You cannot read the description of the personal stock trading allegedly conducted by Rep. Spencer Bachus and other members of Congress during the financial crisis and conclude anything other than that our government is corrupt.
Yes, this behavior may be technically legal, because of an absurd loophole that some argue makes insider-trading rules not apply to Congress.
Yes, this behavior may be widespread on Capitol Hill. But there is no universe in which a reasonable person would consider this behavior ethical or okay. That's why there is renewed traction in the Senate on two bills that would FINALLY prohibit members of congress from using nonpublic information for financial gain.
Offenders of Crony Capitalism
Many members of Congress are said to have made suspiciously timed trades, including John Kerry, Dick Durbin, and Jim Moran. But Rep. Spencer Bachus takes the cake.
According to a new book called Throw Them All Out by Peter Schweizer, as relayed by Dave Weigel at Slate, Rep. Bachus made more than 40 trades in his personal account in the summer and fall of 2008, in the early months of the financial crisis.
The fact that Bachus personally traded while getting private government briefings is bad enough. The fact that he was the ranking member of the House Financial Services Committee at the time is simply outrageous.
In one case, the day after getting a private briefing on the collapsing economy and financial system from Ben Bernanke and Hank Paulson, Rep. Bachus effectively shorted the market (by buying options that would rise if the market tanked.)
A few days later, after the market tanked, Bachus sold his position and nearly doubled his money.
If a corporate executive or Wall Street trader did this--cashed in personally after getting private, non-public information from his work--Rep. Bachus and every other member of Congress would be up in arms about corruption and insider trading.
And they would be right.
- Spencer Bachus