I've been reading for years that members of Congress on average do a whole lot better than the average person out there with how their stock portfolios perform, so this doesn't come as any surprise to me. In an interview with CNBC's Eamon Javers, former convicted lobbyist Jack Abramoff, who's out there pushing his new book, accused members of Congress of insider trading.
Somehow I doubt we can count on members of Congress to do anything about the conflict of interests with their stock portfolios any more than we can count on them to clean up the system of legalized bribery it takes to get them elected into office in the first place.
As many as a dozen members of Congress and their aides took part in insider trading based on foreknowledge of market moving information on Capitol Hill, disgraced Washington lobbyist Jack Abramoff told CNBC in an interview. [...]
The former lobbyist said the amounts members of Congress earned trading off their inside knowledge ranged from as little as $2,000 to, as much as "several hundred thousand dollars," that was claimed by one member of Congress.
Abramoff declined to name the members of Congress.
"It was more, 'Look at me, I'm a real great stock trader,'" Abramoff told CNBC of the congressional bragging. "All of a sudden somebody from a background maybe in law, maybe in some other unrelated business area, all of a sudden is picking winners and losers in the market." [...]
At the time, Abramoff, who was involved in an extensive corruption ring, didn't think much of it. But after years in prison to reflect on the culture of corruption in Washington, Abramoff says he thinks trading based on inside Congressional knowledge is wrong.
"These people should not be using whatever information they gain as public servants to benefit themselves, any more than they should be taking bribes," he said.
Generally, however, legal analysts say that Wall Street insider trading laws do not apply to Congress. As an open and public institution, the legal assumption has long been that any member of the public can have access to information about how Congress works. In practice, though, that's simply not true, as powerful members of Congress come into contact daily with market-moving tidbits. That gap between the law and the reality has made Capitol Hill a virtual free-fire zone for insider trading. Over the years, academic studies have found that members of the House of Representatives beat the market by as much as six percent per year and members of the Senate do even better than that.