(RNN) – Dozens of members of Congress adjusted their stock portfolios immediately after meeting with key White House officials about the economic collapse and the $150 billion stimulus package.
The Washington Post reported Sunday that 34 members of Congress "recast" their financial portfolios during the financial meltdown immediately after conversations with key cabinet members, including Treasury Secretary Henry Paulson, Paulson's successor Timothy Geitner or Federal Reserve Chairman Ben S. Bernanke.
The members of Congress were almost evenly split between parties, with 19 Democrats and 15 Republicans named in the report. Some of them held key leadership positions, including then-House Minority Leader John Boehner, who was charged with being a key negotiator of the stimulus package.
On Jan. 23, 2008, according to the Post, Boehner met with Paulson, and then moved $50,000 to $100,000 from a mutual fund to a more conservative investment. According to the report, the White House unveiled the stimulus package the next day.
On Jan. 11, in the midst of the White House attempts to rein in mortgage lenders, Sen. Ben Nelson, D-NE, sold between $250,000 and $500,000 in Lehman Brothers certificates of deposit. He then purchased between $100,000 and $200,000 in Treasury notes, a much safe investment.
Records show that Nelson had met with Paulson just the day before. Lehman Brothers, then the fourth-largest investment bank behind Goldman Sachs, Morgan Stanley and Merrill Lynch, filed for bankruptcy protection on Sept. 15, 2008, signaling the climax of the financial collapse.
Members of Congress made changes to their portfolios 166 times within two business days of meeting with or speaking with the administration officials, the Post reported.
The trades were legal, but many ethicists say members of Congress should not act on their financial portfolios when they are in the position to "know more than the public" knows, or when they could influence U.S. financial policy.
The Stock Act, passed this year, specifically bars lawmakers, their staffs or families from using information gleaned from their legislative rolls to benefit themselves financially.
"Members of Congress are still loosey-goosey about what they require of themselves," Richard W. Painter, who teaches securities law at the University of Minnesota, told the Post. "I think it's time for Congress to impose the same rules on themselves that they impose on others. The Stock Act doesn't do that."
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Rep. John Boehner is now Speaker of the House. (Source: PBS)
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