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trade, taking part in Visa’s IPO while legislation that would have hurt Visa was pending — and which was later withdrawn, only to be reintroduced by the Senate and passed two years later — seems more serious than insider trading.)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
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102 comments Add your comment
UGA 1999
November 14th, 2011
11:50 am
HDB….”unregulated market would do nothing but screw over the consumer”….THAT IS THE POINT. If they do the consumer does not buy from that company any more and they go out of business. Keep the government out of business.
Murdock
November 14th, 2011
11:54 am
http://prairiefirenewspaper.com/2011/10/congress-beats-the-average-in-the-stock-market-that-is
There is your “how big of a problem” That is a 16 year study done by academia and “The results showed that members of Congress beat market returns by a remarkable 6 percent annually over the study’s full timeframe. To put this congressional clairvoyance into perspective, in any given year only 30 percent of professional mutual fund managers will show above-benchmark performance, and over a 17-year timeframe, barely 3 percent will beat the market at all, much less by 6 percent. ”
I’d say that is a HUGE problem
JC
November 14th, 2011
11:58 am
There is no good reason or excuse for Congress to be exempt from the insider trading laws. Be it a loophole or lack of laws, Congress should be held to the same standards as everyone else. It is appalling that so many of these folks go in with little or no net worth and come out with millions. I personally am tired of paying increasingly high taxes in order to make others rich and powerful. The greed and corruption must stop before it destroys this great country.
Lil' Barry Bailout (Revised Downward)
November 14th, 2011
12:19 pm
HDB, how is giving Solyndra $500 million “regulating”?
Didn’t think so.
Lil' Barry Bailout (Revised Downward)
November 14th, 2011
12:22 pm
Guess who were the last folks to push for having Congress live by the same laws they subject us mere commoners to? That’s right, Speaker Gingrich and the Congress elected in 1994.
Democrats opposed the effort. It was called the “Contract With America”.
HDB
November 14th, 2011
12:27 pm
UGA 1999
November 14th, 2011
11:50 am
Doesn’t work that way! Do you honestly think that BP, Exxon…or any company not required to follow certain regulations would police itself or the marketplace if not required?? If you look at the environmental damage done on the US/Mexican border because of LACK of regulations…..
Now don’t get me wrong….the market can be over-regulated….but I don’t trust Corporate America to police itself…….
Lil’ Barry Bailout (Revised Downward)
November 14th, 2011
12:19 pm
You’re mixing your metaphors again……..
Lil' Barry Bailout (Revised Downward)
November 14th, 2011
12:29 pm
Doesn’t work that way! Do you honestly think that BP, Exxon…or any company not required to follow certain regulations would police itself
———-
Soooooo…you don’t think BP was regulated at the time of their accident last year?
UGA 1999
November 14th, 2011
12:39 pm
HDB…they would not have to police itself. The public would do it for them.
Jefferson
November 14th, 2011
12:43 pm
George Purdue is the best example, of what office can do to your finances. Graves is going to be another.
HDB
November 14th, 2011
12:48 pm
UGA 1999
November 14th, 2011
12:39 pm
Still wouldn’t work! There are still companies operating using unscrupulous business practices that are still in business; the public won’t (in certain cases) or can’t (in others) police the market. Regulatory agencies handle that for us….and places the onus on the corporation (as it should be!))….
Lil’ Barry Bailout (Revised Downward)
November 14th, 2011
12:29 pm
Not as it should have been!! Note how the lack of regulatory control by the Interior Department…caused by the gutting of regulations by the oil industry AND the Bush Administration played a factor in the accident!! If the government had made BP follow the same regulations as was in the North Sea pertaining to deep water drilling…the accident may NOT have happened!!
UGA 1999
November 14th, 2011
12:52 pm
HDB…Ok lets use practical small terms analogy. If you were to start a business selling “doodles”…..would you want the government telling you how much you could sell your doodles for an how much of a profit you could make?
HDB
November 14th, 2011
1:01 pm
UGA 1999
November 14th, 2011
12:52 pm
The government CAN’T tell me how much I can sell my product….nor my profit margin…that’s the function of what the market can bear! The government CAN tell me what practices I must use to protect my workers and the environment; the government CAN tell what practices I can use to protect my company in the marketplace (anti-monopolistic practices)….
Too many are thinking that regulations PREVENT business success in the market; I see where regulations ENSURE business success in the marketplace!! Not ALL regulations are bad for business!!
UGA 1999
November 14th, 2011
1:10 pm
HDB…The DO prevent a businesses success in the market. Do you remember when Bill Gates had to testify before Congress because of the size of Microsoft? This is why Obama says “no business should ever be too big to fail”.
HDB
November 14th, 2011
1:17 pm
UGA 1999
November 14th, 2011
1:10 pm
I disagree! Remember Netscape? They competed with Microsoft…but the marketplace made them extinct! Note Firefox and Google Chrome; they’re competing with Microsoft in a regulated marketplace…..they aren’t crying!! As you brought up Microsoft…..note how the EU fined them for violating Eurpoean regulations…..they adjusted and still maintain market share!!
Too big to fail?? That came from Hank Paulson and TARP…..didn’t it??
Darwin
November 14th, 2011
1:19 pm
“CBS said it used as a starting point for its story the research of Peter Schweizer, a fellow at the Hoover Institution, a conservative think tank at Stanford University. About a year ago, he began work on a book about “soft corruption” in Washington, CBS reported. The network said it had independently verified the material it used.” You’re right Kyle – never trust conservatives.
Grazer
November 14th, 2011
1:21 pm
Kyle:
You frankly sound naive when you make the case for return of hoovervilles. It is as if you actually believe it’s the true seat of power in this country is in Washington. I think it’s clear to most occupy protesters that the 60 minutes case is further proof that US Congress is merely the legal dept of the big business community (symbolically commanded from Wall St) whose primary concern to ensure investments are protected.
Lil' Barry Bailout (Revised Downward)
November 14th, 2011
1:29 pm
So when government regulation fails, it’s because there wasn’t enough regulation.
Is it just a coincidence that the Democrat answer to every problem, including government-created problems, is always more government?
Rockerbabe
November 14th, 2011
1:32 pm
If there is money involved, especially big money, then it is probably wide-spread. Only two elected officials have signed on the co-sponsor legislation to outlaw this practice, so there is your answer.
HDB
November 14th, 2011
1:35 pm
Lil’ Barry Bailout (Revised Downward)
November 14th, 2011
1:29 pm
Note…there wasn’t enough ENFORCEMENT of government regulations!! Note how Republicans cut the ENFORCEMENT arm of regulatory agencies…….and the screw-ups that summarily happened!! You would think that the insurance of a equal marketplace so that capitalism can thrive would be a conservative idiom……..
Is it just a coincidence that the Republican answer is less regulation……and the people consistently get screwed by the corporate overlords??? (Can look at this both ways, LBB….)
AngryMobVoter
November 14th, 2011
1:43 pm
This is just one more example of how our system is broken. Our system rewards politicians who buy votes with government spending while not incurring the political cost of actually paying for that spending. The result is we are a country with huge public debt and a population of people who have become reliant on the government to live. Meanwhile some if not all politicians take advantage of their positions for financial gain and give themselves countless perks the average person can only dream about.
Frank Noonan
November 14th, 2011
1:46 pm
How big a problem? How big a problem? If one of our leaders (HA! HA!) is doing it it’s a BIG PROBLEM!
“Congress has never done more for consumers nor has the Congress passed more critical reforms of the credit card industry than under the Speakership of Nancy Pelosi”
substitue less for more in the sentence above and you’ve gotten it right.
Stan556
November 14th, 2011
1:55 pm
They just plain shouldn’t be exempt from insider trading laws and any lawmaker that doesn’t support the Stock Act should be suspect. It would be in good faith for all politicians running for office to support this bill. Also, the information brokering spoken of at the end of the segment is appalling.
TimeForDIRECTDemocracy
November 14th, 2011
1:58 pm
It should be pretty clear to anyone that Washington is inhabited by a bunch of crooks that abuse the American people as much as King George ever did. They do not have the consent of the governed with an 8% approval rating. They are just a den of vipers and thieves.
What we need is to cut out the middle man. In the technological age there is no need for representatives when we can represent ourselves.
If we had direct democracy where voting eligible American has the chance to vote on each bill would we have seen the outrages of the bank bailout? Would these wars continue? Would there be any of this outrageous insider trading??
OF COURSE NOT!
yuzeyurbrane
November 14th, 2011
1:59 pm
It’s more than just Congress. How many Ga. governors have enriched themselves while in office? Nothing like being let in on the ground floor of a good deal and being lent the money to make the purchase. And some wonder why voter participation has declined.
Don't Tread
November 14th, 2011
2:14 pm
Government insider trading is just like government creative accounting…perfectly OK for them but lands anyone else in jail.
#occupy my desk...
November 14th, 2011
2:18 pm
the next time I hear anything about 1% or 99% I am going to vomit with rage… my wife and i are considered “rich” according to Obama’s proposed oncome tax modifications but we are anything but. we aren’t ‘millionaires, BILLIONAIRES’ as he proclaims from behind a teleprompter – and we have been paying our ‘fair share’ to the tune of 1/2 of our income between state, federal and property. nothing makes me sigh louder than a bunch of lowlifes, with ZERO financial stake in the game, protesting against me on my behalf – make sense?
Darwin
November 14th, 2011
3:03 pm
If you’ve been paying 1/2 your income in taxes, you need an accountant.
R. Stroz
November 14th, 2011
3:18 pm
Congress has exempted themselves from Social Security. Is anyone surprised they are exempt from insider trading as well?
Edward
November 14th, 2011
3:20 pm
Sure, get rid of the regulations and enjoy the self-enforced “clean air and water” and “financial certainty” that the people of China currently enjoy. You people that believe the market would ensure clean air and water are seriously deluded. Sad that you actually believe the total BS you spew.
Dusty
November 14th, 2011
3:24 pm
Wel, I seldom watch 60 minutes because they seem a bit slanted at times. I did like Andy Roony but now he is gone.
I am proud to say that Georgia’s Gov. Nathan Deal has put his money into a trust. That means whoever heads the trust handles the business. That leaves Deal out of money decisions. Sounds good to me. Boehner probably has a stock broker or someone handling his finances. That is probably what he meant when he said he had not made any deals.
So congress gets richer. And who else in Washington?
I do enjoy an honest governor. But then, most people in Georgia are honest. Well, the ones that have lived here a long time are honest. Even a few of the drop-ins. We need more people in congress from Georgia.
GT
November 14th, 2011
3:25 pm
We seem to be in the throws of inside trading investigations now days. Wall Street is a great place to bury bodies for Congress or terrorist or drug dealers or anybody who needs money but no smoking gun, or even tax evasion. Very similar to disposing bodies in a junk yard. Madoff could not have stolen billions if this operation was not Swiss Cheese. What amazes me is the dullness of a Republican Congressman to make economic policy yet the genius to steal money whether from Wall Street or lobbyist which was the week before this on 60 Minutes. Dumb like a FOX as they say.
Velma
November 14th, 2011
3:32 pm
Forget Occupying Wall Street. They need to be Occupying K Street.
Lil' Barry Bailout (Unexpectedly Revised Downward)
November 14th, 2011
3:45 pm
Occupy K Street? Why? They’re just a bunch of folks angling for goodies and cash the government is going to hand out, and they just want their fair share.
Perhaps you should occupy Pennsylvania Avenue, where the campaign cash gets recycled into Solyndra loans, as just one example.
Doug Padla
November 14th, 2011
3:49 pm
“Where there is smoke there is fire”. Insider trading, lobbyist, no term limits, lifetime jobs, and rules that exempt them but hold us accountable. I say limit their terms, public funding of their elections, campaigning for one month before the election and what applies to the general public, applies to them.
Truth Squad
November 14th, 2011
3:52 pm
The Occupy Movement is just getting started folks. This country’s workers have grown soft and forgotten our roots. Check your U.S. history books folks, every time inequality and systemic corruption has peaked in this country, there has been a protest movement by ordinary working folks.
The worse thing that can happen is to ignore the fact that we have a corrupt Congress- both parties- and we the people are the ones responsible, not some shadowy third party known as “the government”.
The Occupy Movement will succeed because they are correct about the obsolescence of the idea that tax breaks for the wealthy, immunity from the law by Congress, and even more deregulation for the financial services industry is the right path for the 21st Century United States. The idea that this country, or any other one for that matter, can survive without a thriving Middle and Working Class is fantasy.
The Occupy Movement is just getting started. I still do not understand how people who work for a living and believe in the right to assemble can have a problem with the movement. Get use to it, it is here to stay and it is global.
Is Congress picking stocks with insider information? | News of Business – Marketing | Forex | Gold | Money
November 14th, 2011
3:57 pm
[...] to Decoder: We want to know what you think about the 60 Minutes piece. Shoot us a line hereRead this piece from the Atlanta-Journal Constitution that asks some questions about 60 Minutes’ reporting and [...]
joe
November 14th, 2011
3:58 pm
Most of congress needs the boot…but there should be a special place reserved in Hades for Princess Pelosi…She makes me sick.
nightmare
November 14th, 2011
4:45 pm
Simpely members of Congress should pass the damn act, or quit. Their choice.
Hillbilly D
November 14th, 2011
5:19 pm
Require lawmakers to put all or most of their assets in blind trusts while they’re in office.
Good idea but it’ll never happen.
As to all the questions, a pretty good rule of thumb is, if it smells like you stepped in something, you probably did.
Lil' Barry Bailout (Unexpectedly Revised Downward)
November 14th, 2011
5:46 pm
we the people are the ones responsible, not some shadowy third party known as “the government”.
—————————
It’s not “shadowy”. We know who they are and where they work. We voted them into office. Every government employee works for them. We voted them into office.
Lil' Barry Bailout (Unexpectedly Revised Downward)
November 14th, 2011
5:48 pm
The Occupy Movement will succeed because they are correct about the obsolescence of the idea that tax breaks for the wealthy
———————–
The wealthy are carrying you, so quit whining, little girl.
Streetracer
November 14th, 2011
6:11 pm
GT:
So you are saying that Corzine was a Repub?
Martin Williams
November 14th, 2011
6:43 pm
Kyle, the congressional report on 60 minutes was not a surprise to me at all……..told you before this is why doctors, lawyers leave there professions to beome a politician. Take our own Tom Price, a well qualified doctor, going to Washington is the easiest way to make money. You become a lobbiest after your congressional days are over. Kyle, do you know the most currupt Co-orperation in the world is the United States congress, think about it……….I always tell people that, the Dems and the GOP are the same people behind closed doors.
Not So Casual Observer
November 14th, 2011
6:48 pm
Truth Squad,
If you are lining up behind a group of criminals and rapists – Democrats, OWS or Republican – then there is no hope.
The OWS crowd should be an embarrassment to you and not praised. Colbert interviewed an appointed spokesperson for the New York OWS crowd and she gave her name as “Ketchup” – that says all that need be said.
The insider trading, when added to the posh retirement plan, when added to the exemption from ObamCare, when added to the personal health care plan, when added to the gutting of Social Security, when added to the failure to secure the borders, when added to the “gifts to supporters program” examples like Solyndra, when added to the “earmarks for campaign contributors”, when added to the exemption from prosecution for the acts perpetrated by the former Penn State coach, etc., etc. etc. – all seems to call for an end to the Democratic and Republican parties.
Nancy Pelosi denying she profited does not make her honest BUT she believes in the old deny, deny, deny – until the story fades.
Obama is, and will continue to be, a joke (c’mon Joe Biden -really?); Romney is a joke; Perry is incapable of expressing a coherent point; Cain is unlikely to have committed the acts claimed but is still short on ability; Santorem is, well, insignificant; Bachman has been run over by MS media; Paul has been pushed aside by the MS media; Gingrich is the most capable but damaged; – all in all a sad group!
Truth Squad
November 14th, 2011
8:57 pm
@Not So Casual Observer, why do you Republicans have such problems with the the truth even when it is written out for you?
Reread my comment and perhaps, this time, you will not skip the part where I assert both parties are corrupt!
That said, one of the corrupt parties is full of sociopaths who like blaming victims, booing gay soldiers,insist on using governmental power to intrude on personal and intimate decisions, worshiping the rich, and in general,hating people who are different from them. The other corrupt party at least pays lip service to some notion of the common good (even while lining their pockets).
Until we the people remember we run the country and demand better choices, I’ll be voting for the party that will screw me least. At this time, that would not be the Republican Party.
hyperflow
November 14th, 2011
9:20 pm
#Occupy supporter here.
The speakers of the house of representatives do not speak for, or represent the average American.
To all Left, Right, Red, Blue, and all independent thinkers: unite and throw these disgraced “representatives” out of office. They should be looking for the end of the unemployment line, and be happy when they find it even still exists after THEIR debacles in OUR house.
This is corruption, plain and simple.
Should be easy to come together on, all parties, all walks of life.
Too long didn’t read? TLDR
Insider trading? Out of office.
Includes: Boeher, Pelosi, others.
Republican, democrat, independent, doesn’t matter.
Unify in Justice.
hyperflow
November 14th, 2011
9:21 pm
Occupy supporter here.
The speakers of the house of representatives do not speak for, or represent the average American.
To all Left, Right, Red, Blue, and all independent thinkers: unite and throw these disgraced “representatives” out of office.
This is corruption, plain and simple.
Should be easy to come together on, all parties, all walks of life.
Simple Formula
———————
Caught Insider trading? You are Out of office.
Includes: Boeher (R), Pelosi (D), others (?).
Republican, democrat, independent, doesn’t matter.
Unify in Justice
Lil' Barry Bailout (Unexpectedly Revised Downward)
November 14th, 2011
10:07 pm
Guess what, hyperflow? Boehner and Pelosi don’t work on Wall Street. They’re the dealers, the kingpins. You OWSers are protesting the junkies on Wall Street and K Street. You should be protesting the White House and the Capitol.
Of course, that might make your masters in your preferred political party upset.
Finally: A tax I would like, but which Congress would shun | Kyle Wingfield
November 15th, 2011
5:10 am
[...] CBS’s “60 Minutes” caused a stir with its report Sunday, based on a forthcoming book by Peter Schweizer, about members of Congress [...]
Report: Emails show White House seeking to delay Solyndra layoffs | Kyle Wingfield
November 16th, 2011
5:02 am
[...] Oddly, indeed. Read the whole thing. The Solyndra/Obama administration coziness is just one more example of the kind of crony capitalism that all Americans — regardless of party, ideology or feelings about the particular issue of renewable energy sources — ought to be tired of hearing about. [...]