Photograph Source: SWinxy – CC BY-SA 4.0
Corruption in congress continues apace. Legislators get the inside skinny on a particular industry, including specific companies, and then make a killing executing stock trades on this illegal insider knowledge. A recent egregious example is Florida Democrat Lois Frankel. This representative sold shares of First Republic Bank, which was collapsing, and bought stock in the bank that took it over, namely J. P. Morgan. Frankel first sold her First Republic shares on March 16, and on March 22, “Frankel also purchased shares in J.P. Morgan,” according to Newsweek, May 1. The Treasury department started arranging bank actions to help First Republic March 16. So the bank had been in big trouble before that, the government knew about it, and this was the environment in which Frankel made her trades.
Amid current banking woes generally, “several lawmakers are facing questions about recent stock trades, involving First Republic Bank.” Utah GOP representative John Curtis and Oregon Dem Earl Blumenauer “also reported trades of First Republic Bank stocks leading up to its failure on Monday.” Meanwhile “shares in First Republic…fell more than 75 percent last week” (the last week in April), Newsweek reported “after the bank announced that depositors withdrew $100 billion in March.” Suffice it to say, the congressional trades look not just fishy, but outright crooked.
Right on schedule, two House members from opposite political poles propose the umpteenth piece of legislation to wrestle the monster of congressional stock trading corruption into some semblance of respectability. Numerous other such bills preceded this. They went nowhere. What makes this one different is that Nancy “I’ll Trade Whatever Stocks I Want” Pelosi is no longer House speaker. She stood implacably in the path of any effort to clean up congressional financial depredations. She is now gone from the House speakership. So New York Dem Alexandria Ocasio-Cortez and Florida Republican Matt Gaetz teamed up.
Their bill bans congress’ legislators from trading stocks, period. “The Bipartisan Restoring Faith in Government Act,” according to Business Insider May 3, “would prohibit Congress members and their spouses and any dependents from trading individual stocks.” As AOC said May 2, “The ability to individually trade stocks erodes the public’s trust in government. When members have access to classified information, we should not be trading in the stock market on it. It’s really that simple.” Now all we need is for AOC and Gaetz to sponsor a law prohibiting so-called justices on the supreme court from taking bribes, and we’ll be on our way to a cleaner government, one the public might actually esteem. This would improve on congressional reluctance to resort to the punishment available to it – when the supremes misbehave by enjoying expensive favors from billionaires who have matters before the court – namely impeachment.
Earlier, on April 18, two senators, Oregon Dem Jeff Merkley and Ohio Dem Sherrod Brown led 21 senators to introduce the ETHICS Act. This bill bans members of congress from owning or trading stocks. “Congressional stock trading is deeply corrupt,” Merkley said. “We are elected to serve the public, not our portfolios. And no member should vote on bills biased by the character of their holdings.” So both chambers of congress busy themselves with curing the malady of malfeasance afflicting the legislative branch. It is high time.
Because the past is a lousy precedent. Insider discreetly notes that Pelosi and “her husband Paul Pelosi have long been scrutinized for the extensive stock trading done by Paul.” If this sounds understated, so was the scrutiny. Pelosi made tons of money in the market while House speaker, and no one ever effectively lifted a finger against it. She was also quite stubborn about her right as a capitalist to trade stocks while in office, whatever the optics were. They were terrible, and they weren’t merely “optics.”
Pelosi backed the CHIPS PLUS bill in July, really pushed for it, and it became law in August. That act provided $52 billion in funding for semiconductor manufacturing grants and investment tax credits for the chip industry. It benefited Pelosi due to multimillion dollar stock trades she disclosed the same day she swung her weight behind CHIPS PLUS. So one could be forgiven for concluding that congress is for sale and that we have the most corrupt national legislature money can buy. Indeed, according to the New York Times September 13, “more than 3700 trades reported by lawmakers from both parties posed potential conflicts between their public responsibilities and private finances.”
Since the scandal of congressional insider trading blew up back at the pandemic’s start in January 2020, various senators and representatives tried to respond legislatively. Their efforts generated headlines, but not much else. That’s because there is what can only be called a conspiracy in congress to prevent anyone from interfering with this corruption. I use the term “conspiracy” deliberately. It is so often abused and misused that it’s easy to forget that actual instances of it do exist. The conspiracy to continue congressional corruption is one. It does not mean that weirdo lawmakers meet in back rooms and plot how to block legislation that hinders their wildly profitable grift. They don’t have to. It’s much easier than that. All they have to do is not vote for bills that threaten their cheating and its ill-gotten pelf. And they can pretty much count on their view snagging a majority of the votes.
The multimillionaires who swarm in congress have no intention of abiding by the Stock Act. Passed in 2012, it bans insider information but permits stock trading for congress critters. They ignore the insider ban so promiscuously that it has become an embarrassing disgrace. Surprising no one, it looks like a lot of those trades permitted by this law nevertheless involve insider info. The Times article reported on this back in September. Insider followed this up September 29, naming 72 legislators who violated the Stock Act.
Sometimes voters hold these crooks to account. That happened to Georgia’s GOP senators Kelly Loeffler and David Perdue, whose trades based on inside information exploded into headlines in 2020. They had attended a closed briefing on covid and learned it would soon become a plague, whereupon they executed millions of dollars worth of trades just before the stock market crashed. The public understood darn well what this meant, and neither senator was re-elected.
That, sadly, is the only leverage we have against these greedy politicians so far. If Gatez and AOC’s bill survives to become law, that would change the game. But don’t hold your breath. We’ve traipsed down this deceptive path too many times before. Instead, throw the bums out.