Stock gods reign on Capitol Hill, as money politics plagues US

According to a Financial Times report, around the time Silicon Valley Bank, Signature Bank, and Silvergate Bank went bankrupt in March, at least nine members of the US Congress – among them Josh Gottheimer from New Jersey, Jared Moskowitz from Florida, Dan Goldman from New York and John Curtis from Utah – sold their bank stocks. It must be mentioned here that Gottheimer is also a member of the House Financial Services Committee.

Last July, former speaker of the House of Representatives Nancy Pelosi’s husband Paul Pelosi was exposed for insider trading. Between 2019 and the fourth quarter of 2021, his investment portfolio had grown by 96 percent, earning him more than $62 million, surpassing Warren Buffett. Many ridiculed him as the “Capitol Hill Stock God.” The FT report shows that there are more “stock gods” on Capitol Hill.

In fact, a New York Times report last October suspected nearly 100 members of Congress, including Gottheimer, of insider trading. With more names joining the list it is clear that insider trading by US politicians is now an open secret.

The Stop Trading on Congressional Knowledge Act or STOCK Act enacted in 2012 prohibits members of US Congress from using insider information to trade in stocks and requires them to disclose trading information within 45 days.

However, the law does not prohibit relatives of Congressmen from trading in stocks. Rep. Adam Schiff, who led the investigation into former president Donald Trump’s dealings with Ukraine, sold up to $15,000 worth of stock in a California biotech company shortly after the House of Representatives passed a bill that would benefit the company.

In addition, lawmakers can avoid accountability by using third-party investment advisors, who may have access to inside information. Even if stricter laws are passed, it seems the lawmakers will always find a way to continue benefiting from insider information.

The root problem here is money in politics. Lawmakers need to raise millions of dollars to secure a seat in Congress; around $45,000 per day is needed to fund election campaigns. So once in office, they spend much of their time fundraising.

Their actions are, thus, always driven by money. The prevalence of “stock market gods” in Congress serves as a reminder of how powerful the influence of money is in politics.