An ongoing Washington Post analysis of the intersection between the personal finances of lawmakers and their professional duties has found that 130 members of Congress or their families have traded stocks collectively worth hundreds of millions of dollars in companies lobbying on bills that came before their committees, a practice that is permitted under current ethics rules.
— In Monday’s story, they note that lawmakers, many of whom held leadership positions and committee chairmanships in the House and Senate, changed portions of their portfolios a total of 166 times within two business days of speaking or meeting with administration officials during negotiations over a stimulus package in 2008. The party affiliation of the lawmakers was about evenly divided between Democrats and Republicans, 19 to 15. The story details financial transactions by House Speaker John A. Boehner (R-Ohio), House Minority Leader Nancy Pelosi (D-Calif.), Senate Minority Leader Mitch McConnell (R-Ky.) and Rep. Barney Frank (D-Mass.), among others.
— Boehner moved money around several times after meeting with then-Treasury Secretary Hank Paulson in 2008 as the financial crisis began. After a Jan. 23, 2008 meeting with the secretary, Boehner would later report that two adjustments were made to his financial portfolio: between $50,000 and $100,000 was transferred out of a more aggressive mutual fund. He also reported purchases of between $50,000 and $100,000 in a less risky fund, spread over that day and four others throughout the year. That year, Boehner had 46 other calls and one other meeting with Paulson. Boehner made 42 other transactions during the year, including one that exceeded $50,000. Boehner’s spokesman, Michael Steel, said the congressman’s trades are handled by an investment adviser. He said that the leader and his investment adviser did not discuss the mutual fund moves that were made on Jan. 23.
— Sunday’s story found that lawmakers bought and sold a total of between $85 million and $218 million in stock in 323 companies registered to lobby on legislation that appeared before them, according to an examination of all 45,000 individual congressional stock transactions contained in computerized financial disclosure data from 2007 to 2010.
— It’s important to note that The Post analysis does not provide evidence of insider trading, but instead shows that lawmakers routinely make trades that raise questions about potential conflicts and illustrate the weaker standard that Congress applies to itself.
— Only six members of the Senate have set up blind trusts that have been approved by the ethics committee. The House does not keep a tally of the number of members who set up such trusts.
— One of those with a blind trust, Sen. Herb Kohl (D-Wis.), reports holding more than $50 million in such a trust. Under ethics rules, Kohl cannot know the nature of his investments and must remain unaware of how they are managed.
— Sen. John F. Kerry (D-Mass.), who married Teresa Heinz of the ketchup fortune, had the highest value of overlapped trades — between $42 million and $86 million — in companies registered to lobby before him. Kerry said he does not have any conflicts, because he has no control over the assets in his and his wife’s family trusts.
— Rep. Michael McCaul (R-Texas), married to Linda Mays, whose fortune traces back to Clear Channel Communications, had the highest number of overlapping trades, totaling between $5 million and $23 million, according to analysis of financial disclosure forms listing his family’s holdings.
— Kimberly Kindy reports that congressional stock trading rules date back to 1789, when state-backed revolutionary war bonds became virtually worthless and Treasury Secretary Alexander Hamilton moved in to shore up the investments. But before word spread, members of Congress secretly scooped up thousands of the bonds from unsuspecting farmers and war veterans, paying pennies on the dollar. In response to the scandal, lawmakers prohibited Hamilton and future Treasury secretaries from buying or selling government bonds while in office. But members of Congress did not extend the ban to themselves — a pattern that persists to this day.
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