Wednesday, November 16, 2011 : Representative Bachus named in Sixty Minutes television expose on politics for personal gain
The Washington DC political newspaper Politico, along with a plethora of other US media outlets and blogs, is currently running a story on political enrichment in Congress following last Sunday night's CBS "Sixty Minutes" television program on the topic, which has ignited wide mainstream coverage in the United States.
Among several politicians named in the Sixty Minutes program was internet gambling's arch-enemy, Alabama Representative Spencer Bachus, about whom the publication observes:
"The knives are out for House Financial Services Committee Chairman Spencer Bachus (R-Ala.), as bloggers on the left and right call for accountability over allegations he profited from insider knowledge of the 2008 financial meltdown.
"The allegations, which aired as part of a CBS 60 Minutes investigative report Sunday evening, are that Bachus traded stock options after being briefed by Treasury Department and Federal Reserve officials about the impending economic collapse. Bachus denies that he traded on any non-public information."
The Sixty Minutes program was presented by Steve Kroft and focused on the political opportunities for personal enrichment available to Congressional representatives through "non-public information" – information not available publicly but which can be used to gain an edge in stock trading.
Whilst "insider trading" is a criminal offence for the man in the street, politicians have framed laws that allow them to practice this form of enrichment, with many leaving Congress with considerably more money than when they entered the institution.
Both Democrats and Republicans – including current House Speaker John Boehner (R-Ohio) and House Minority Leader Nancy Pelosi (D-Calif.) – are named in the program, which was inspired by a book on the subject authored by Peter Schweizer, a fellow at the Hoover Institution, a conservative think tank at Stanford University.
Schweizer's treatise on soft corruption in Washington was assembled with the aid of a team of eight student researchers, who reviewed financial disclosure and other records.
"It became a jumping off point for our own story, and we have independently verified the material we've used, says CBS at:
Kroft reported that a number of members of Congress and their aides have regular access to powerful political intelligence, and many have made well-timed stock market trades in the very industries they regulate. For now, the practice is perfectly legal, but some say it's time for the law to change.
Kroft interviewed Schweizer, who gave examples of the manner in which this political situation can be abused for personal gain. One of these was the case of Spencer Bachus.
Kroft said: “While Congressman Bachus was publicly trying to keep the economy from cratering, [Bachus] was privately betting that it would, buying option funds that would go up in value if the market went down. He would make a variety of trades and profited at a time when most Americans were losing their shirts.”
Bachus' office said that he never trades on non-public information, or financial services stock. "However, his financial disclosure forms seem to indicate otherwise," Sixty Minutes reports. "Bachus made money trading General Electric stock during the crisis, and a third of GE's business is in financial services."
One now-retired politician interviewed by Kroft, six-term veteran Brian Baird, was critical of the Congressional system that allowed for such personal enrichment, and stressed that lawmakers should have only the welfare of the United States on their minds in their political careers.
Baird tried on a number of occasions to push a measure through Congress combating the use of non-public information. But his bill HR1148 went nowhere due to a marked lack of interest by other politicians, and is still buried deep in the system.
One immediate benefit from Sunday's program was a commitment from Representative Jaime Herrera Beutler to support the “Stop Trading on Congressional Knowledge” Act (STOCK), which is similar to legalization championed by Baird. It was reintroduced by Minnesota Democratic Rep. Tim Walz earlier this year.
"Brian Baird deserves a lot of credit for highlighting this needed reform — both as a member of Congress, and recently as a regular citizen,” said Herrera Beutler.