Just yesterday the Washington Free Beacon reported that Former Speaker of the House Nancy Pelosi and her husband Paul may have used privileged information to cut their losses in the stock market.
Financial disclosure filings that Nancy submitted to the
House Ethics Committee revealed that Paul sold 30,000 shares of Google worth
approximately $3 million between Dec. 20 and Dec. 28.
A
month later on January 24, 2023, the Justice Department and attorneys general
from eight states—including Pelosi's home state of California—sued Google for
monopolizing digital advertising technologies via serial acquisitions and
engaging in other anti-competitive practices.
The
lawsuit may compel Google to break up into smaller units and have other
restrictions instituted.
The
news of the lawsuit caused the price of Google's stock to plummet by 6 percent.
This
trade is the latest in a string of questionable transactions by the Pelosi
couple.
A
Washington Free Beacon analysis revealed that the Pelosi coupl have seen
their fortune grow to $140 million since 2008, due to Paul's stock trades.
Pelosi's
stock market charades have sparked calls for tougher regulations on members of
Congress cashing in on their positions of power.
A
House speaker's disclosure
report from last year revealed that Paul invested $5 million in
20,000 shares of NVIDIA, a firm known for designing and manufacturing
graphics processing chips.
The
Daily Caller revealed that Paul's stock purchase was prior to a vote
on a
bill that would deliver massive grants, subsidies, and tax
credits to chip manufacturing.
Clearly,
Speaker Pelosi was aware of the contents of the bill and the fact that it was
heading for a vote in the Senate.
Paul
and Nancy saved roughly $600,000 in June by selling shares of
microchip maker NVIDIA weeks before the U.S. government placed
restrictions on the company's business in China and Russia.
Back
in 2021, Paul made
over $5 million after trading stocks in Google parent company
Alphabet Inc, Amazon, and Apple, prior to the House Judiciary Committee's
vote to advance five antitrust bills against the tech giants.
Paul
is not the only offender.
Lawmakers
from both parties invested
in sectors whose importance was elevated following the COVID-19
pandemic. They also sold investments from sectors adversely affected by the
pandemic. Their investments were obviously based on prior knowledge of the
emergency bills scheduled to be passed during the pandemic.
Business Insider’s Conflicted
Congress investigation report from December 2021 revealed dozens
of STOCK Act violations, numerous potential conflicts of interest driven by lawmakers' stock holdings, and measly enforcement of anti-insider trading rules.
Forty-nine members
of Congress and 182 senior congressional staffers were found to have violated
laws aimed at preventing insider trading but received no punishment.
What
happens beyond D.C.?
A
Netflix employee was sentenced to 14 months in prison and
$10,000 in fines while the husband of a former Amazon employee
was sentenced to 26 months in
prison for insider trading
In 2004, Martha
Stewart was
sentenced to five months in prison and two years of supervised release
and fines her $30,000 for similar offenses.
The
laws do not apply to those who make the laws.
So
what is being done to combat this?
Last
September, House Democrat Rep. Abigail Spanberger of Virginia and
GOP Rep.
Chip Roy of Texas introduced a
bill that banned members of Congress and other government
officials, including Supreme Court justices from owning or trading stocks.
But
the vote on the bill was delayed, by then-House Majority Leader Steny Hoyer,
known to be a Pelosi ally. The excuse for the postponement was that there was
not enough time to read the 26-page bill
The
same House passed an omnibus spending bill last December that runs
into 4,155 pages in a matter of hours.
Pelosi,
who initially rejected the idea of a stock trading ban, claimed
to have a change of mind. But instead of simply supporting Rep.
Spanberger’s bill, Pelosi engaged in the usual skullduggery and
subterfuge to kill the legislation.
So
why should elected leaders and other government officials be banned from
trading?
Shouldn’t
every individual regardless of the organization they work for be allowed to
invest as they please in a free market economy?
A
free market economy works only when it is founded in fairness.
The
stock markets are fair only when all potential investors have identical access
to the same information and some among them apply acumen to reap profits.
Government
officials both elected and unelected, often have access to information about
actions to be taken by the government or laws to be passed that could affect
certain sectors of business. Engaging in trade after this prior knowledge gives
them an unfair advantage and is tantamount to abuse of office.
Hence
they must refrain from misusing their position in government to reap profits.
They
are always free to resign from their positions and dedicate their lives to
making millions in the stock market.
But
hope for fairness may be on the way.
GOP
Sen. Josh Hawley from Missouri recently introduced the
Preventing Elected Leaders from Owning Securities and Investments Act also
aptly named the PELOSI Act.
The
goal behind the act is to prohibit members of Congress and their spouses from
‘holding, acquiring, or selling stocks or equivalent economic interests during
their tenure in elected office.’
Hawley
said the following:
"For
too long, politicians in Washington have taken advantage of the economic system
they write the rules for, turning profits for themselves at the expense of the
American people,"
"As
members of Congress, both Senators and Representatives are tasked with
providing oversight of the same companies they invest in, yet they continually
buy and sell stocks, outperforming the market time and again."
There
are some major challenges to the bill.
Passing
it through the House and Senate and getting signed by Biden is not going to be
easy. There must be numerous rogue lawmakers in both parties who will be keen
to kill the bill.
It
will take some astute stewardship from Kevin McCarthy and other leading members
of the House to pass the bill.
Will
Senate Majority Leader Chuck Schumer and Minority Leader Mitch McConnell lead
the way to get the bill passed in the Senate and most importantly will Joe
Biden sign the bill to make it a law?
Experience
would suggest that we don’t hold our breath for that to occur.
If
by some miracle the bill is passed, the challenge is to ensure that these laws
and other existing laws are enforced to punish the offenders.
Still,
the fact that another attempt is being made to ensure order, fairness, and
accountability in D.C., must be lauded.
Also appears on American Thinker
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