Members of Congress profit from stock trades in companies affected by their legislation
An analysis by the Washington Post has determined that between 2007 and 2010, 130 members of Congress or their families engaged in hundreds of millions of dollars of transactions involving stock in companies that were lobbying before their committees.
This practice is neither illegal nor forbidden by Congressional ethics rules, which allow members to act in ways that benefit themselves as long as they are not the sole beneficiaries.
The paper’s researchers examined all 45,000 congressional stock transactions revealed in financial disclosures over the four-year period and found that almost one out of every eight involved companies affected by bills that were before either Congress as a whole or the lawmakers’ committees at the time.
Slightly more Democrats than Republicans took part in such behavior — 68 compared to 62 — but the three most glaring examples citied by the Post all featured Republicans.
According to the paper, “Sen. Tom Coburn (R-Okla.) reported buying $25,000 in bonds in a genetic-technology company around the time that he released a hold on legislation the firm supported. Rep. Ed Whitfield (R-Ky.) sold between $50,000 and $100,000 in General Electric stock shortly before a Republican filibuster killed legislation sought by the company. The family of Rep. Michael McCaul (R-Tex.) bought between $286,000 and $690,000 in a high-tech company interested in a bill under his committee’s jurisdiction.”
The Post notes that earlier this year, Congress passed the Stock Act to bar members of Congress and top administration officials from using confidential information acquired on Capitol Hill to guide their stock trades. However, the act says nothing about members of Congress trading stocks in companies even as they write and pass laws that affect those companies’ profits.
Lawmakers contacted by the Post defended themselves by saying the transactions were coincidental or were handled by brokers or by their wives without their knowledge. However, the former ethics lawyer for President George W. Bush, Richard W. Painter, said that was not a sufficient answer and that members of Congress should set up blind trusts if they wanted to retain public credibility.
“People who are taking actions for venal and nefarious purposes might make the same argument you’re making about your innocence,” former Rep. Brian Baird (D-WA) explained. “That’s why if there is an appearance of an impropriety, there just might be an impropriety. Members need to bend over backwards to show people they are there for the good of the country.”
Photo AFP Photo/Jewel Samad