Congress Insider Trading: California Senators and 19 U.S. Representatives from L.A. Respond (or Don't) to 60 Minutes Scandal
As we learned on "60 Minutes" last night, many of the politicians we've elected to U.S. Congress have clearly been using their backdoor V.I.P. passes to gather exclusive intel on when to buy and sell stocks, bonds and commodities.
NorCal's Nancy Pelosi finds nothing shady about her convenient investment in Visa.
For anyone else, insider trading is illegal. But Washington's elite have simultaneously avoided passing any laws to hold themselves accountable. After reviewing the trade history of several suspicious congressmen and -women, CBS News named a handful of names last night -- apparent abusers of this privilege.
None who represent L.A. County, though. So we decided to ask all 19 senators and representatives ourselves. Below are their answers...
... which will be updated as we hear back from their respective flack. We've also included the telephone numbers for their offices, in case anyone else cares to inquire. (That means you, Occupy.)
Q: Did the congressman or congresswoman use insider knowledge from briefings -- or other Washington official sources -- to trade stocks, bonds or commodities?
Of course, no politician in his or her right mind would give an outright "Yes" to this question. But the ones who avoid answering are worth raising an eyebrow at. Also, if we get a "No" that is later discovered to be untrue, such dishonesty will make a good top hat for the greed.
Real quick first, before we get to our L.A. officials, here's one NorCal Congresswoman who gets completely worked in the CBS piece:
Former House Speaker Nancy Pelosi and her husband have participated in at least eight [Initial Public Offerings]. One of those came in 2008, from Visa, just as a troublesome piece of legislation that would have hurt credit card companies, began making its way through the House. Undisturbed by a potential conflict of interest the Pelosis purchased 5,000 shares of Visa at the initial price of $44 dollars. Two days later it was trading at $64. The credit card legislation never made it to the floor of the House.
OK. Moving south (the two U.S. senators count as representing Los Angeles County, naturally, since they represent all of California).
Senator Dianne Feinstein (202) 224-3841
Paul Arden in the press office says he'll locate the right person to "follow up on that." The right person might be Brian Weiss, Feinstein's communications director, "but it's not quite clear." Arden adds that he "can't speak to when" an answer will be available. Update: Weiss calls back. He says Feinstein's answer is "No" -- and that all her investments are located "in a blind trust." In other words, "those decisions are made not by her, but by someone else." (Politicians often put their assets in blind trusts to avoid this very breed of accusation.)
Senator Barbara Boxer (202) 224-3553
Andy Stone in the press office says that "the senator is traveling today" -- heading back to the East Coast from California. He believes Boxer will say "No," but says he'll try and get her answer "as soon as possible." For the record, though, California Watch exposed a couple dirty-seeming deals in Boxer's closet in October 2010:
At least twice during her political career, U.S. Sen. Barbara Boxer turned quick profits on IPOs that were unavailable to the general public, records and published reports show [PDF]. The transactions, which were made public in 1994 and 2000, allowed her exclusive access to several lucrative investments.
Update: Boxer was never officially accused of insider trading. (And it wouldn't have been illegal, anyway.) In the California Watch piece, then-spokesman Matt Kagan says that "the senator received no special treatment and had no knowledge of the trades, which were handled by a financial adviser." And that adviser, Gail Seneca, later tells the Wall Street Journal that Boxer was treated the same as any client.
Stone says Boxer's investments are currently in a "blind trust," just like Feinstein's. They've reportedly been that way since 2001.
Representative Karen Bass (202) 225-7084
Ashley Gammon, communications director, initially says, "I'm assuming the answer is no." She soon calls back and confirms: "The answer is no." Again for the record, LA Weekly did run a piece on Bass in June 2010, exposing some of her tendencies to reap the perks of the job during trying times.
Bass had collected per diem for 29 days, getting more than $4,000, yet for much of that time she was skipping out of legislative duties in Sacramento.
Just months before her per diem practices came to light, she had touted her "Joint Select Committee on Reform" to increase legislative transparency and revamp the old ways of doing business in politics.
... More recently, Bass' staff made the news for taking from oil giant BP lots of free tickets to major sporting and other events in Sacramento. Though it was legal, it left an uneasy feeling that Bass had morphed into just another pol, and more quickly than most.
Representative David Dreier (202) 225-2305
We left a voicemail and sent an email request to communications director Jo Maney.
Representative Xavier Becerra (202) 225-6235
Communications director James Gleeson points out that his boss was not profiled in the CBS special. (We're well aware.) However, he says he'll put in a request for comment.
Representative Kevin McCarthy (202) 225-2915
Erica Elliot, press secretary for McCarthy, is "not in the office right now." We've asked her for a prompt response over email.
Representative Howard L. Berman (202) 225-4695
Communications director Gabby Adler says, "We'll be in touch." Berman is flying back from California right now, and she won't be able to ask him about his trading history "at least until he lands." Update: Adler sends over his statement, below.
"No, Congressman Berman uses an advisor at a brokerage firm to guide his investments. This is the same person that advised the Congressman's parents' investments when they owned the brokerage account before they passed. The Congressman has not and does not initiate any changes to this account."
Representative Howard P. McKeon (202) 225-1956
We've contacted spokeswoman Alissa McCurley for comment.
Representative Judy Chu (202) 225-5464
Adrian in the press office says that communications director Alison Rose is not available. After asking what we're calling about and checking once more, he maintains that Rose is "currently busy right now." We've reached out to her via email.
Representative Gary G. Miller (202) 225-3201
We are informed that communications director Megan McCormack is "not available right now." We've contacted her for comment.
Representative Grace F. Napolitano (202) 225-5256
Press secretary Nathan Landers had just "stepped out of the office" when we called, but now has a voicemail waiting.
Representative Adam Schiff (202) 225-4176
"He has definitely not done that," says Maureen Shanahan, communications director. But she's reaching out to Schiff to "check for sure."
Representative Laura Richardson (202) 225-7924
Ray Zaccaro, press secretary, tells us to "write out that request" and send it to his inbox. We're waiting to hear back.
Representative Brad Sherman (202) 225-5911
"I'm inclined to say no," press secretary Ben Fischel tells us off the bat. He later follows up with this official statement: "The answer to your initial question is 'No,' he has not done any insider trading." On top of that: "Congressman Sherman is looking into authoring a bill that would restrict members from owning and trading stock in individual companies, but for now this is only in the analysis stage."
Representative Dana Rohrabacher (202) 225-2415
Tara Setmayer, communications director, says via email: "The answer is 'No.'"
Representative Maxine Waters (202) 225-2201
Chief of Staff Mikael Moore, who also "handles all the press issues," says "the congresswoman is in flight right now to D.C. and she won't land until 6:30 p.m." But he says he'll present her with the question "as soon as she lands."
Representative Lucille Roybal-Allard (202) 225-1766
"Submit me the question and I'll get back to you," says Douglas Farrar, press secretary. "My boss is in a plane right now." Update: Farrar emails us with Roybal-Allard's answer: "Absolutely not."
Representative Henry Waxman (202) 225-3976
Communications director Karen Lightfoot is "out," says a woman named Elizabeth in the press office. She says she'll let her know we called. Update: "The answer is categorically no," says Lightfoot.
Representative Linda Sánchez (202) 225-6676
Press secretary Adam Hudson, press secretary, says he'll "have to get back to" us after speaking with Sánchez. He does add, however, that the congresswoman is a "ranking member of the ethics committee" and thus "takes that stuff very seriously." He says that "obviously she wouldn't have done any [trades] based on insider knowledge" -- and that he would "need to look and see if she has any stocks to speak of at all."
Hudson does have some additional insight on the CBS allegations: He was formerly communications director for Brian Baird, who has long tried to ban closed-door briefings between Washington pals. He says it's very hard to prove that a deal was made solely based on exclusive advice not available to the public. "The question always is, 'What does that mean?'" he says of insider trading.
Because Congress has insulated itself from punishment for so long, the question goes more or less unanswered. Let's hope today's extra dose of media pressure can pull them back to the taxpayer's mercy.