We’re all disgusted and we want to see a government of, by, and for the people, established in this country.

Lil' Barry Bailout (Unexpectedly Revised Downward)

November 14th, 2011
10:34 am

The OWSers are protesting against the addicts. They should be protesting the dealers and kingpins in Washington.

That wouldn’t work for their Lord Obozo, though.

DannyX

November 14th, 2011
10:34 am

Wall St and the political class are joined at the hips.

UGA 1999

November 14th, 2011
10:38 am

DannyX…the “political class”??? hahaha

ByteMe

November 14th, 2011
10:39 am

they’d be occupying Capitol Hill.

But then they’d be called “terr’rists” and disappeared to Gitmo for reprogramming. This way, they get to scare the people who have bought our politicians. Seems right.

Lil' Barry Bailout (Unexpectedly Revised Downward)

November 14th, 2011
10:42 am

The lobbyists, the contributions, the PACs, all exist as a result of Washington taking so much power and exerting its influence over ever aspect of our personal and business lives. Except for that power, none of the attending corruption exists.

Libtards have to argue it’s the other way around, because government and power over their neighbors gets them sexually excited.

Democrats: Political perverts.

Middle Molly

November 14th, 2011
10:45 am

Kyle, most of the Occupy people are as aware of the corruption in government as they are aware of the greed on Wall Street. And there are Occupations in DC. There are many groups that are sympathetic to the Occupy movement that are targeting the connection between government and big business. The Get Money Out movement is a movement to pass a Constitutional amendment that will be strict constraints on campaign finance.

UGA 1999

November 14th, 2011
10:46 am

Do you think these guys voted for McCain?

http://www.liveleak.com/view?i=0b1_1321105308

Finn McCool

November 14th, 2011
10:46 am

I agree this should be stopped. Can we get a petition oing and get it to Isakson?

UGA 1999

November 14th, 2011
10:56 am

Bueller…..

maurauder

November 14th, 2011
11:04 am

“it’s the political class that’s the problem”
You’re missing the forest for the leaves. The problem is the huge money interests, the 1%, who pay the politicians to do their bidding. As long as corporations are people and massive campaign contributions are free speech the pols will always be paid. Duh

Lil' Barry Bailout (Unexpectedly Revised Downward)

November 14th, 2011
11:07 am

Incorrect, maurauder. The junkies pay the peddlers, not the other way around. If you want to stop people from trying to influence government, take away their power to pick winners and losers.

You’re just making excuses for Democrats and libtards.

Middle Molly

November 14th, 2011
11:08 am

Marauder, I think it is both: It is the huge money interests who have wayy too much influence, and it is the manner in which we choose our elected officials (the necessity of high-priced campaigns) and create our legislation (lobbyists) that are both corrupting and undermining our country— and have for years.

Kyle Wingfield

November 14th, 2011
11:12 am

OK, folks, there’s now a video posted here with excerpts from last night’s “60 Minutes” report. It appears that’s the best I’m going to be able to do at this point. The entire report can be viewed here.

carlosgvv

November 14th, 2011
11:13 am

Kyle I’m afraid we are far beyond a “potential for corrution among lawmakers”. Since most of them seem to be owned by Big Business, they are already rottern to the core. All we voters can do is a clean sweep in the 2012 elections and hope, against hope, that the next batch at least has some since of right and wrong.

UGA 1999

November 14th, 2011
11:17 am

UGA 1999

November 14th, 2011
11:18 am

Carlos, I think you are right but there in itself lies the problem. The line between right and wrong has become so faded that many people in today’s society do not know the difference.

Middle Molly

November 14th, 2011
11:21 am

carlsgvv, as long as so much money is required to run for public office.. and to finance the NEXT campaign for public office.. as long as lobbyists are permitted to walk freely back and forth in DC and in the states… we will have corrupted public and elected officials. We need to Get Money Out of politics and then we will see improvement. The amount of money that it takes for someone to get elected to Congress in a big media market is in the millions. That’s the biggest problem right there.

Lil' Barry Bailout (Unexpectedly Revised Downward)

November 14th, 2011
11:22 am

Democrats in Michigan force family members caring for a disabled relative to contribute $6 million every year to the SEIU. SEIU members donate to Democrat politicians in Michigan.

Now I understand what the OWSers are protesting!

Oh, they aren’t protesting that? Never mind.

Middle Molly

November 14th, 2011
11:23 am

Lil Barry, are you foolish enough to think that Repubs wear halos when it comes to their personal campaign finances and their ethics?

UGA 1999

November 14th, 2011
11:25 am

Middle….Halos? No. But they do not wear horns either.

Lil' Barry Bailout (Unexpectedly Revised Downward)

November 14th, 2011
11:28 am

Molly, I’d be happy if the power of both Democrats and Republicans was reduced. We have way too much government. Too much influence over our personal lives, and too much interference in the free market.

Take away their power and the “moneyed interests” will go away.

Ayn Rant

November 14th, 2011
11:39 am

Why worry about insider trading by memebers of Congress? Worry instead that each member of Congress depends on bribery (”taking campaign contributions”) and extortion (”soliciting campaign contributions”) for his election.

No even one of them depend on campaign contributions from registered voters in the district they seek to represent.

HDB

November 14th, 2011
11:48 am

Lil’ Barry Bailout (Unexpectedly Revised Downward)
November 14th, 2011
11:28 am

Do you HONESTLY think that the free market can police itself?? An unregulated market would do nothing but screw over the consumer!! Regulations are necessary to ensure that the marketplace functions as it should!!

carlosgvv

November 14th, 2011
11:50 am

UGA 1999 & Middle Molly

Unfortunately, you are both all too correct. Money is the bottom line in American politics and, at least among our politicians, sociopathic personalities seem to increase with each and evey election.