Nancy Pelosi Cashes in Like a Fat Rat
While businesses nationwide are closed and Americans everywhere are temporarily out of work, some already-rich politicians are getting richer. It’s a ugly story that stinks of insider trading.
In January, Democrat Speaker of the House Nancy Pelosi’s husband bought over $5.5 million worth of Amazon and Facebook stock. At first glance, that’s not suspicious, in and of itself. Paul Pelosi is a venture capitalist and investor.
But the timing of the purchase, and the subsequent windfall...now those bear closer examination.
Paul Pelosi bought those stocks while Congress was holding emergency closed-door meetings about the growing coronavirus crisis. By exercising call options, Mr. Pelosi was able to buy the stocks at a much lower price than they were trading. He bought 3000 shares of Amazon for $4.8 million and 5000 shares of Facebook for $720,000.
In the ten weeks since, the value of that purchase has increased dramatically. By mid-February, Amazon hit $1 trillion in valuation, trading for 16% over the closing price the day of Pelosi’s purchase. So far, the Pelosis have made $1.1 million in an unbelievably-lucky deal that is almost too good to be true.
But was it luck, Paul Pelosi’s shrewd business acumen, or something else?
The Pelosi purchase wouldn’t stand out as much if there weren’t other suspiciously-fortunate stock transactions involving politicians. Tellingly, these all took place in the days immediately before the coronavirus panic caused a stock market nosedive.
January 24th through February 14th
On January 24th, Senator Kelly Loeffler of Georgia was briefed by two members of President Trump’s Coronavirus Task Force. That same day, she and her husband, Jeffrey Sprecher, started selling stock.
Between the 24th of January and the 14th of February, the couple dumped nearly $2.5 million of stock. $500,000 of that stock was in Exxon Mobil, which has seen its value cut in half since the first of the year.
Of special relevance, they also bought stock in a company that makes work-from-home software. This is quite the coincidence, since this is exactly what millions of Americans were forced to do.
Again not at all a coincidence, Jeffrey Sprecher is Chairman of the New York Stock Exchange. He and Senator Loeffler have a net worth of over $500 million.
January 31st through February 18th
Between these dates, Senator Dianne Feinstein dumped up to $6 million in biotech stock. Allogene Therapeutics’ value has fallen by 20% since the first of the year.
The California Democrat, the ranking member of the Senate Judiciary Committee, went on spin control the minute the story broke. It was solely her husband, Richard Blum, who was responsible, Feinstein tried to explain. “She has no involvement in her husband’s financial decisions,” says her spokesperson.
Both Nancy Pelosi and Dianne Feinstein made MILLIONS off of their husbands’ “independent” decisions. How convenient.
Senator Richard Burr of North Carolina used over 30 transactions to dump $1.6 million in stocks. $100,000 of that stock was in firms like Wyndham Hotels and Complete Extended Stay. Because citizens are advised not to travel, the hospitality industry has been especially hard-hit by the coronavirus crisis.
Burr’s attorney says, “The law is clear that any American – including a senator – may participate in the stock market based on public information, as Sen. Burr did.”
That is correct — senators may use public information to guide their decisions. But the Stock Act of 2012 specifically prohibits members of Congress from using any nonpublic information they may learn in the performance of their duties. Legislators — and their staffs — “are not exempt from the insider prohibitions arising under the securities laws”.
Senator Burr was one of only three senators who voted against the bill.
Compared to the rest of his cronies, Senator Jim Inhofe of Oklahoma looks like he arrived late to the party. Inhofe “only” sold $100,000 of stock in an asset management company that has seen its value drop by a third.
Like the others, Inhofe feigns complete ignorance, saying, “I do not have any involvement in my investment decisions.”
Is a Reckoning Coming?
Since the story of these lucrative transactions came to light, there’s been outrage from both the Left and the Right.
The President of Accountable.us, Kyle Herrig, said, “…(any member) of Congress who profited off of advance knowledge of the crisis while they told the public not to worry should immediately resign and face the full consequences of the law.”
On the other end of the political spectrum, Conservative commentator Tucker Carlson said, “There is no greater moral crime than betraying your country in a time of crisis, and that appears to be what happened.”
The Justice Department has opened an official inquiry into these stock transactions, so this story will continue to develop.