60 Minutes: Insider trading rife -- and legal! -- for congressmen (VIDEO)

"This is a venture opportunity. This is an opportunity to leverage your position in public service and use that position to enrich yourself, your friends and your family."

VIDEO FOLLOWS

Sounds like what the leader of the ruling military junta would say as the recruitment pitch for a new minister of finance post for his son-in-law, doesn't it? But it isn't. This is a quote from Peter Schweizer, a fellow at the Hoover Institution, a conservative think-tank, referring to the job of US congressman or senator.

According to a scathing expose on 60 Minutes last night, members of Congress, who conveniently write the laws that apply to themselves, are legally permitted to act on market-moving inside information when making stock trades – information that would get them thrown straight into jail if they weren't insulated by their own cushion of blatantly self-serving laws.

Here's are some quotes from the 60 Minutes segment, which is embedded in full below and which, if it doesn't make you demand to scrutinize the timing of every single one of of your congressman or senator's stock trades for as long as they've been in office, means you have no spine and deserve to be ripped off by the people who are supposed to be representing you:

Schweizer says he wanted to know why some congressmen and senators managed to accumulate significant wealth beyond their salaries, and proved particularly adept at buying and selling stocks.

Schweizer: There are all sorts of forms of honest grafts that congressmen engage in that allow them to become very, very wealthy. So it's not illegal, but I think it's highly unethical, I think it's highly offensive, and wrong.

Steve Kroft: What do you mean honest graft?

Schweizer: For example insider trading on the stock market. If you are a member of Congress, those laws are deemed not to apply.

Kroft: So congressman get a pass on insider trading?

Schweizer: They do. The fact is, if you sit on a healthcare committee and you know that Medicare, for example, is-- is considering not reimbursing for a certain drug that's market moving information. And if you can trade stock on-- off of that information and do so legally, that's a great profit making opportunity. And that sort of behavior goes on.

Kroft: Why does Congress get a pass on this?

Schweizer: It's really the way the rules have been defined. And the people who make the rules are the political class in Washington. And they've conveniently written them in such a way that they don't apply to themselves.

On Alabama Representative Spencer Bachus, then the ranking Republican member on the House Financial Services Committee and now its chairman:

While Congressman Bachus was publicly trying to keep the economy from cratering, he was privately betting that it would, buying option funds that would go up in value if the market went down. He would make a variety of trades and profited at a time when most Americans were losing their shirts.

On the permatanned House Minority Leader John Boehner:

During the healthcare debate of 2009, members of Congress were trading healthcare stocks, including House Minority Leader John Boehner, who led the opposition against the so-called public option, government funded insurance that would compete with private companies. Just days before the provision was finally killed off, Boehner bought health insurance stocks, all of which went up.

On Illinois Congressman Dennis Hastert:

Congressmen and senators also seem to have a special knack for land and real estate deals. When Illinois Congressman Dennis Hastert became speaker of the House in 1999, he was worth a few hundred thousand dollars. He left the job eight years later a multi-millionaire.

Jan Strasma: The road that Hastert wants to build will go through these farm fields right here.

In 2005, Speaker Hastert got a $207 million federal earmark to build the Prairie Parkway through these cornfields near his home. What Jan Strasma and his neighbors didn't know was that Hastert had also bought some land adjacent to where the highway is supposed to go.

Strasma: And five months after this earmark went through he sold that land and made a bundle of money.

Kroft: How much?

Strasma: Two million dollars.

Kroft: What do you think of it?

Strasma: It stinks.

 

WATCH THE VIDEO FROM 60 MINUTES:

The list goes on. Watch the segment, call your congressman and yell at them, spread the word. Just because it isn't illegal (the ones doing it are the same ones who make the laws, remember?) doesn't mean it's not insanely unethical.

It also doesn't mean it can't be made illegal, as it should be. If and when it is, we just might see an entirely new type of representative running for congress, one with an entirely different set of priorities that have more to do with what's good for the country, and less to do with buying ever larger cabin cruisers.