Shameless
by digby
As financial markets tumbled and the government worked to stave off panic by pumping billions of dollars into banks last fall, several members of Congress who oversee the banking industry were grabbing up or dumping bank stocks. Anticipating bargains or profits or just trying to unload before the bottom fell out, these members of the House Financial Services Committee or brokers on their behalf were buying and selling stocks including Bank of America and Citigroup — some of the very corporations their committee would later rap for greed, a Plain Dealer examination of congressional stock market transactions shows. Financial disclosure records show that some of these Financial Services Committee members, including Ohio Rep. Charlie Wilson, made bank stock trades on the same day the banks were getting a government bailout from a program Congress approved. The transactions may not have been illegal or against congressional rules, but securities attorneys and congressional watchdog groups say they raise flags about the appearance of conflicts of interest. “I don’t think that any of these people should be owning these types of financial instruments,” said Brian Biggins, a Cleveland securities lawyer and former stock brokerage manager. “I’m not saying they shouldn’t be in the stock market. But if they’re on the banking committee and trading in these kinds of stocks, I don’t think that’s right.”
Wilson wasn’t the only one. The article cites several other members of the committee, of both parties, who “coincidentally” traded around the time that they were privy to information that others didn’t have and were being personally lobbied by people who were trying to get something from them. It stinks to high heaven.
Some of these stock sales enabled committee members or their families to cut losses before the market continued its slide. Other trades proved to be particularly ill-timed. Citigroup stock, for example, closed at $22.50 per share the day Brown-Waite bought it. Now it’s hovering around $3.
Many details about the massive financial bailout last fall were widely known outside Capitol Hill. Yet members of the Financial Services Committee were privy to closed-door discussions, staff briefings and political horse-trading decisions between political parties, Congress and the White House. Banks lobbied Congress and the administration heavily. Banks that received bailout money spent $77 million on lobbying and $37 million on federal campaign contributions last year, according to the Center for Responsive Politics. The center found that the banks spending the heaviest got the biggest rescue packages. There has been no direct evidence that this allowed members to engage in insider trading. But when lawmakers overseeing banks also buy and sell bank stocks, it can create “the appearance of a problem,” said Anthony J. Hartman, a Cleveland securities attorney. “I do a lot of different types of litigation, and I just don’t think anybody ought to be putting themselves in a situation where as an elected official, I can be suspect of what they are doing,” Hartman said.
I do not know why members of congress who oversee certain industries should ever be allowed to invest in those industries. It’s ridiculous on its face. And it’s even more ridiculous that they did it knowing full well that it would be disclosed.
I don’t want to hear another word about how much these people hate fund raising and having to beg for money for their campaigns all the time. Apparently, they are very well compensated for their trouble.
h/t to bb