The ongoing tug-of-war between all parties concerning financial services reform got some added dimensionfrom a report on CBS’s 60 Minutes about legal insider trading involving the elected members of the U.S. Congress.
The report found that trading on insider information involving stocks, IPOs and real estate-related legislation which nets elected officials millions, yet is perfectly legal. Those officials who were interviewed (and many refused interview requests) did not acknowledge that these trading patterns constituted a conflict-of-interest.
While the report mainly interviewed current members of Congress — Nancy Pelosi (D-Cal.), John Boehner (R-Ohio); Spencer Bachus (R-Ala.), and former Illinois Congressman Dennis Hastert — the report could have named many more who profited on the federal governments payments to specific industries.
One high-visibility abuser would be W. J. “Billy” Tauzin (R-La.), who sheparded through key legislation that benefittred the pharmaceutical industry ; and changes to bank reform and commodity pricing practices that allowed Enron to create its own energy prices made possible by former Senator Phil Gramm, (R-Texas.) Gramm’s wife, Wendy, was chairwoman of the Commodity Futures Trading Commission at the time Enron received the preferential pricing policy OK.
Tauzin is now president of the Pharmaceutical Research and Manufacturers of America (PhRMA), the Washington lobby representing US drug manufacturers. Tauzin is believed to be paid about $2 million annually, or 15 times his congressional salary, working for the drug industry. Tauzin played a leading role in shepherding through Congress last year the Medicare prescription drug bill that brought a windfall of as much as $200 billion for the U.S. pharmaceuticals industry.
So it’s not surprising when discussions and votes about Dodd-Frank, fiduciary standards, and transparency are sidelined and eventually ignored by the elected officials and their anti-reform lobbyists.
The 60 Minutes report is available here.