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With Mike Pesca in for Tom Ashbrook
Are members of Congress using inside info to get rich? We’ll talk dirty politics and big money with a panel including former super-lobbyist Jack Abramoff.
It started with a basic question, as so many good investigations do. How is it that so many members of congress come into office as solidly middle class and leave quite rich. The answer, as Peter Schwiezer discovered was the rules don’t apply to them.
What Wall Street would call insider trading is legal for Senators and Congressmen, who are often in the position to be the ultimate insiders. Lobbyists like Jack Abramoff add another dimension of dirtiness, just ask him. Gore Vidal called Bribery our form of democracy, here’s the documentation.
This hour, On Point: The Politician Enrichment Racket.
Peter Schweizer, author of Throw Them All Out: How Politicians and Their Friends Get Rich Off of Insider Stock Tips, Land Deals, and Cronyism That Would Send the Rest of Us to Prison. You can find an excerpt here.
Thomas Ferguson, Professor of Political Science at the University of Massachusetts, Boston and a Senior Fellow of the Roosevelt Institute.
Jack Abramoff, former lobbyist and author of Capitol Punishment: The Hard Truth about Washington Corruption From America’s Most Notorious Lobbyist.
Congress is using non-public information to make stock trades and enrich themselves, contends author Peter Schweizer, in a new book detailing what he describes as rampant insider trading on Capitol Hill.
“During the debate over the Obama healthcare bill there were people on both sides of the aisle that were trading healthcare stocks that, if they were anyone else in America, the timing of their trades would have led the Securities and Exchange Commission to be suspicious,” he said. “For members of Congress, this is considered common practice.”
Compounding that problem is the “revolving door,” where Congressional staff leave for lucrative jobs in the private sector and often trade on their access to politicians that they previously worked for.
“What I would do was to offer a job to a staffer on the Hill…and the second that that job is offered, even if the jobs is a few years down the line, from that minute on, [the staffer] is owned by that lobbying firm,” said Jack Abramoff, the formerly jailed lobbyist. “Their loyalties switch and that is utter corruption.”
It is an open secret in Washington, Abramoff said, that politicians were trading on inside information. “It’s almost worse than insider trading, where companies trade on information that’s not yet public,” he said. “People on the Hill have information that companies themselves don’t even have yet.”
Unfortunately, Ambramoff conceded, reform efforts pushed through Congress rarely reform. “It’s actually worse than that: lobbyists look for these reform bills, gleeful, because they know that the people who are pushing these reforms really get too serious because they (a) want become lobbyists when they leave, and (b) benefit from the system while they’re in there. So, there’s nothing that they’re going to put forward to put a crimp in the lobbying world,” he said.
“Think of reform bills as moving trains that are going to pass, moving past the House and Senate and getting signed by the president. So clever lobbyists look to try to put onto those trains garbage that has nothing to do with reform. I myself tried to do it to the Help America Vote Act, where I tried to put a measure to get a casino legalized in Texas.”
“The worst thing it does is enables them [Congress] to go around patting themselves on the back and to tell everybody to go back to sleep, the problem is solved,” Abramoff said. “The problem is not solved.”
From The Reading List
60 Minutes "Washington, D.C. is a town that runs on inside information - but should our elected officials be able to use that information to pad their own pockets? As Steve Kroft reports, members of Congress and their aides have regular access to powerful political intelligence, and many have made well-timed stock market trades in the very industries they regulate. For now, the practice is perfectly legal, but some say it's time for the law to change."
The Daily Beast "Schweizer, who is 47, lives in Tallahassee with his wife and children (“New York or D.C. would be too distracting—I’d never get any writing done”) and commutes regularly to Stanford, where he is the William J. Casey research fellow at the Hoover Institution. "
CBS News "Jack Abramoff, the notorious former lobbyist at the center of Washington's biggest corruption scandal in decades, spent more than three years in prison for his crimes. Now a free man, he reveals how he was able to influence politicians and their staffers through generous gifts and job offers. He tells Lesley Stahl the reforms instituted in the wake of his scandal have had little effect."
This program aired on November 17, 2011.
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