CBS: Insider trading OK for Congress

Nov. 14, 2011 at 4:30 AM
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WASHINGTON, Nov. 14 (UPI) -- House Speaker John Boehner and House Minority Leader Nancy Pelosi engaged in insider trading that's legal for U.S. members of Congress, CBS News reported.

Boehner, R-Ohio, and Pelosi, D-Calif., are among a number of lawmakers who allegedly bought and sold stocks in companies about the same time legislation involving those firms was being discussed in Congress, the network's "60 Minutes" program reported Sunday.

The lawmakers used the "inside" information obtained as a result of their positions to benefit financially, the TV news magazine said.

The lawmakers denied the allegations.

The questioned investments were legal, if unethical, because federal insider-trading laws do not apply to members of Congress, Peter Schweizer, a fellow at Stanford University's conservative-libertarian Hoover Institution think tank, told the program.

"The people who make the rules are the political class in Washington," Schweizer said. "And they've conveniently written them in such a way that they don't apply to themselves."

Boehner was among a number of lawmakers allegedly trading healthcare stocks during 2009's healthcare debate, CBS said.

Boehner, who was House minority leader at the time, led the opposition against the so-called public health-insurance option that called for a government-run health insurance agency to compete against private carriers.

Days before the provision died in Congress, Boehner bought health-insurance stocks, all of which allegedly went up in price, CBS said.

Boehner, who declined to be interviewed for the program, said during a news conference when asked by CBS that he had "not made any decisions on day-to-day trading activities in my account -- and haven't for years."

"I don't -- I do not do it, haven't done it and wouldn't do it," he said.

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 participated in at least eight initial public offerings -- the first sale of stock by a private company to the public, CBS said. The purchases included buying 5,000 shares of credit-card company Visa Inc. in 2008 at an initial $44 share price, for a total of $220,000, CBS said. The stock jumped to $64 a share, or $320,000, two days later, CBS said.

The House, at the time, was considering major legislation affecting the credit-card industry.

Pelosi also declined to be interviewed. But at a news conference, she denied she "would act upon an investment" based on information she had as House speaker. She said the CBS story was based on a "false premise."

Schweizer, who a Pelosi spokesman described Sunday as a "discredited conservative author who has made a career of out attacking Democrats," told CBS that corporate executives, members of the U.S. executive branch and all federal judges are subject to strict conflict of interest rules, but not the people who write the laws.

"If you are a member of Congress and you sit on the Defense committee, you are free to trade defense stock as much as you want to," he said. "If you're on the Senate banking committee you can trade bank stock as much as you want, and that regularly goes on in all these committees."

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