Wednesday, December 29, 2004

Insider trading as congressmen

By Jonathan Turley in USATODAY.
Congress has excluded investment income, such as stocks, from ethics limitations on income. The result is that members routinely make killings in the market in areas where they legislate. One study by the University of Memphis found that 75% of randomly selected members had 'stock transactions that directly coincided with (their) legislative activity.' …

[Sen. Ted Stevens, R-Alaska] came to the Senate with modest means, particularly after heavy investment losses in the 1980s. In 1997, he had a Scarlet O'Hara "I'll never be hungry again" moment. According to a Los Angeles Times investigation, he decided to get "serious about making money" and contacted lobbyists about possible deals.

Real estate developer Jonathan Rubini arranged for Stevens to get into a deal in which he turned $50,000 into as much as $1.5 million — and Stevens was the only investor not liable for any debts, the Times said. In the meantime, he muscled through a $450 million contract for Rubini from the military, despite the view of Air Force officials that Rubini "lacked capacity and adequate funding."

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