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Nancy Pelosi: Swamp Drainer

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Former Speaker of the House Nancy Pelosi made a 203 percent return on an investment in Visa, the credit card company. She and her husband Paul were able to buy between $1 million and $5 million (congressional members only have to disclose a purchase range) of a Visa initial public offering (IPO). In early 2008, she was given the opportunity to buy into the Visa IPO, a nearly impossible feat that average citizens could almost certainly never achieve. The majority of IPO purchase opportunities go to institutional investors, large mutual funds, or pension funds.

While Pelosi complained about credit card companies, on March 18, 2008, she bought Visa stock at $44 per share, the IPO price. Two days later, the price rose to $65 per share, a 50 percent profit. She bought Visa stock two more times. By her third purchase on June 4, 2008, Visa stock was worth $85 per share.

How, some may ask, did Nancy Pelosi get in on one of the most valuable IPOs in history? Corporations wishing to have congressional allies will occasionally pick members of Congress to receive IPOs. Pelosi received her Visa IPO almost two weeks after a potentially damaging piece of legislation for Visa, the Credit Card Fair Fee Act, had been introduced in the House. Coincidence?

If the Credit Card Fair Fee Act had been passed, it would have amended antitrust laws and required credit card companies to negotiate with merchants over interchange fees that credit card companies charge merchants when customers use the cards. Further, it would have given the Justice Department and the Federal Trade Commission the power to arbitrate credit card company and merchant disagreements. Pelosi eventually supported a bill, the Credit Card Reform Act. The interchange fees were unaltered in that bill, and the bill mandated that the interchange fee should be “studied.” Bottom line: credit card companies dodged a potentially costly bullet.

In December 1999, Pelosi  purchased shares of a company, OnDisplay. A few months later, OnDisplay was bought by Vignette, resulting in up to $1 million in capital gains for Pelosi. What was unusual about the transaction is that Vignette’s IPO was underwritten by a major campaign contributor and longtime friend of Nancy Pelosi.  Another coincidence?

In at least ten IPOs throughout her career, Pelosi has been “very lucky.” In 1993, Pelosi bought IPO shares in Gupta. The stock price rose 88 percent in one day, and she sold the stock the next day. Pelosi did the same thing with Netscape and UUNet, doubling initial investment in one day. Other IPO one day holds included Remedy Corporation, Opal, Legato Systems, and Act Networks. In November, 2007, Pelosi bought $500,000 in the IPO for Quest Energy Partners, a natural gas company. She then supported legislation that benefited Quest Energy. When asked about her investment, she shrugged and said, “That’s the marketplace.” Yet another coincidence?

All this activity from Nancy Pelosi, who said in an interview with NBC’s Brian Williams on November 8, 2006: “Drain the swamp means to turn this Congress into the most honest and open Congress in history. That’s my pledge, that is what I intend to do.”

In the spirit of fair play, both House Speaker John Boehner and Republican Rep. Spencer Bachus of Alabama have also had their investments investigated. Please read the aforementioned source for results. And, yes, this source quotes 60 Minutes, defended in comments from another post, so I encourage you to read the sources provided, then reach your own conclusions.

But that’s just my opinion.

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  • Glenn Contrarian

    Hi, Warren! Did you realize that by YOUR OWN WORDS you can’t believe what you wrote? Why, you ask? If you’ll remember, you’ll state that nothing that 60 Minutes states can be believed…and since the book that was the original source was featured by 60 Minutes, well, THAT means that it must all be a Bright Shining Lie, right?

    AND WHILE WE’RE AT IT, didja see what else the author Brian Schweizer (who is an editor for – wait for it – Breitbart) found?

    Bachus (R-AL), who was the ranking member of the Financial Services committee at the time (since the Democrats held the house) made about 200 trades as the financial crisis peaked, netting about $28,000. “What we know is that those meetings were held one day and literally the next day Congressman Bachus would engage in buying stock options based on apocalyptic briefings he had the day before from the Fed chairman and Treasury Secretary,” said Peter Schweitzer, a fellow at the conservative Hoover Institution, whose work was the basis for CBS’ report. “I mean, talk about a stock tip.”

    CBS also criticized House Speaker John Boehner (R-OH) for trading health stocks right before the public option was officially killed and noted that former Rep. Dennis Hastert (R) and former Sen. Judd Gregg (R) profited from steering federal earmarks towards projects in which they had a financial stake.

    Gee, look at all those REPUBLICANS doing the same thing, including (gasp!) John Boehner!

    Now how did their sins compare to Pelosi’s? I agree that it was a conflict of interest that Pelosi’s HUSBAND participated in the IPO…Unlike 60 Minutes’ allegations against Republicans, there was no evidence provided that Pelosi used her congressional position to unethically enrich herself or that she sought to protect the credit card industry in any way.

    So it would seem that you got SO excited about Pelosi…BUT THE NEWS YOU READ DIDN’T TELL YOU THAT THE REPUBLICANS’ CRIMES WERE SIGNIFICANTLY MORE EGREGIOUS, did it?

    That, Warren, is what happens when you pay too much attention to ONE side of the story without checking to see if you’re being told the whole story.

    But wait – there’s more! WHY did the bill (sponsored by Democrat John Conyers) never become law?

    This bill never became law. This bill was proposed in a previous session of Congress. Sessions of Congress last two years, and at the end of each session all proposed bills and resolutions that haven’t passed are cleared from the books. Members often reintroduce bills that did not come up for debate under a new number in the next session.

    And you’ll find out right here that the SAME bill was proposed by the SAME Democrat in 2009/2010…and it never made it out of the Democratic-controlled House.

    Next time, I recommend that you be more careful about throwing all those stones in that there glass house y’all are livin’ in….

  • Glenn Contrarian

    Oh, and Warren –

    In case you’re wondering why the Credit Card Fair Fee Act didn’t make it out of the House when it was controlled by Democrats, see here:

    Yesterday Kurt Helwig with EFTA attended the House Judiciary Committee’s hearing on H.R. 2695, The Credit Card Fair Fee Act. Among other things, H.R. 2695 would provide limited antitrust immunity to payment networks and merchants negotiating interchange rates.

    “limited antitrust immunity to payment networks and merchants negotiating interchange rates”???? Do we smell something rotten in the State of Denmark here? Maybe that’s why House Financial Services Chairman Barney Frank (D-MA) declared in March 2010 that his committee would not consider interchange in 2010.

    We Progressives hold Barney Frank to be one of the Good Guys – and the above is just another reason why.

  • http://rwno.limewebs.com Warren Beatty

    Re: comments #1 and #2, Glenn, since the 60 Minutes source quoted in my post is the one that identifies Boehner and Bachus, can we ignore what it said? After all, we KNOW that 60 Minutes has no credibility since it was compromised by Dan Rather.

    Regarding 60 Minutes as the entire source, you are incorrect. 60 Minutes was doing a piece on investigative journalist and Breitbart editor Peter Schweizer’s new book, Throw Them All Out.

    No, wait, the Schweizer book identified Bachus, so everything in the book, including the Pelosi revelations, must be true. Glenn, are you trying to have it both ways, ignoring Pelosi while hanging Bachus? Your tu quoque argument will not work here: Pelosi is the one who said she was going to drain the swamp. Can anyone say “hypocrite?” Wrong is wrong, regardless of who does it. I agree, if Boehner and Bachus are guilty, they should follow Pelosi out.

    All the Nancy Pelosi revelations came from the Schweizer book, not 60 Minutes investigations. Because 60 Minutes chose to do a piece on the book in no way affects the credibility of the book.

    And besides, just because 60 Minutes did a piece on Schweizer’s book doesn’t make the Pelosi actions untrue.

  • Glenn Contrarian

    ‘scuse you, Warren, but I am NOT trying to ignore Pelosi – remember, I said that what her husband did WAS a conflict of interest.

    YOU, however, mentioned the Republicans not at all.

    So…you call me a hypocrite for “ignoring Pelosi” which I obviously did NOT do…but you somehow forget that you DID for all intents and purposes ignore four Republicans whose transgressions were ALL worse than Pelosi’s conflict of interest. You said “if they are guilty”…so I ask you, Warren, why is it that when the evidence is given by the SAME source that your reference quoted, why is it that when it’s Pelosi, she’s guilty-and-when’s-the-hanging, but when it’s Republicans who did WORSE, it’s “well, IF they are guilty”….

    What’s really sad, Warren, is that you don’t even TRY to hold the Republicans to the same standard you expect of Democrats. Everyone here can see it, but any sense of fairness and objectivity you may have had has long since been skewed out of recognition by your apparent hatred of liberals in general and Democrats in particular.

    And before you go saying I don’t have a sense of objectivity, an hour or so ago I took up for Newt Gingrich.

    So…..when was the last time you stood up for a Democrat, even one who is as hated by Republicans as much as Gingrich is despised by Democrats?

  • Igor

    Welcome to the wonderful world of IPO!

    The fact is that it is just one of the many types of swindles and bribes that occur in business every day and which neo-republicans turn a blind eye to until some democrat gets a piece of the action.

    It’s not a partisan issue. These kind of business maneuvers should be illegal and prosecuted, regardless of who does it. That’s the only way to be a nation of laws instead of a nation of privileged people.

  • yawn

    yawn

    how do you turn profit after an investigation doesn’t lead you to the conclusion you wanted? You spend a week claiming to ‘unveil the truth’ behind ‘Pelosi’s insider trading’ on Sunday, so stay tuned to learn the shocking horrible truth as we investigate.

    All week with this stupid headline, then the 60 minutes episode finally airs with a quiet wimpered answer ‘no’ somewhere towards the end of the segment. That’s the business of news. Not news. News Business. The business part isn’t separate any more.

    And you just know the same right wing pundits are going to use the headline (minus the content) a year from now as undisputed proof of Nanci Pelosi corruption in their random conclusions. Much like they’re still clambering about Philanthropist Soros pulling all the strings. STILL!

    Coming up: “Does Nanci Pelosi eat kittens for breakfast? We reveal the truth at 10″ … in a week.

  • Clavos

    clamoring

  • jamminsue

    Why don’t members of congress, especially those on financial stuff, have the same requirements as the President, that their personal finances are managed by a trust?

  • John Lake

    Great to read an informative post!

  • Cannonshop

    #8 Who’d you trust to manage Nancy Pelosi AND John Boehner evenly, without prejudice or partisanship? An Executive that is, by definition, beholden to one party or the other? the infamously ineffective SEC? A Treasury Dept. that belongs to one party or the other depending on who’s president?

    Or an investment industry with a vested interest in influencing/controlling Congresscritters for profit?

    ANYWHERE you tried to establish a “Trust” to handle the finances of Congresscritters or their Senate co-creatures, you’re going to run into the same fundamental problem-the process is politicized before it’s even begun.

    (maybe the STATE governments from which they hail? That’s a thought…excpet that the STATES also have a vested interest in FEderal Money and Federal Law.)