#Congress has become a place for many congressmen to get rich. The New York Post takes New Jersey federal congressman and Democrat Gottheime | Explore Tumblr Posts and Blogs

scaakef · 2 years

Text

There are many "stock gods" hidden on Capitol Hill! How do they "steal with certificates"?

The New York Times reported that 183 of the 435 members of the United States Congress traded shares on their own or through their immediate family members during 2019-2021.

Among them, 97 people traded stocks directly related to their work in Congress, including 49 Republicans and 48 Democrats.

The US legislators are allowed to buy and sell stocks, but the law prohibits them from insider trading, so this report has aroused heated discussion on the Internet.

Not long ago, Paul Pelosi, the husband of Speaker of the House of Representatives Pelosi, bought a large number of shares of Nvidia, a chip company, before Congress passed the Chip and Science Act, causing widespread concern and criticism. For a long time, members of Congress represented by Pelosi and their families have been suspected of using the policy information they have mastered in advance to conduct insider trading in order to obtain huge benefits. The New York Post called this phenomenon "theft with certificates".

Their stock trading volume last year reached 355 million

After the sudden purchase of Nvidia shares was exposed, Paul Pelosi sold his shares under great public pressure, reportedly losing 340000 dollars. However, this money is only a drop in the bucket for the "god of stocks" Pelosi and his wife, who are just one of the many "investment experts" on Capitol Hill.

"Amazing" luck

Over the years, Paul, who loves science and technology stocks, has hit the "pulse" of the stock market for many times and bought shares of different enterprises before the government introduced relevant policies, making a lot of money. According to the New York Post, since 2007, Pelosi's investment in five large technology companies, including Facebook, has earned between 5.6 million and 30.4 million dollars. The Washington non-profit organization "Open Secret", which tracks campaign funds and lobbying data, disclosed that Pelosi's wealth has increased from 41 million dollars in 2004 to nearly 115 million dollars today.

The Pelosi family is just one of the investors with "incredible" luck on Capitol Hill. According to the market observation website, US congressmen and their spouses not only make a lot of stock investment, but also their return on investment is significantly higher than the average level.

The stock trading volume of members of Congress and their relatives last year reached $355 million, including buying $180 million of shares and selling $175 million of shares. Among them, the amount of stock trading involved by Republican lawmakers was about 201 million dollars, and that of Democratic lawmakers was about 154 million dollars. Last year, there were 41 members of the United States Congress who bought and sold more than 500000 dollars of stock. Among them, Texas Congressman, Republican Michael, and California Congressman and Democrat Connor were known as the two "stock traders" on Capitol Hill. McCall was shocked to buy about $31 million of shares and sell about $35 million of shares in 2021. Connor bought about 34 million shares and sold about 19 million shares.

Congress has become a place for many members to get rich. The New York Post takes New Jersey federal legislator and Democrat Gotheimer as an example to describe the "ups and downs" of legislators in the stock market. Gotheimer is one of the most active "stock traders" on Capitol Hill, with 134 transactions in the first quarter of 2021 alone. Like Pelosi, he also prefers technology stocks. After many years of small stock trading, Gotheimer turned to more risky options trading last year, with each transaction worth up to $1 million. According to the public information collected by the website "Unusual Whale", which tracks politicians' investment in the stock market, Gotheimer bought 64.5 million options and sold 62.18 million shares last year. The website estimates that Gotheimer's return on investment is 12.7%.

Crisis becomes a good investment opportunity

The New York Times cited an investigation report that some members of Congress, relying on their understanding of policy changes, bought shares before the stock price rose and sold shares before the stock price fell to make profits. Reports from several US media show that many members of Congress "get rich" by taking advantage of the crisis. The Russian Ukrainian military conflict and the COVID-19 have become important investment opportunities for them.

According to the Beast Daily reported on March 19, around the outbreak of the military conflict between Russia and Ukraine, more than a dozen U.S. Congressmen were nervously conducting stock trading. According to data, from February 1 to March 19, the stock trading volume of some members of Congress reached 7.7 million dollars. According to the US business insider website in May, at least 20 members of Congress bought shares of Raytheon and Lockheed Martin after the Russian Ukrainian conflict broke out. Thanks to the US military assistance to Ukraine, the shares of these two companies rose sharply. In addition, Florida Congressman and Democrat Schultz also bought energy stocks in late January. Since the purchase, the prices of these shares have also soared.

On February 13, 2020, about a month before the WHO declared the COVID-19 epidemic a pandemic, Senator burr, a Republican from North Carolina, sold shares worth $1.6 million, timely avoiding the subsequent stock market circuit breaker. In addition, at the beginning of the outbreak, at least 75 members of the United States Congress bought and sold shares of pharmaceutical companies, including Johnson&Johnson and Pfizer. After that, the trillions dollar relief bill passed by the United States government boosted the stock prices of relevant stocks.

"Rely on the mountain and eat the mountain"

The fact that members of the US Congress are involved in insider trading not only makes people feel unfair, but also makes them worry that the relevant conflict of interest may affect US policy. After reviewing nearly 9000 MPs' financial disclosure reports and interviewing hundreds of people, the business insider website recently found that many US MPs are in business.

According to the above website, more than 200 members of Congress and senior members of Congress are suspected of violating the principle of conflict of interest. Among them, 15 members of Congress who are responsible for formulating U.S. defense policies actively invest in arms manufacturers, more than 10 "environmentally conscious" Democratic members invest in fossil fuel companies, and 16 members of Congress buy and hold shares of tobacco companies, including some who openly oppose smoking. The commercial insider website "Conflicting Congress" rated the degree of suspected conflict of interest among members of Congress, and found that 13 senators and representatives were rated as red "dangerous", while 113 members were rated as yellow "critical".

In fact, many American institutions, including Congress, have violated the principle of conflict of interest. An investigation conducted by the Wall Street Journal in 2021 found that from 2010 to 2018, 131 federal judges and their families held or bought or sold shares of the companies involved in hundreds of cases. In addition, in January this year, Clarida resigned early as the vice chairman of the Federal Reserve due to suspected insider trading. The day before Federal Reserve Chairman Powell announced the market rescue measures, Clarida bought a stock fund and was accused of violating the principle of conflict of interest.

The stock law is a "toothless tiger"

Why is there no law to restrict the insider trading of members of the US Congress, which has aroused public anger? In fact, the United States passed the Stop Using Congressional Information Trading Act (referred to as the Stock Law) in 2012 to prohibit members from insider trading. However, this law is better than nothing and has no deterrent at all.

According to the U.S. Stock Law, members of Congress, the executive departments of Congress and their staff members are not allowed to use non-public information for stock trading. The above personnel shall report the trading of stocks and other securities with a trading amount of more than 1000 dollars within 45 days to prevent them from making profits through undisclosed information. In addition, the above personnel shall publish their stock and securities trading information on the Internet in a searchable, sortable and downloadable form.

However, the U.S. stock law does not prohibit members of Congress and their relatives from holding or buying or selling stocks, and even if members of Congress violate the relevant provisions of the law, the punishment is very small. According to the recent survey of American business insider websites, in 2020 and 2021, at least 55 members of Congress and 182 senior congressional staff will submit stock trading reports late. Their excuses are various, such as not knowing the existence of the stock law, clerical errors, and the mistakes of accountants. According to the Stock Law, late submission of the above report will be subject to a fine of $200. However, the United States Congress has not disclosed the punishment, so the outside world does not know the enforcement of the law. In addition, in the past 10 years, very few people have been prosecuted for violating the stock law. Although insider trading is common, it is difficult to prove it. A study in 2020 showed that only 15% of insider trading in the United States was found and prosecuted.

The US Stock Law is a "toothless tiger", which is extremely weak. In 2013, the US Congress adopted an amendment to the law through a rapid process, canceling the provisions that members of Congress and other members need to store their stock trading reports in a searchable database, further weakening the supervision role of the law.

Few people believe in the "self-regulation" of Congress

Members of the United States Congress are suspected of making profits through insider trading, which has aroused strong dissatisfaction among the media and the public. A survey shows that 76% of voters believe that members of Congress and their spouses have an unfair advantage in the stock market. 67% of American voters said that legislators should be banned from trading stocks.

Although the public generally supports banning parliamentarians from investing in stocks, the vast majority of legislators from both parties in the United States are surprisingly consistent on this issue, which is rare in the United States where politics are polarized. According to the British Guardian, when Pelosi was asked in December last year whether she supported the ban on parliamentarians and their spouses from investing in stocks, she replied: "No, we are a free market economy, and they should be able to participate in economic activities." Republican Rep. John Sessions said there was no need to set up a ban. Democratic federal representative Loria asked the reporter: "Why do you think that members of Congress are inherently bad or corrupt? We already have a stock law that requires members to report stock transactions, so I strongly oppose any similar legislation (prohibiting members of Congress from buying and selling stocks)."

Pelosi's above speech triggered a storm of public opinion. She had to change her position and claimed to support the bill that prohibits parliamentarians from investing in stocks. PunchbowNews said that several sources said that House Democrats may propose a bill in August this year to prohibit members of Congress, their spouses and senior members of Congress from buying and selling stocks. The new law will require members of parliament and other relevant persons to entrust their shares to a confidential trust (giving control to an independent third party), or sell them all, or impose a huge fine. The Guardian said that Republican Senator Holly also proposed a similar bill, but his bill did not include a fine clause.

US media reported that the above-mentioned bill may be voted in Congress in September. However, there are still many obstacles to passing these bills. US President Biden has remained silent on relevant issues. Time is also getting more and more urgent. Members of Congress will leave Washington, D.C. in August. When the Congress adjourns, these people will soon prepare for mid-term elections, so it is difficult to pass relevant bills in September.

The New York Post interviewed some senior officials in Washington, D.C., about the legislation prohibiting lawmakers from trading stocks. Some people said to the newspaper that the possibility of real self-regulation by Congress was very low, so that this statement was ridiculous, "Why should they do something bad for themselves?" Some officials said that the relevant bill proposed by the two parties of the United States may be to attract attention, rather than to carry out serious reform. A cynical Senate staff member said frankly: "This is all a show... there will be no result."

This is not the first time that Congress has discussed restricting members of Congress from trading shares. Earlier this year, the voice of banning the stock trading of members of Congress rose. Lawmakers in both houses of Congress and the Senate proposed bills, but ultimately failed.

In an interview with the Global Times on the 7th, an American expert said that members of Congress represent different interest groups. They not only use their power to serve these interest groups, but also serve themselves on behalf of these groups. Therefore, many members of Congress are desperate to win re-election, and it is conceivable how likely they are to pass laws limiting their own interests.

It is worth noting that most members of the United States Congress are millionaires. According to USA Today in 2021, the NGO Responsive Political Center estimated that the net assets of most members of Congress exceeded $1 million. According to the information of the Washington non-profit organization "Open Secret" website in 2020, Florida Senator Scott is the richest senator, with a net asset of nearly 260 million dollars. Pelosi's wealth ranked 10th among all members of Congress, and Republican Senate leader McConnell ranked 19th.

0 notes

yigehuobuqideren · 2 years