Congress Members Allegedly Have Immunity From Insider Trading
Boehner, R-Ohio, and Pelosi, D-Calif., allegedly bought and sold stocks in companies at the same time legislation involving those firms was being discussed in Congress by using “inside” information to benefit themselves financially, CBS said.
Boehner, among other lawmakers, invested money in health-insurance-company stocks during the 2009 debate over healthcare, according to Hoover Institute research fellow Peter Schweizer in his latest book “Throw Them All Out,” The Daily Beast reports.
A Boehner spokesman said the healthcare trades were made by Boehner's financial adviser, who Boehner consults about once a year.
Pelosi and her husband invested in credit-card company Visa Inc. in 2008, the first sale of a stock by a private company to the public, Schweizer said.
The Pelosi bought 5,000 shares of the company at an initial $44 per share for a total of $220,000. The stock jumped to $64 a share, or $320,000, two days later, The Daily Beast said.
Pelosi denied she invested after learning information she could only obtain through her position in the House, CBS said.
No insider-trading cases will be brought against Congress members because case law requires an offending insider bear fiduciary responsibility at the company involved.
Schweizer, a conservative author and speaker, said in his book Congress members will not be tried because of the House and Senate rules do not cover insider trading but will affect the members’ reputation.
Schweizer reveals and analyzes roughly 12 members of Congress’ financial disclosures in his book, such as Pelosi, Massachusetts Sen. John Kerry and House Representative Spencer Bachus from Alabama.
Kerry, Schweizer found, was involved in drug company trades in 2003 and 2007. He completed 111 stock transactions, with 103 buys, that resulted in at least $500,000 in capital gains and as high as $2 million, The Daily Beast said.
Schweizer said Kerry’s success was due to his shaping of trades that anticipated the effect of government policy.
A spokesman for Kerry said Kerry did not buy, sell or trade stocks and that his finances are in family trusts managed by independent trustees with whom he does not communicate, The Daily Beast said.
In his book, Schweizer offers some prescriptions to insider trading in Congress such as laws forbidding members of Congress from trading stocks of companies overseen by their committees, but he doesn’t expect any reform to be initiated by Congress members.
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