Recently I wrote a blog called Pay to Play. It was about illegality in Pennsylvania where private persons paid money to government officials in order to get state-federal highway contracts.
Today I am writing about corruption on a scale that makes Pennsylvania look like a model of ethical conduct: corruption in the United States Congress. What is fundamentally different about Pennsylvania’s corruption and Congressional corruption is that the corruption in Pennsylvania was illegal, but federal corruption described below was legal because Congress determined that it was exempt from laws prohibiting insider trading.
In 2011 Peter Schweizer published a book entitled Throw Them All Out. It concerned insider trading by congressmen. Shortly after it was released, Sixty Minutes ran a story on this insider trading, and as a result, Congress passed the STOCK act (Stop Trading on Congressional Knowledge Act), which forbade congressmen or their aides to trade using insider information, and it also required reporting on any trades that had been made. These reports would become available online and thus able to be monitored by the public.
At some point after the STOCK act became law, congress passed another law crafted by the leadership, which released congressional assistants and aides from the reporting requirement. Thus, no public monitoring.
What was the congressional corruption?
Schweizer describes it as follows:
•Congressmen influenced the awarding of contracts to political friends
•They got access to initial public offerings through political friends in the investment industry
•They made investment decisions for themselves based on what they learned in committees behind closed doors
•They consulted with former government officials who now work for investment companies and hedge funds, and these former employees sell the information. Dan Quayle, Al Gore and Madeline Albright have their own investment funds.
•They purchased land and then used their influence to run federal projects nearby or through their land.
Here are some examples from Schweitzer’s book of Congressmen using their official positions for personal gain:
•Congressman Maurice Hinchey of New York took credit for sponsoring an earmark of $800,000 for development in the town of Saugerties. He owned land on which the development would occur which increased in value from $30,000 to $100,000 to a new value of $250,000 to $500,000 (reporting does not require exact numbers, but only a range of numbers.)