Why Nancy Pelosi is wrong about lawmakers trading in stocks
A few days back, House Speaker Nancy Pelosi said that lawmakers should not be prevented from trading stocks.
“We are a free market economy. They should be able to participate in that,” Pelosi said.
Her remarks are probably owing to the fact that Pelosi’s husband holds stocks and options worth tens of millions of dollars.
This includes stocks in big tech firms such as Amazon and Apple that are each worth between $5 million and $25 million. In Comcast, Pelosi’s husband holds stock worth between $1 million and $5 million and in Visa worth between $5 million and $25 million. He also holds stock options in Google’s parent company worth between $1 million and $5 million.
Pelosi insisted that she had no involvement or prior knowledge of her husband’s stock investments. She also stated that she had no stock on her name.
However, the fact that Pelosi’s husband made millions from various big tech firms that she is supposed to regulate, at the very least is a huge conflict of interest.
But Pelosi is not the only one.
Back in April, a study by the Campaign Legal Center discovered that both Republican and Democratic lawmakers bought and sold stocks hundreds of times throughout the coronavirus pandemic.
Many lawmakers had invested in industries whose importance and relevance were elevated owing to the COVID-19 pandemic. They also sold their stocks from the hospitality industry, restaurants, and other sectors that were adversely affected by the pandemic.
Another investigation in September revealed that “49 members of Congress and 182 senior congressional staffers have violated laws aimed at preventing insider trading.”
They obviously had prior information about the pandemic-related restrictions which enabled them to reap an instant profit.
Back in 2012, the Stop Trading on Congressional Knowledge Act, also known as the STOCK Act was passed which bars lawmakers from using inside information to make investment decisions and requires that all stock trades be reported to Congress within 45 days.
To date, no one in Washington has been charged in connection with stock trading investigations undertaken by the Justice Department and the Securities Exchange Commission.
A law that is not enforced can almost be regarded as non-existent.
What about people beyond Washington?
A former Netflix engineer and his ‘co-conspirator’ were sentenced to 14 months in prison and $10,000 in fines for insider trading.
A former McKinsey & Co. partner recently pleaded guilty to using inside information to profit on the acquisition of a fintech company by client Goldman Sachs Group. The one count of securities fraud carries a maximum sentence of 20 years in prison.
There are myriad cases of citizens being deservedly punished for insider trading.
Nancy Pelosi’s statements places her at odds with her fellow Democrats such as Senator Elizabeth Warren and Representative Alexandria Ocasio-Cortez aka AOC.
AOC had tweeted “It is absolutely ludicrous that members of Congress can hold and trade individual stock while in office. The access and influence we have should be exercised for the public interest, not our profit. It shouldn’t be legal for us to trade individual stock with the info we have.”
Senator Warren said, "We need both tougher laws and enforcement of those laws. The American people should never have to guess whether or not an elected official is advancing an issue or voting on a bill based on what's good for the country or what's good for their own personal financial interests."
Perhaps like broken clocks are correct twice a day, both Warren and AOC are absolutely right in this particular instance.
If AOC and Warren continue to maintain this position and act on their words, they will probably discover that sharp decline in their re-election funds or perhaps a primary challenger from their party or perhaps a few media hit jobs may come their way.
Back in September, Nancy Pelosi had said the following during her trip to the U.K.:
"In America, capitalism is our system, it is our economic system, but it has not served our economy as well as it should.
You cannot have a system where the success of some springs from the exploitation of the workers and springs from the exploitation of the environment and the rest, and we have to correct that."
The free-market principles should allow any individual, including lawmakers to invest where they desire. But primary qualifier for a free market is a relative amount of fairness.
A regular investor simply doesn’t have the level of access to insider information that lawmakers have, this means only a few in Washington can profit from inside information.
This is the exploitation of the system that Pelosi was talking about when she offered her critique of capitalism.
The function of a public servant is obviously to serve the citizen, with this responsibility, comes certain sacrifices. The first among these sacrifices is to not use their office for profit.
But these fundamental principles no longer apply to the Democrat Washington Establishment, of which Pelosi is a prominent leader.
The members of this establishment may say the right thing to appear noble and virtuous. But when you scrutinize their actions, it is clear that their claims are hollow.
There are quick to act against the likes of President Trump who challenges their monopoly. They impeached him twice without reason. They conducted baseless and partisan investigations into the Russia collusion hoax and January 6th ‘insurrection’.
But no laws apply to the member of the club.
They claim to want to resolve income inequality but have no problem trading in stock based on information only available to them.
The fact that these acts have gone unpunished proves that they co-opted various agencies and the news media who are ideally supposed to function as watchdogs.
To be fair they should be allowed to invest wherever they please, but there has to be a strict regulatory mechanism to avoid conflict of interest.
Is there a way to bring down this self-serving cabal?
Firstly, the citizen must actively participate and vote in brave, honest, and fearless individuals who will not be tempted by various inducements.
Secondly, all elected officials must have term limits, perhaps not more than 2 terms.
Thirdly, for various administrative services and agencies, there must be mandatory transfers after a fixed period of time.
Fourthly, stronger laws must be passed that prevent abuse of power and profiting by virtue of office and these laws must be enforced.
The question remains, will the self-serving, self-promoting, and self-sustaining Democrat Washington Establishment permit changes that will harm them?
Of course not!
The change has to begin at the grassroots with the citizen being engaged in the political process and voting for the right candidate after carefully scrutinizing their records.
Having honest and upright elected officials for a few decades may bring about the first step in the journey of change.
We live in hope for a better tomorrow.
Ethics Watchdog Calls for Probe into House Democrat Kim Schrier’s Stock Transactions
The Foundation for Accountability and Civic Trust (FACT), a non-partisan ethics watchdog organization, demanded an investigation into House Energy and Commerce Committee member Rep. Kim Schrier’s (D-WA) stock transactions after she allegedly failed to adequately disclose up to one million dollars in Apple stock sales, allegedly violating federal law.
The watchdog filed a complaint with the Office of Congressional Ethics (OCE) asking for a probe into Schrier for failing to adequately disclose up to a million dollars in Apple stocks that were bought in a jointly held family trust, emphasizing that she sits on the committee which jurisdiction includes “electronic communications and the Internet,” “privacy, cybersecurity, and data security,” and “consumer protection and product safety” — all of which has the potential to influence bills that could impact Apple’s stock price.
She is required to submit a periodic transaction report with the clerk in the House of Representatives within 30 to 45 days of stock transitions over $1,000, made on behalf of themselves or their spouses under the Stop Trading on Congressional Knowledge (STOCK) Act of 2012, which would have required her to submit after the purchase of up to a million dollars in Apple stock from the jointly held family trust.
Forbes reported that stock was purchased on July 27 through her jointly held family trust, but a periodic transaction report was not filed with the clerk until November 12, months after the deadline. A spokesperson for the congresswoman insisted that she was unaware of the transaction until after the purchase was made since the transitions are made by her husband, noting: “As soon as she became aware, she filed the required report.” However, the watchdog argued, “There is no excuse for violating this law, and if Members were allowed to claim they didn’t know about transactions then the law would be completely ineffectual and unenforceable.”
Another report from Sludge revealed that the congresswoman and her spouse purchased an additional $250,001 to $500,000 worth of Apple stock on October 28 but did report the purchases within the given window on November 18. Sludge also uncovered that Schrier’s previous annual financial reports showed “In 2020, Schrier and her spouse sold all shares of a previous stake they held in Apple and collected between $1 million and $5 million in capital gains and dividends income.”
The Sludge report further revealed what bills the Energy and Commerce Committee is responsible for, and letters the committee’s chairman has issued in the past:
The committee’s chairman Rep. Frank Pallone (D-N.J.) has sent Apple CEO Tim Cook two letters this year related to privacy issues, a strong indication that these issues could come before the committee in the form of a hearing or legislation. One letter sought information about when the company learned about security issues with group FaceTime calls, while the other urged the company to review its privacy labels for apps, in light of reports suggesting they are misleading.
The Open Apps Markets Act, which would require companies like Apple that control operating systems to allow third-party apps and app stores, has been referred to the Energy and Commerce Committee. The bill would also bar Apple from using non-public information it collects from its app store for developing competing apps, and it would prevent the company from prohibiting app developers from telling consumers that their products can be purchased more cheaply outside the app store.
FACT’s Executive Director, Kendra Arnold, said in a press release that members must provide transparency, “especially when the Member has oversight of the companies they are buying and selling,” noting that members should be held accountable when they do not follow the rules set in place:
“These laws are essentially meant to provide real-time reporting and the 30 or 45 day deadline is the maximum time for disclosure, which must be met especially when the Member has oversight of the companies they are buying and selling. The disclosure laws are among the simplest rules to follow, and there is no excuse for inaccurate, incomplete, or late filings. It is essential that our lawmakers are held accountable for their actions, and I encourage the OCE to immediately investigate and apply the proper consequences for violating this law,”
“The failure of Members to follow the most basic ethics rules they created leads to public distrust in our elected officials as a whole,” FACT’s complaint said. “Moreover, the lack of any consequence for Members who break the law leads to the public perception that the laws do not apply equally to all.”
“We request the OCE investigate Rep. Schrier’s stock trades and apparent failure to file the required timely and accurate disclosures, and impose any appropriate sanctions including fines and penalties,” the complained added.
In 2012, Congress quickly passed the STOCK Act and signed it into law after it received substantial bipartisan support in both chambers. The legislation was introduced and promptly signed into law thanks to Breitbart News senior contributor Peter Schweizer, who in 2011 released Throw Them All Out, exposing corruption in the highest echelons of elected life.
Schweizer’s book, which exposed House Speaker Nancy Pelosi (D-CA) and many others, revealed corruption concerns among Republicans and Democrats on Capitol Hill, forcing Congress into adopting the STOCK Act that implemented stricter reporting and ethics requirements.
With only a year into the current 117th Congress, there have already been over 15 Democrats serving who have been accused of violating the STOCK Act, many of whom have had ethics complaints sent to the OCE asking for an investigation.
A full copy of the FACT’s complaint against Schrier can be found here.
Jacob Bliss is a reporter for Breitbart News. You can follow him on Twitter.
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