While Congress spent the past week embroiled in fallout from Representative Anthony Weiner's indecent disclosures, yesterday every member had to pony up their own personal disclosure. Financial that is. An annual rite on Capitol Hill is the release of each member's assets and liabilities, excluding their home.
The filing deadline for the 2010 calendar year was May 15 and the documents were released yesterday. The House of Representatives fully embraces the exercise, making all House financial disclosure documents immediately downloadable online. The Senate clearly didn't get that transparency memo; it offers up only paper copies of the filings. What follows is a spin through the filings of some House leaders. I'll follow up soon with a companion post looking at Senate leaders ... once everything is scanned for easier consumption.
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A review of the financial disclosure forms filed by four of the House of Representative's major power players unearthed some interesting nuggets. While the 2010 financial disclosure President Obama and the First Lady released earlier this spring showed the First Couple steering clear of any direct investment in stocks, Speaker of the House John Boehner and House Minority leader Nancy Pelosi aren't shy about owning individual stocks. Boehner is an extremely active investor, making more than 100 trades last year. Pelosi and her husband took a major bath on 2010 sales of some Silicon Valley investments. Yet they also made a killing on one as well. Paul Ryan is big on limited partnerships -- and paying for his kids' college educations. And Barney Frank clearly thinks Meredith Whitney is way off base.
Once Michelle Bachmann gets around to filing her 2010 financial disclosure -- she was one of 76 representatives and 20 senators to request an extension -- I'll take a spin through her filing along with Ron Paul, the other current member of Congress vying for the 2012 Republican nomination for President. And just for the record, Anthony Weiner's financial disclosure was a lot tamer than his other sharing. He listed about two dozen individual stock holdings, ranging from Hewlett-Packard to LiveNation.
Nancy Pelosi (D-CA) : A lesson in tax-smart investing
Losing her perch as Speaker of the House to John Boehner wasn't the only 2010 loss for California's Nancy Pelosi. She and her husband Paul reported losses of between $400,000 and $4 million from the sale of high profile tech company stock holdings:
• Cisco: sold 100%. Capital loss of $100,000-$1 million
• Ebay: sold 100%. Capital loss of $100,000-$1 million
• Yahoo: sold 100%. Capital loss of $100,000-$1 million
• Motorola: sold 100%. Capital loss of $100,000-$1 million
Only Motorola isn't based in Pelosi's Silicon Valley backyard. (For the record, she doesn't represent Silicon Valley, but rather San Francisco, 30 miles north.)
That might be a big headache if the Pelosis relied on her $230,000 earned income to make ends meet. But that's not an issue. It looks like those tech stock losses were in fact a smart tactical move to help the couple offset a massive capital gain they also booked in 2010, courtesy of Silicon Valley's cash machine: Apple. The Pelosis sold a chunk of their Apple holdings and reported a capital gain of between $1 million and $5 million. For the record, the stock has gained another 40 percent since the Pelosis sold last spring. And hey, they still report owning between $500,000 and $1 million of Apple stock.
As large as their stock portfolio is, it's real estate that makes up much of the Pelosi fortune. Disclosure rules allow representatives to exclude their primary and vacation homes in reporting assets, unless they derive income from any property. And the Pelosis have multiple residential and commercial properties that in fact generate income. A Napa Valley house in the town of St. Helena is listed at a value of $5 million to $25 million. The Pelosis reported earning between $5,000-$15,000 last year from sales of grapes grown on the property. The Pelosis also own another Napa valley property valued at between $500,000 and $1 million that generated between $15,000-$50,000 in income last year. All told their income-generating property holdings -- commercial and residential -- have a total value of between $8.5 million and $41 million according to the representative's filing. They also are investors in a limited partnership that owns one of the toniest Napa resorts, Auberge de Soleil. Last year the couple earned between $100,000-$1 million on their Auberge investment.
Though those are some sizable assets, the Pelosis aren't shy about borrowing either. The value of a handful of mortgages on those properties range between $4.75 million and $21.5 million. There's also a home equity line of credit taken out in 2002; the line value is between $1 and $5 million. The only new loan activity in 2010 was a personal loan taken out by her husband for between $1 to $5 million. No doubt there's plenty of collateral for that loan, if needed. Paul Pelosi's stake in the United Football League's Sacramento Lions is valued at between $5 million and $25 million.
Speaker of the House John Boehner: A very active investor.
The Speaker of the House clearly isn't a fan of a passive investing approach, even though reams of data show it outperforms active investment. Speaker Boehner's investments include a mix of more than 100 actively managed mutual funds and individual stocks, including a stake in Goldman Sachs valued at between $15,000 and $50,000. Moreover he reported 121 trades in 2010.
An International Appetite
The vast majority of the Speaker's investments are reported as having a year-end value of between $1,000 and $15,000 or $15,001-$50,000. But he's opted to focus most of his international investments on a few larger fund investments. Boehner's investments in Henderson Global Investors International Opportunities fund, Mutual Global Discovery, Harbor International fund each have stated values of $100,000-$250,000.
Bottom Fishing in Battered GSEs?
Within his traditional IRA Speaker Boehner bought (and sold) shares of Fannie Mae and Freddie Mac in 2010.
For the 2010 calendar year he reported earned income of $193,400.
Paul Ryan: Prepping to Foot the Bill for the Kid's College Education
The chairman of the House Budget Committee is on a near-constant loop telling us how broke government is, and thus in need of drastic spending cuts. Ryan and his wife Janna seem determined to send their kids to college without the need to tap federal Stafford or PLUS loans. His financial disclosure shows a 529 college savings plan for daughter Elizabeth valued at between $50,000 and $100,000 and another 529 account for son Charles valued at $100,001-$250,000. Youngest son Sam doesn't (yet) have his own dedicated 529. Then again, all 529s can be shifted to other beneficiaries, so maybe the Ryan's figure the $150,000 or more they already have sitting in the two 529 funds is enough for all three kids.
Ryan's earned income for the year was $174,000 -- the standard pay for house members. His biggest investments are a 20 percent stake in a limited partnership, with Ryan's share valued at $250,001-$500,000 and another 20 percent stake in a second partnership valued at $100,001-$250,000. His wife is a partner in two Oklahoma mining and minerals firms; her stakes are listed at values ranging from $100,001-$250,000 for each investment. She also has additional partnership investments in Oklahoma and Nashville.
Ryan, the architect of a controversial proposal to overhaul Medicare and an opponent of the Affordable Care Act, has a small investment ($1,000-$15,000) in Medco Health Solutions, which could be a beneficiary of health care reform. Medco is a pharmacy benefit manager; with 32 million people expected to gain health insurance through health reform, that's a large potential new customer base for covered prescription drugs. The Ryan disclosure form also lists investments in drug makers Baxter International, Bristol Myers, Abbot Labs and Edward LifeSciences. Among his other investments, Ryan also reported investments in both Goldman Sachs and Berkshire Hathaway (B shares) valued between $1,001-$15,000.
Barney Frank: Bonding with Munis, not Financial Stocks
As half the namesake of the Dodd-Frank financial reform bill, I figured it would be interesting to see how the Massachusetts representative invests. Let's just say it sure would be fun to seat Frank next to municipal bond basher Meredith Whitney at a get together. The Massachusetts representative lists 34 individual municipal bond investments, all in-state issues. The stated value is somewhere between a shade under $1 million to as high as $2.36 million. Not only is all income free of federal tax, it also steers clear of Massachusetts's 5.3 percent state income tax.
No surprise, you won't find Goldman Sachs, JP Morgan or Bank of America among Frank's personal investments. His only stock holdings are through multiple accounts in the Calvert Social Investment Equity fund with a combined value of between $240,000-$600,000.