While most Americans will have to pinch pennies to come up with extra cash this holiday season, our leaders in Congress won't have much to worry about.
Despite failing to deliver on a number of promises and assignments, like developing a debt-reduction plan, members of the House of Representatives and the Senate will still receive their annual salary of $174,000.
Plus, many will make millions more through investment gains.
If you are surprised to discover that 58% of our congressional leaders have the investment savvy to turn a six-figure salary into millions, don't feel bad.
You see, there's more to that story: Our friends in Washington aren't competing on a level playing field .
According to a Nov. 13 CBS News "60 Minutes" report, our elected leaders in Congress may be using information gained from their "insider" positions to make highly profitable trades in the stock market.
If you or I used "inside" information to profit in the U.S stock market, we could expect a visit from the Securities and Exchange Commission (SEC) and the U.S. Justice Department. And those "visits" would only represent the start of our troubles.
The same would be true for a corporate executive, a member of the executive branch , or even a federal judge. In every case, the use of inside information would be considered a punishable criminal act.
But, it's a completely different story for Congress, where those same laws simply don't apply. For those elected leaders in Congress, this form of insider trading may well be unethical. But it's also completely legal.
Congressional leaders, even though privy to non-public information, are not considered corporate insiders, and so can trade on such insights and escape penalty. Congressional staffers and lobbyists also are exempt.
Just look at U.S. Rep. Spencer Bachus, R-AL, chairman of the House Financial Services Committee.
According to a Nov. 13 "60 Minutes" report, Rep. Bachus attended closed-door briefings in September 2008 with then-Treasury Secretary Henry Paulson and U.S. Federal Reserve Chairman Ben S. Bernanke. Congressional leaders in those meetings were warned that a "global financial meltdown" was about to occur.
The very next day, Bachus bought stock options that allowed him to profit if and when the economy tanked. A financial disclosure showed that he turned a profit trading General Electric Co. (NYSE: GE) during the financial crisis.
Or look at Rep. John Boehner, R-OH, one of the members of Congress who bought health insurance stocks during the 2009 healthcare debate. Rep. Boehner fought against a government-funded insurance plan that would compete with publicly traded companies in the private sector. And those private-sector insurers saw their share prices escalate after the provision died in Congress – and after Rep. Boehner had already purchased the related stocks.
Former Rep. Dennis Hastert, R-IL, made $2 million from selling land he owned after receiving a federal earmark to build a parkway near his property. Former Sen. Judd Gregg, R-NH, helped get $70 million in funds to go toward redeveloping a U.S. Air Force base in which he and his brother had a commercial interest. And Rep. Nancy Pelosi, D-CA, bought shares of the 2008 Visa Inc. (NYSE: V) initial public offering (IPO) – while legislation affecting credit card companies was debated in the House.
That's just a taste of the legal insider trading going on by our elected representatives.
We're fed up – and we know you are, too.
"This is yet another prime example of how Congress passes laws that apply to us as citizens, but exempts themselves," Money Morning reader Scott S. wrote to us. "No wonder why many of them spend hundreds of thousands to get elected to a position that pays less than $200,000; the benefits far out weigh the salary… all at the expense of the people they were elected to represent."
We want to do something about this.
But we need your help.
We want to let Congress members know we are tired of them abusing their power, and it needs to end. They were elected to make decisions that help our country – not scour the halls of Washington for investment tips.
This isn't just a pointless exercise: We're going to deliver the final results to our congressional leaders – and let them know that we want this to end … now.
To bring additional pressure to bear, we're also going to publish the results, and distribute them to the major media outlets.
In short, we're going to wage this battle until we win it.
So join us. Cast your vote. Invite a friend.
Help us make a change – a needed change.
And don't worry, no names or personal inf ormation will be shared with Congress or sources outside Money Morning.
News and Related Story Links:
- Money Morning:
While the Middle Class Suffers, Congress is Getting Richer – With Help From Legal Insider Trading
- Money Morning:
Why America Hates Congress
- Money Morning:
It's Not Just Congress – the System Has Failed
- CBS News "60 Minutes":