Lawmakers Trade on Affected Companies

Last year Peter Schweizer, a research fellow at the Hoover Institution, was struck by the fact that lawmakers are free to buy and sell stocks in companies affected by the government policies they themselves write. Curious whether they acted on their insider knowledge, Schweizer delved into a trove of public databases and discovered that, yes, they certainly seem to. Newsweek’s Peter J. Boyer points out how lawmakers from John Kerry and Nancy Pelosi to John Boehner and Spencer Bachus make thousands of dollars by buying and selling stocks before legislation drives them up or down. For example, in 2009, John Boehner bought health-insurance stock while Congress was debating the public option. Nancy Pelosi participated in eight initial public offerings in 2008, including Visa Inc., while debating legislation that would have affected the credit-card industry. None of these deals are considered illegal, because insider-trading laws do not apply to members of Congress.