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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.
We want to stop insider trading in Congress, and you can join us. Just click here to cast your vote against insider trading.
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":
"Insiders"
What would help is:
Better directions on how to bring our contacts into this vote.
A way to keep this from being an advertising blitz by you which would turn many off.
Keeping it a "pure" vote gathering effort.
Combining email with other methods of contact.
Use the power of communication to its fullest.
Keep the message clear and focused to keep it moving toward the goal.
Get serious and broaden your efforts more.
Put the effort in its own format and leave all advertisers out of it.
Did I mention leave advertising out of it?
I am sure most of us have already forwarded the 60 minute clip to all our contacts.
Double standards – any person using insider information gets a penalty or goes to jail but not these "representatives of the people" who sit comfortably in the congress for decades and profiteering from lobbying big businesses. There should be some decent people in the congress who can raise their voices and stop lobbying, multiple terms of "reelections" by cutting to two terms, enforce the law for everyone including members of the congress, etc. I guess we need third party (Independents, Patriots, – whatever you call it) who can challenge both Republicans and Democrats.
It's time to throw out all of the members of congress that continue to let the insider trading take place.
Remember the names of those that are involved and reported and vote them out. Then lets replace them with members that will do their job and stop this unethical behavior and enact laws that will cause this type of behavior to be dealt with as illegal and have those individuals prosecuted.
It's time to clean up the corruption that is allowed to take place by our elected officials.
I volunteer my services FREE to do background Research on Corporations/Legislators' interests etc. I am a retired Corporate executive(with an MBA) with over 35 plus years of experience in the U.S.Corporate world.
Like most struggling Middle-class U.S. retirees I feel our political system needs reform–but in an orderly way thro the same legislative process that the current electees are using to enrich themselves.
Please consider my offer. I must acknowledge that I have been enlightened since my retirment by publications like yours that tell-them=as they are.
M.K.Ramasubramanian.
I am ready to put the squeeze on Congress, tired of paying them for what? They break all the time, they spend my hard earned money all the time and for what? Fire them all and start over. Make people accountable and make them pay taxes equally and everyone earn a living if they intend to live here in America! How hard is it?
I watched the 60 Minute story on this crap and it's laughable.
All I can say is thank god I live in Canada where our elected political leaders
Do NOT have this type of "fredom" around stock markets.
Are economy is healthy along with our banking system
(All 5, that's right RBC, TD, CIBC, BMO and Scotia, not the hundreds
That are or should I say were operating in the US.
PS. I really hope God can save America because it's not looking
Promising….
Thermal Regards
Brian Jastrow
President
IRIS INC.
If it is illegal for everyone else it should be illegal for members of the House and Senate.
I'm with you all the way!
Members of congress should be required to live by the same laws, have the same health care and social security as the rest of us citizens. The Protest Wall Street folks are at the wrong place and should be protesting Congress, more and more the root of all that is wrong with America today. The country founders would roll over in their graves knowing how Congress has sold its soul and our lives to the lobbyiests. The Supreme Court has also lost its legitimacy by ruling that corporations are considered individuals. Throw all the bums out!!!!!!!!!!!!!!!!!
Your tapes are too long. I can't be tied up so long on your salse pitech. How about just the facts. I mostly turn off the tapes after a little bit, and ahve watched only acouple of them all theway. Just too long.
What? There were no sticking low life socialist democratrs that did this? You could only find some dirtbags Republicans? I mean give me some balance. How about little (actually fat) Dickie Durbin right here in Illinois?
C. Eckrich
Not only does this unethical behavior lead to a corrupt government but it also leads to horrible policies and unnecessary environmental destruction and the exacerbation of our unsustainable economy. For example Dennis Hastert used a trust to hide his purchase and sale of land in Illinois that profited him because he affected the proposed Prairie Parkway (covered in the 60 Minutes story).
Not only was this unethical in that he abused his power as a legislator to benefit himself but he also increased the inefficiency of our society and would have unnecessarily destroyed open space thus increasing the cost to society resulting from sprawl and exacerbating our unsustainable economy, such as ensuring that energy costs would continue to increase simply because sprawl by default increases energy use.
This behavior is just another example of the corrupting power of power. It needs to be stopped and those that participate punished, if by nothing else being removed from power, preferably without us having to sustain them with "retirement" benefits.
The insider trading that goes on in congress is a crime and should be punished and stopped. For members to vote on issues that effect the stock market and then profit from investments made on the infor therein is ludecris. They should not be allowed to do this. The general public would be incarcerated for acting on this kind of information so should members of congress if they continue such illegal behavior.
Political party should be exempt from stocks all together that would fix that!