Political Corruption Sweepstakes: Casino Capitalism on Capitol Hill

Photograph Source: SarahDepper – CC BY 2.0

Everybody knows West Virginia senator Joe Manchin is a congressional appendage of the fossil fuel corporations. They donate to him, and he votes to make them happy. It helps that he’s also a coal baron. Nothing like making laws that enrich the lawmaker. But in a congress of multimillionaires, Manchin is not alone.

Just over a month ago, House speaker Nancy Pelosi and her husband Paul Pelosi bought options worth millions in technology stocks. This was after her December 16 remarks that the U.S. is a “free market economy,” and law-makers should be allowed to participate in the stock market (translation: “I’m busy making a killing, so shut up about ethics”). The next day and on till December 21, she bought options worth millions for stocks in CRM, Walt Disney, Google and Roblox. To say that there was something unseemly about this would win you a prize for understatement.

But Pelosi’s financial adventures are by no means the most shocking. For those with memories longer than the latest news cycle, there was the senatorial stock scandal of January 2020, when Americans received an unambiguous demonstration of why lawmakers should be blocked from trading individual stocks. That was when then GOP Georgia senators David Perdue and Kelly Loeffler, two eminences who are, not to put too fine a point on it, absolutely loaded, found themselves in the midst of an insider trading hullaballoo.

You see, these two senatorial big-shots had attended a January 24, 2020 closed briefing on covid, predicted soon to rage like wildfire. Promptly after the meeting, Loeffler and her husband, Jeffrey Sprecher, the chairman of the New York stock exchange (of course), traded millions of dollars worth of stock. So did Perdue. These massive trades occurred right before the stock market crashed. Incidentally, revelations of such stock bonanzas soured the public on the two senators, both losing their re-election bids to Democrats in a previously reliable and ferociously red state.

Also selling stock back in that pre-covid Paleolithic era were senators Diane Feinstein, Jim Inhofe, Richard Burr and others. The whole morass stank. Especially since these trades were all likely outlawed by the Stock Act, which bans using non-public information for private profit. But none of these luminaries were prosecuted or even reprimanded. Not so much as a slap on the wrist. Oh no. They’re in congress. They’re exempt from the law. They’re even exempt from concealing their exemption. They flaunt it. Worse, these are only a few of the most egregious examples of legislators gorging at the public trough. These are the ones that caused a hubbub. Countless others doubtless zip right under the radar.

So it was only fitting this past January 12 that Dem senators John Ossoff (Georgia) and Mark Kelly (Arizona) “introduced an anticorruption bill,” as Sharon Zhang reported for Truthout, “that would ban members of Congress and their families from actively trading stocks.” It’s about time. The millionaires in congress will no doubt whine that such onerous constraints shrink the pool of congressional talent. Yes, they will indeed shrink the pool of swindlers and swinish cheats. Let’s hope it leaves them high and dry, with no means of drifting into a congressional berth.

The act requires members to place their stocks in a blind trust and to divest any that can’t be so placed. The new law would fine violators their entire congressional salary. According to senator Kelly’s press statement, he and Ossoff “are two of ONLY 10 sitting members of Congress to put their own stock portfolios in blind trusts.” Kelly also said: “This legislation I am introducing with Senator Ossoff will put an end to corrupt insider trading and ensure that leaders of Congress focus on delivering for their constituents, not their stock portfolios.”

Ossoff agreed. “Members of congress should not be playing the stock market while we make federal policy and have extraordinary access to confidential information.” Pelosi, Manchin and others may squawk in protest that such purity is inhuman, but corruption is on the loose and the public knows it. According to Zhang, “reporters found that 54 members of congress failed to properly report their stock trades in 2021, a move that is in violation of the Stock Act.” Will Ossoff and Kelly’s fines deter frenzied wheeler-dealers like Republican congressman Pat Fallon from Texas, who in the past year traded stocks worth tens of millions of dollars? We shall see.

The proposed fines are a drop in the bucket for most of congress’ multimillionaires. But these fat cats didn’t get rich forking over penalties of more than $10,000 per month. So expect a geschrei of outrage from capitol hill. With Pelosi worth at least $46 million and given her pronouncements on the subject, it’s unlikely she’d want to relinquish her golden goose. So we’ll see if this bill, the “Bar Congressional Stock Trading Act,” ever actually makes it, in any form, to the House floor.

But something’s in the air, and it’s not just covid. On January 24, a bipartisan group of congressmembers sent a letter pushing Pelosi and minority leader Kevin McCarthy to “swiftly bring legislation to prohibit members of Congress from owning or trading stock” to a vote. McCarthy’s already mulling such an interdiction, should the GOP win the midterms. That, one would think, would shame Pelosi into action. Indeed, having McCarthy seize the moral high ground on any issue is not easily conceivable. Yet on this, he has done so and now gazes down from his lofty, arctic perch of superior ethics at the grabby House speaker, far below.

“Perhaps this means some of our colleagues will miss out on lucrative investment opportunities,” the congressional epistle says. “We don’t care. We came to Congress to serve our country, not turn a quick buck.”

Twenty-seven House members, as dissimilar as left-wing squad member Rashida Tlaib and Trump pal Matt “The Feds Are After Me” Gaetz, signed this letter. And when those two find something so objectionable that they agree to forbid it, you know it’s rotten. Meanwhile the public approves. According to one recent poll, 78 percent of Republicans, 70 percent of Democrats and 80 percent of Independents think their lawmakers should be barred from trading stocks.

There’s a reason for that. People long ago caught on to the grift – they know darn well that legislators stuff their pockets at the public’s expense. Bad enough only moneybags can afford seats in congress, because basically you have to buy one and the sticker shock, for most mortals, is fatal. But then, using the sinecure to fatten your portfolio? You know the word for that – it’s disgusting.

Eve Ottenberg is a novelist and journalist. Her latest book is Hope Deferred. She can be reached at her website.