Pelosi & Biden: Who Watches the Watchmen?

There are two separate stories in the recent media that I found interesting. For the sake of brevity, they should have been combined into one. The details are different but the themes are nearly the same.

The first is the introduction of a bill that focuses on how congressmen often trade stocks after they are given classified information about something that can be hugely harmful or beneficial to a company or an industry. 

For example, imagine there was news of a bill, regulation, tax or tax break, or even an impending crisis, that Senator This or Representative That was made aware of before those outside of Congress could be. Imagine further that this senator or congressman owned — or could buy — stock that would be affected by this news. The temptation is obvious.

According to the New York Times:

“At least 97 current members of Congress bought or sold stock, bonds or other financial assets that intersected with their congressional work or reported similar transactions by their spouse or a dependent child.”

There are many famous examples. One was Spencer Bachus, who was accused of using his position as the ranking Republican member of the House Financial Services Committee to trade stock options based on being told of the impending financial crisis. Another would be Senator Richard Burr, who was said to have sold his healthcare stocks at the onset of the COVID pandemic based on information he received as a member of a Senate committee on health policy. 

However the best of the best when it comes to trading stocks based on non-public information is Nancy Pelosi. According to Jacobin:

Robinhood-obsessed day traders are increasingly abandoning Reddit meme stocks and Dogecoin and closely following TikTok and Twitter accounts that have sprung up to track Nancy Pelosi’s stock-buying wizardry. There’s even a “social investing” app called Iris that allows users to snap up everything she buys.

“Every single stock she has bought in the last two years has gone up significantly,” Christopher Josephs, cofounder of Iris, told Yahoo.

That’s why the Speaker of the House is our 2021 Wall Street Trader of the Year. In the halls of Capitol Hill, she might be a dove meekly brokering compromises with moderate Democrats on policy, but on the New York Stock Exchange, she’s a Gordon Gekko–like hawk unleashed, a psychic with an uncanny ability to read the market better than Warren Buffett.”

Pelosi demonstrated her enviable stock trading prowess many times, including just recently when she and her husband “sold 30,000 shares of Google stock a month prior to the Dept. of Justice's announcement of an antitrust lawsuit against the tech giant according to a financial disclosure filed with the House of Representatives.” 

The Pelosi Google sale illustrates the toothlessness of the STOCK Act which was designed to prevent this sort of malfeasance by requiring members to report stock trades within 45 days. Alas, though this may be hard to believe, Congress did not do a very good job creating rules to prevent members of Congress from enriching themselves. The STOCK Act is reportedly violated regularly and no wonder, penalties for violating it begin at a mere $200 dollars.

However, Pelosi is too experienced a politician to behave recklessly. She takes an occasional hit to deflect attention from her trades when she feels eyes looking at her too intensely, such as when she sold her Nvidia stock at “a loss a day before the Senate passed a multibillion-dollar bill aimed in part at boosting U.S. chip manufacturing that sent Nvidia shares surging, a decision Pelosi’s office says was to avoid further ‘misinformation’ about the couple’s investments.” 

And, when her colleagues pushed a bill introduced by Republican Chip Roy and Democrat Abigail Spanberger called the Transparent Representation Upholding Service and Trust (TRUST) in Congress Act that would have banned members from trading individual stocks, Pelosi was smart enough to not fight it directly. Instead, she introduced her own bill, which was called the Combating Financial Conflicts of Interest in Government, that would require Congress members to divest from their stocks or put them in a blind trust. The rub is that members can define “blind trust” themselves. 

Hopefully the STOCK Act will be replaced with the passage of a bill introduced by Senator Josh Hawley. 

Unlike the STOCK Act, which only required lawmakers to report stock transactions, or Nancy’s bill, Hawley’s bill would ban lawmakers from trading individual stocks entirely. Those who transgress this ban would not just be slapped with a fine of a couple of Benjamins, but would be forced to surrender all profits of the trade, or if no profit is seen, not allow the transgressions to take a tax deduction on the losses. There would also be a fine levied. 

Hawley calls the bill the Preventing Elected Leaders from Owning Securities and Investments Act, or the PELOSI Act, for short. If only Hawley would introduce a Ban of Intelligence Documents Extracted Nefariously bill, or BIDEN bill. 

That would be appropriate given how much both Biden and Pelosi have in common, as anyone who looked at their sons can attest. 

However, in many ways, Paul Pelosi, Jr. is as much of a “princeling,” to use Devine’s word, as Hunter.  In fact, he mirrors Hunter in many ways. Both graduated from Georgetown University. Both have law degrees. Both are reportedly multi-millionaires. Both receive special advantages because of their last names. Hunter traveled with then-Vice President Biden on Air Force Two to China in 2013, allowing him to develop business interests in the area. Paul traveled with then-Speaker Pelosi to Taiwan as part of her official delegation in 2022, allowing him to develop business interests in the area. 

Fox News’ Jesse Waters does an admirable job here detailing describing Paul Jr and his trip:

“If you thought Hunter Biden's business deals were shady, just wait. Pauly Jr. is on the payroll of two lithium mining companies and Asia just happens to be a lithium gold mine and Taiwan just happens to be a world leader in lithium battery production. He's also heavily invested in Singapore's energy sector. Wasn't that another stop on Nancy’s trip?

South Korea is another place where the Fresh Prince does business. Just a few months ago, his company struck up an EV battery deal there. What do you know, Nancy, went to South Korea also. We didn't get any pictures of Pauly there, but maybe he took a quick trip himself to China alone. I mean, his mother's always been very interested in that country.” 

The saga of Hunter Biden has been well-documented, especially by Miranda Devine, who can be heard here: 

The primary difference between the Pelosis and the Bidens is the route they take to achieve their ends. The Pelosis traffic in stocks; the Bidens prefer classified documents. 

It has not been reported what the topic is in every document Biden’s pilfered and scattered in his office, homes, and garage. However, we know that at least one of the documents, found in the office at his University of Pennsylvania think tank, is related to the country with which the Bidens had many shady business deals: Ukraine. Other documents were stored in places likely accessible to Hunter Biden and his posse of drug dealers, prostitutes, and other such undesirables, and who knows who else. 

Furthermore, as Miranda Devine reported, Hunter’s access to classified information may have inspired an email found on his infamous laptop:

“Hunter also had free rein in his dad’s White House office, and his privileged access meant his name never showed up on visitor logs. For instance, he took the infamous photo of his then-“best friend in business,” Devon Archer, with his father in the VP’s office in April 2014, shortly before the pair joined the board of the corrupt Ukrainian oil company Burisma, which paid Hunter $83,000 a month. That photo ended up briefly on the Burisma website before being taken down on the instructions of a White House lawyer. 

One striking email during this period stands out. It was from Hunter to Archer on April 13, 2014, a week before Joe Biden visited Ukraine to meet then-Prime Minister Arseniy Yatsenyuk and refers to “my guys upcoming travels.” 

For Hunter, it was an uncharacteristically lengthy email, listing 22 points about Ukraine’s political situation, with detailed information about the upcoming election and predicting an escalation of Russia’s “destabilization campaign, which could lead to a full-scale takeover of the eastern region, most critically Donetsk. 

...

It’s a prescient and very well-informed email, unlike anything else Hunter wrote in the nine years covered in the laptop, and it has the distinct flavor of an official briefing, perhaps even a classified one.”

Soon after this email, Hunter was given an $80,000-a-month job in Ukraine on the board of an energy company despite having no background in energy. 

Politicians flaunt their wealth like YouTubers trying to convince their audiences to buy their $10,000 dollar a day trading course. Yet, one cannot afford multiple mansions on a politician’s salary. Some of the wealth some politicians accumulate comes from their access to information and/or documents not available to their constituents. It is classic insider trading -- the same crime for which Martha Stewart, Raj Rajaratnam, and Ivan Boesky were famously sentenced -- yet it is difficult to sentence people for breaking the law when they are the people who write them.

— DK