A few weeks ago, Congressman John Kline (R-MN) was confronted by voters over congressional insider trading. Like many lawmakers who have tried to deflect the issue, Kline claimed that no such problem exists. “I don’t know that it’s being done,” said Kline, seemingly unaware of insider trading allegations against Spencer Bachus, Lamar Smith, and other members of Congress.
Although insider trading is technically illegal, lawmakers face no real limits in investing in companies they oversee. The STOCK Act, legislation originally meant to curb wide ranging abuses, was watered down before passing the House of Representatives. Congressmen can still invest in a company just before passing or sponsoring a bill that directly benefits it.
An angered Kline eventually turned to the crowd, and asked them for examples of insider trading. “It’s being done by [Congressman] Darrell Issa,” one audience member replied. As I reported last year, Issa bought tens of thousands of Goldman Sachs bonds while aggressively blocking an SEC investigation of the company over allegations of fraud (the New York Times later confirmed my reporting).
Asked about the Issa issue, Kline surprisingly floated support for an Ethics Committee inquiry:
KLINE: I’m supportive of the Ethics Committee looking into whatever is under its purview. [...] It is illegal for any member of Congress to do any insider trading.
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