1House minority leader Nancy Pelosi is bracing for a report on the stock
investments of members of Congress that is to air Sunday on CBS' "60 Minutes
The San Francisco Democrat and House Speaker John Boehner, R-Ohio, were
questioned separately at their weekly news conferences Nov. 3 by reporter
Steve Croft. Neither had granted Croft's previous requests for interviews.
Croft asked both leaders about stock transactions they made while Congress
was considering legislation that could affect the financial and insurance
industries. Pelosi and Boehner vigorously denied any connection.
Laws against insider trading - making stock bets based on information the
public doesn't have - do not apply to Congress. Studies have shown that
stock portfolios on Capitol Hill outperform the market. Legislation that
would ban insider trading by members and staff has languished.
Croft asked Pelosi why she and her investor husband, Paul Pelosi, bought an
initial public offering of stock in Visa, the San Francisco-based credit
card company, in March of 2008.
The same month, former House Judiciary Committee chairman John Conyers, D-
Mich., introduced the Credit Card Fair Fee Act, which would have given
merchants the power to negotiate lower fees with credit card companies. The
bill, hostile to the credit card industry, was passed by the committee but
never brought to the floor. Pelosi was speaker at the time, and controlled
which legislation came to a vote.
The Pelosis bought the Visa stock in three transactions totaling $1 million
to $5 million, according to financial disclosure reports. The first was the
IPO, followed by two other purschases of the stock at higher prices, Pelosi
Pelosi said the Conyers bill had no chance of being signed by then-President
George W. Bush. She said she brought even tougher legislation, the Credit
Cardholders' Bill of Rights by Rep. Carolyn Maloney, D-N.Y., to passage
after President Obama took office.
Pelosi said the credit card industry spent $3 million in an unsuccessful
attempt to defeat Maloney in 2010.
"First of all, what you are contending is not true," Pelosi said at her news
briefing last week. "But second of all, we are very proud of our record of
Croft asked what was untrue given that the Pelosis had bought the Visa stock
two years earlier.
"Well, I have many investments ...," Pelosi said. "I will hold my record in
fighting the credit card companies, as a speaker of the House or as a member
of Congress, up against anyone. We had passed the Credit Cardholders' Bill
of Rights. I don't know what your point is."
Croft then asked whether there was an appearance of a conflict of interest.
"No, it only has the appearance if you decide that you are going to
elaborate on a false premise," Pelosi said. "But it is not true, and that is
When Croft said, "I don't understand what part is not true," Pelosi replied,
"That I would act upon an investment."
Boehner has adviser
Boehner was asked at his news conference why he traded in insurance industry
stock shortly before announcing that a plan for national health insurance
was dead. Boehner said a financial adviser makes decisions on day-to-day
trading in his investments.
The "60 Minutes" segment follows a flurry of recent interviews, including a
segment on the program last week by disgraced former lobbyist Jack Abramoff,
who served 3 1/2 years in prison for his 2006 conviction in a lobbying
corruption scandal that helped bring down former House Majority Leader Tom
Abramoff said he lavished gifts on members of Congress, offered lucrative
jobs to their staff and got them to insert opaque legislative language into
bills that benefited specific clients. Pelosi promised to "drain the swamp"
in Washington when she took control. Abramoff asserted that reforms have
Pelosi's office said "60 Minutes" told her staff that the report was based
on a book by conservative writer Peter Schweizer, a fellow at the Hoover
Institution at Stanford University, who earlier had accused the Pelosis of
hypocrisy for hiring non-union labor at their Napa vineyard.
Labor at the vineyard
A report at the time by ABC's San Francisco affiliate, KGO-TV, found that
the Pelosis paid their workers more than union wages and that it would have
been illegal for them to encourage unionization.
Several studies have shown that members of Congress and their staffs do
better in the stock market than the public. A 2011 study by four university
researchers found that a portfolio that mirrored stock purchase by House
members from 1985 to 2001 beat the market by 6 percent a year. The same
authors found that senators beat the market by 12.3 percent from 1993 to
The Wall Street Journal reported a year ago that in 2008 and 2009 at least
72 Congressional aides traded shares of companies that their bosses helped
oversee. The staff interviewed included a Pelosi aide who said her husband
made the trades based on newspaper reports and that she knew nothing about
A bill by Reps. Louise Slaughter, D-N.Y., and Tim Walz, D-Minn. called the
STOCK Act, or Stop Trading on Congressional Knowledge Act, would ban members
of Congress and staff from insider trading. The legislation, which Pelosi
supports, was first introduced in 2006 and has gone nowhere.
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