Those In Power (And Already Well-To-Do) Are Entitled: “Perhaps That's The Story Of Life. . . ." DJT 3/18/20

Untitled, Acrylic on Panel, 18" x 24 ", Richard J Van Wagoner, Courtesy of Van Wagoner Family Trust**

Let’s begin by defining a few of terms.

Insider Trading is when a securities transaction occurs that is influenced by knowledge limited to only a small group of people inside a company whose stock is being traded. That knowledge gives such people an advantage, allowing them to profit from information that would influence the stock’s trading value before others in the market are on notice.

Information is Material if its release would affect the stock price.

An Insider has a relationship with the company that affords them access to information that has not been released to the public. Insiders are considered fiduciaries to the company and shareholders, prohibiting them from attempting to profit from Material Information that would place the fiduciary’s interests above those to whom they owe the duty.

Insider Trading, aces up the sleeves so to speak, benefits the cheater to the financial detriment of the very people they have a legal and moral duty to protect.

Severe civil and criminal penalties are meant to deter those who otherwise lack the moral wherewithal to resist the temptation.

Members of Congress are not corporate insiders. Their jobs require they have access to information that has not been released to the public, however, information that, if/when released, could/will affect the price of stocks in which Members, staff or family members may be invested or wish to invest. One would think they see themselves as fiduciaries who took oaths to protect constituents, investors and markets, and act accordingly by refusing to take financial advantage of information not yet released to the public to the detriment of other investors.

Does it come as any surprise that prior to April 2012, Members of Congress traded on material nonpublic—inside—information? Such “investing” by Members of Congress was both legal and common. Given the Senate’s green light to the current administration’s unprecedented corruption, perhaps the surprise is there was a time, long ago before America became great again, when Congress and a President actually took steps to curtail corruption, and it passed with overwhelming bipartisan support.

If you believe trading on inside information is limited to one party or the other, think again. Instances of trading on inside information by members of both parties is easy to find. Indeed, Dick Durban and John Boehner both attended a September 18, 2008 closed-door meeting with Henry "Hank" Poulson and Ben Bernanke, the Secretary of Treasury and chairman of the Federal Reserve respectively. They, and others who took the information and shorted the stock market thereafter, placed orders selling shares in mutual funds the next day. That same year Nancy Pelosi’s husband purchased 5,000 shares in an initial public offering (IOP) by VISA, Inc., while Congress was considering new credit card regulations. The shares increased in value $20 each within two days. (That transaction became the subject of a 60 Minutes investigative report.) House Majority Leader Eric Cantor added an amendment to proposed legislation which he characterized the “Pelosi Provision” meant to prohibit members of Congress from special access to IPOs because their position made them privy to inside information.

The Stop Trading on Congressional Knowledge Act of Congress, also known as the STOCK Act, passed and President Obama signed it into law on April 4, 2012. Senator Burr of newly minted #Burrisma, we are reminded, was one of three Senators to vote against its passage while 96 of his colleagues voted in its favor. Since its passage, which intended to create transparency of members’ financial increase and its source, Congress has backtracked, making reporting somewhat opaque and more difficult for the public to discern.

“The purpose of the STOCK Act ensured that the general prohibition against insider trading applies to members of Congress and other federal employees, including the president, vice president, and certain other members of the executive branch.

“To achieve this, the STOCK Act mandated increased levels of financial transparency, requiring high-ranking officials to file detailed financial disclosures. This included mandating filings within 45 days of any material gains, as well as the disclosure of home mortgage terms. It also forbade officials from participating in initial public offerings (IPOs).

“The STOCK Act was structured as an amendment to a pre-existing law, namely the Ethics in Government Act of 1978, which was passed in the wake of . . . Watergate . . . . This law created standards relating to the disclosure of financial information by government employees, and created websites and other mechanisms to permit public oversight of that information. As such, the STOCK Act built upon this legal foundation.”

Within one year of its passage, Congress weakened the financial disclosure requirements. Fortunately, congressional watchdogs are adept at locating and sifting through the haystacks.

Current heat is on Senator Burr of North Carolina and to a lesser extent at least four other Senators whose trading activities appear, for lack of a better term, questionable. In his own defense, however, Senator Burr revealed his heretofore undisclosed superpower, his capacity tightly (“almost air tight” to borrow a phrase for Larry Kudlow M.D.) to compartmentalize—and thereby make trading decisions solely on—publicly available information, from the highly secretive, classified, material information he receives as Chairman of the Senate Intelligence Committee.

“Richard Burr, Republican of North Carolina, and Kelly Loeffler, Republican of Georgia, are in the hot seat this week, facing questions about whether they misused their positions to shield their personal finances from the economic fallout of the pandemic, even as they misled the public about the severity of the crisis. According to analyses of their disclosure reports filed with the Senate, the lawmakers each unloaded major stock holdings during the same period they were receiving closed-door briefings about the looming pandemic.

“These briefings were occurring when much of the public still had a poor grasp of the virus, in part because President Trump and many Republican officials were still publicly playing down the threat. Instead of raising their voices to prepare Americans for what was to come, Mr. Burr and Ms. Loeffler prioritized their stock portfolios, in a rank betrayal of the public trust — and possibly in violation of the law.

“It is unclear precisely what information about the pandemic either Mr. Burr or Ms. Loeffler received in the briefings before their stock sales. But any use of nonpublic information in guiding such dealings would have been not only unethical but almost certainly illegal. Lawmakers and their aides are explicitly barred from using nonpublic information for trades by the STOCK Act of 2012 (the acronym stands for Stop Trading on Congressional Knowledge). Mr. Burr of all people should know this, since he was one of only three senators to vote against the bill.

“As chairman of the Intelligence Committee, Mr. Burr is privy to classified information about threats to America’s security. In February, his committee was receiving regular briefings about the coronavirus. He is also a member of the Health Committee, which, on Jan. 24, co-sponsored a private coronavirus briefing by top administration officials for all senators.

“On Feb. 13, Mr. Burr began a series of stock sales, according to an investigation by ProPublica, which found that, in 33 separate transactions, he unloaded ‘between $628,000 and $1.72 million of his holdings,’ including significant investments in three hotel chains. Unlike his previous disclosure reports, which showed a mix of selling and buying, these transactions were all sales.

“Mr. Burr’s public comments during this period were more bullish. In a Feb. 7 opinion piece for Fox News, he and his co-author, Senator Lamar Alexander of Tennessee, a Republican, boasted of how well Congress and the Trump administration had prepared America to deal with whatever public health threats came its way.

“To be fair, the senator did give at least a few of his constituents a heads up. At a Feb. 27 private luncheon with business and community leaders from North Carolina, he warned that the virus stood to cause major upheaval. ‘There’s one thing that I can tell you about this: It is much more aggressive in its transmission than anything that we have seen in recent history,’ he said, according to a recording obtained by NPR. ‘It is probably more akin to the 1918 pandemic.’ He told his audience to prepare for travel disruptions, school closings and other shocks to the system.

“On Thursday, Mr. Burr unleashed a Twitter thread accusing NPR of misrepresenting his speech in a ‘tabloid-style hit piece.’ He did not mention his stock dump.”

The penalties for violation of the STOCK Act are not subtle. As noted in a summary of the STOCK Act provided by the Congressional Research Service:

“Under current law, if convicted of certain offenses relating to corruption in public office while serving as a Member, a Member of Congress forfeits all of his or her creditable service as a Member for federal pension purposes. This bill expands that provision so that a Member of Congress would lose the credit for service as a Member for pension purposes if convicted of one of the numerous corruption offenses not only during time served as a Member of Congress, but also if convicted of any of such offenses while the President [if only], the Vice President, or as an elected official of a state or local government. The STOCK Act also adds numerous other federal criminal laws for which a final felony conviction would result in losing creditable service as a Member of Congress for federal pension purposes. Such other criminal offenses include conflicts of interest (18 U.S.C. §203); conspiracy to make false claims (18 U.S.C. §286); making false claims to the government (18 U.S.C. §287); vote buying (18 U.S.C. §597); illegal solicitation of political contributions from federal employees (18 U.S.C. §602); soliciting political contributions in a federal building or office (18 U.S.C. §607); theft, conversion, or embezzlement of government funds or property (18 U.S.C. §641); false statements to the government (18 U.S.C. §1001); obstruction of proceedings . . . ."

*My brother the very talented fiction writer and novelist, Robert Hodgson Van Wagoner, deserves considerable credit for offering both substantive and technical suggestions to and

**Richard’s list of honors, awards and professional associations is extensive. He was Professor Emeritus (Painting and Drawing), Weber State University, having served three Appointments as Chair of the Department of Visual Arts there. He guest-lectured and instructed at many universities and juried numerous shows and exhibitions. He was invited to submit his work as part of many shows and exhibitions, and his work was exhibited in a number of traveling shows domestically and internationally. My daughter Angela Moore, a professional photographer, photographed more than 500 pieces of my father's work. On behalf of the Van Wagoner Family Trust, she is in the process of compiling a collection of his art work. The photographs of my father's art reproduced in and are hers


Natural US Citizen. Caucasian. Shamed into blogging by DSM-V Cluster B 9/9-led regime, Utah's most embarrassing congressperson, and Newton's Third Law of Motion. The views expressed are mine.

USA, Utah, Salt Lake City


Get the latest posts delivered right to your inbox.

or subscribe via RSS with Feedly!