One of the revelations from Peter Schweizer’s new book on Congressional insider trading is former House Speaker Nancy Pelosi’s (D-CA) cleaning up on malfeasance regards a credit card regulation bill:
Nancy Pelosi apparently bought $1 million to $5 million of Visa stock in one of the most sought-after and profitable initial public offerings (IPO) in American history, thwarted serious credit card reform for two years, and then watched her investment skyrocket 203%. . .
According to Schweizer, corporations that wish to build congressional allies will sometimes hand-pick members of Congress to receive IPOs. Pelosi received her Visa IPO almost two weeks after a potentially damaging piece of legislation for Visa, the Credit Card Fair Fee Act, had been introduced in the House. If passed, the bill would have cut into Visa’s profits substantially. . .
The Credit Card Fair Fee Act was exactly the kind of bill one would think then-Speaker Pelosi would have backed. “She had been outspoken about antitrust problems posed by insurance, oil, and pharmaceutical companies,” Schweizer notes, “and she was vocal about the need for controlling interest rates individual banks charged to use their credit cards.” . . .
Still, with at least ten percent of the Pelosi family’s entire stock portfolio invested in a single stock, Nancy Pelosi clearly had a vested interest in ensuring that Visa’s profits were protected. . . Pelosi saw to it that the bill never made it to the House floor. . .
Pelosi also blocked a second credit-card bill from reaching the house floor. Finally:
Pelosi eventually supported something called the Credit Card Reform Act. Curiously, the all-important interchange fees went untouched by that legislation. . . The bill’s other measures would not affect Visa but rather its client banks.
This is naked corruption, but, alas, it’s perfectly legal. And Pelosi is hardly alone.
Now Democrats are trying to fire back, alleging similiar by Speaker John Boehner. Now, I’m sure there are examples of similar corruption on the Republican side — Republican congressmen aren’t angels either. But for Boehner, all they have is this:
Schweizer and “60 Minutes” claim that during the 2009 debate over healthcare reform, Boehner bought health insurance stocks in the days before Congress conclusively nixed the “public option” — a government-run insurance option that could have siphoned off business from insurance companies.
If they think this is a relevant counter, they don’t even understand the scandal. There are two different reasons why Pelosi’s Visa actions are corrupt:
- Pelosi took actions to favor her own personal interests in opposition to her usual politics. (To wit: ordinarily she certainly would have supported the credit card regulation bill.)
- Pelosi benefited from information not available to the general public. (To wit: she knew that the credit card regulation bill would fail.)
Neither of these are the case with John Boehner. He would have opposed the public option regardless of his personal interests — it was opposed by every single Republican. And neither is there any evidence that he benefited from inside information.
Returning to the general scandal, Congress cannot be expected to police itself. If any evidence were required, the fact that a leading “reform” bill is fake would provide it. So what should be done?
Schweizer’s solution is to throw them all out and start over. Not a bad start, but even if it were accomplished, why would the next class of Congressmen be any less corrupt?
Instead, what we need to do is remove Congress’s power. Then they couldn’t use their power to serve their own interests, and they wouldn’t have insider information on which to trade.
In fact, the Founding Fathers envisioned exactly this scheme. They knew that politicians would be corrupt, and sought to set up a system in which political corruption would do the least harm. Alas, their system has been broken for years. It’s time to fix it.