Nancy Pelosi, the House Minority Leader and former Speaker of the House, is accused of insider trading by some, including CBS’s “60 Minutes.”
Pelosi and her husband, Paul, reportedly bought between $1 and $5 million worth of Visa shares at an initial public offering back in March 2008. The shares were tremendously oversubscribed, and the stock shot up from its initial price of $44 to $65 almost overnight.
Even if the Pelosis only bought $1 million of the stock, they would have made over $100,000.
Peter Schweizer, a conservative author from Florida, purports that the reason for Pelosi and other politicians’ success in the market is due to an unfair advantage: those in Congress enjoy access to information and legislation that affects the country’s finances, but are immune to insider trading rules.
What this means is that when legislation is near completion that would either help or hinder a particular business, politicians can bet on the outcome and make huge profits.
Schweizer alleged the Pelosis did just that.
In Schweizer’s new book, “Throw Them All Out: How Politicians and Their Friends Get Rich Off Insider Stock Tips, Land Deals, and Cronyism That Would Send the Rest of Us to Prison,” he claimed that the ex-Speaker and her husband knew of a bill that would hugely affect the credit care industry, and used it to their advantage.
While the term “insider trading” usually applies to CEOs and other high-ranking officials within a company, Schweizer points to the immunity of Congress to these rules, effectively making all the legislatively influenced trades completely legal.
“It’s not illegal, but I think it’s highly unethical, I think it’s highly offensive, and wrong,” said Schweizer on “60 Minutes.”
A spokesperson for Minority Leader Pelosi, Drew Hammill, attacked both the claims and Schweizer’s credibility.
"Congress has never done more for consumers nor has the Congress passed more critical reforms of the credit card industry than under the Speakership of Nancy Pelosi,” Hammill said in a statement Sunday.
Hammill also chastised “60 Minutes” for using the reporting of Schweizer, whom he called “an already-discredited conservative author who has made a career out of attacking Democrats."
The “60 Minutes” report also questioned the possible soft corruption of other politicians who have benefitted from movement in the stock market, including House Speaker John Boehner.
Boehner absolved himself of all fiscal responsibility with a simple statement to CBS: “I have not made any decisions on day-to-day trading activities in my account- and haven't for years… I do not do it, haven't done it and wouldn't do it.”