Thursday, December 08, 2011

Thrown Out, But Not Forgotten

Back in 2006, Rod Grams was challenging Jim Oberstar for his MN CD-8 Congressional seat and we interviewed him on the NARN First Team. One of Grams’ criticisms of Oberstar was that he didn’t really live in his district anymore, he spent most of his time living in a million dollar mansion in Potomac, Maryland.

At the time, I was more intrigued by the wealth necessary to maintain that lifestyle than the residency issues. I asked Grams how a guy like Oberstar could enter his 30+ year career of “public service” as a pauper, but emerge on the other side a member of the landed gentry. Grams credited it to marrying well, Oberstar's second wife was independently wealthy and was responsible for setting up the distinguished gentleman in the big house on the bay.

Turns out that may not have been the only way Oberstar was able to sustain the lifestyle of the rich and famous. Peter Schweizer has a new book about Congressional corruption called “Throw Them All Out”. There is a chapter on the remarkable acumen of Senators and Congressman in perfectly timing stock trades, buying shares in companies whose stocks are about to rise and dumping stocks that are about to decline. It just so happens that the fortunes of these various companies are often decided by laws passed in Washington. For whatever reason, the people involved with creating, or stopping, these laws often make investment decisions immediately in advance of the public being informed of what is about to happen with the law.

Among the litany of public servants in Congress that Schweizer identifies as participating in these suspiciously well-timed trades, only one name from Minnesota emerges. This excerpt is in regard to the passage of the Medicare prescription drug benefit in November of 2003.

… James Oberstar of Minnesota quietly sold off his shares in the generic drug manufacturer Pharmaceutical Resources (now Par Pharmaceuticals) on September 22 and October 17 as the bill moved toward passage. He sold his holdings when the stock was selling at more than $70 per share. After Bush signed the bill, shares plummeted to $40 within a few months, as generic drug makers lost some competitive advantage to name-brand drug providers. Three days before President Bush signed the Medicare legislation into law, Oberstar also sold his shares in HealthExtras (now Catalyst Health Solutions), a pharmacy insurance management services firm. After Bush signed, the stock lost close to 10% of its value.

The voters did throw Oberstar out in 2010. Although this was primarily due to the abandonment of his pro life voting record in order to support Obamacare. No quarrel was ever made with regard to his alleged use of political inside information to enrich himself. That’s the case for most of the practitioners of this dark art. The House and Senate do not police this issue themselves, their ethics committees have consistently looked the other way or approved of this behavior outright. And beyond the occasional reports that their Congressman is living in a mansion a thousand miles away from their district, the voters are left unaware that there’s something not quite right with how these people are conducting their financial affairs.

Hopefully Schweizer’s book will start to wake people up. It was the source of a 60 Minutes investigation and Schweizer has been promoting it all over talk radio. He’ll also be this week’s guest on the Hinderaker-Ward Experience podcast on Ricochet (to be posted tonight or tomorrow).

To get the full story, buy the book “Throw Them All Out”. It would make the perfect stocking stuffer for the Tea Party member in your life.