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This seems like as good a time as any to add some material to my last post on the topic (based on my current reading exercise through the works of Peter Schweizer) where I started off with:
I often throw around the “completely corrupt” theme somewhat flippantly when talking about our beltway betters and the charade they perform for us while enriching themselves. Unfortunately, as definitive as that simple phrase may be, it really does understate just how much the operations of this Potemkin constitutional republic have been distorted and bastardized into one hell of a joke on us, We the People.
(As with last time, I will note that all of the quotes to come are from a 2011 book called Throw Them All Out: How Politicians and Their Friends Get Rich Off Insider Stock Tips, Land Deals, and Cronyism That Would Send the Rest of Us to Prison so my use of it today to further my agenda may be of somewhat dated applicability. If there has been a major government reform movement since then that I have missed, please accept my apologies and disregard this entire post.)
As with another earlier post, I will try to conceal the identity of the main character until the end…just for fun. Now, imagine if you will, those ancient times around the passage of the wildly unconstitutional Obamacare bill:
… It is his buying and selling of health care stocks during the debate over health care reform that is particularly interesting. While some have reported that the [Senator X family] assets are in a blind trust, they have not been designated as such on his financial disclosure forms. …
In July 2009, industry representatives met with key members of Congress and hashed out critical details of the new Obama bill. As the bill snaked its way through the House and Senate, where [Senator X] was actively pushing it, the [X family] began buying stock in the drug maker Teva Pharmaceuticals as the prospects of its passage improved. In November alone they bought close to $750,000 in the company.
When the [X family] first began buying shares, the stock was trading at around $50. After health care passed, it surged to $62. In 2010, after the reform bill was signed, the [X family] sold some of their shares in Teva, reaping tens of thousands in capital gains. (It’s unclear exactly how much because of the way the transactions are reported. Politicians are required to report ranges only – not exact dollar amounts.) And they held on to more than $1 million worth of Teva shares. … – Pages 5-6
Just a quick pause to note how the “reporting system” was already set up to mostly shield the corrupt from any real scrutiny. In practice, things are actually much worse. Our betters habitually (intentionally) submit incomplete disclosure forms and the system seems to lack any real “controlling legal authority” (to steal a phrase) or, more specifically, any real desire to do anything about it. And don’t get me started on the complete joke we have in the House and Senate Ethics Committees. But I digress.
Anyway, now that I teased you a bit about the mystery Senator, let’s add some more meat to the story…
Along with Teva, during 2009 the [X family] also picked up shares in Res/Med – at least $200,000 worth. Res/Med makes medical devises… After health care reform passed, shares in the company surged…[to] as much as 71% higher than the [X family] paid for them. Res/Med was a winner in the health care reform legislation – as Reuters declared – thanks in part to [Senator X’s] efforts. In early versions of the health care bill, device makers like Res/Med were to be taxed through an “industry fee.” In the final bill, fees for medical device makers were delayed until 2013, and the industry tax was replaced by a smaller sales take. [Senator X] was a strong opponent of higher taxes on medical device makers. – Page 12
A similar tale can be told around the 40% increase in Thermo Fischer Scientific shares (between a $250,000 and $500,000 investment in the product and services provider to hospitals and medical centers). Of course, we are all very used to short-term returns of 40% to 71% on our six digit investments, aren’t we?
But it works in the other direction too:
While the [X family was] buying Obamacare winners, they were dumping losers. In the final bill, pharma was a winner, the health insurance industry was a big loser. Not coincidentally, the [X family] had been selling all their stock in health insurance companies. One such company, United Health, offers Medicare insurance. The legislation dictated lower reimbursement for Medicare procedures. Lifetime coverage limits and protections against preexisting medical conditions were removed – extremely popular aspect of the bill, to be sure but they squeezed United Health’s bottom line. By the end of 2009, the [X family] had sold all of their shares in United Health. They also dropped their investments in Wellpoint, another health benefits company. Six weeks later, [Senator X] introduced an amendment to tax generous health care plans, which would clearly hurt companies like those whose stock he had just sold. – Pages 12-13
The list of tales could go on and on. Even before the Obamacare rally for insiders, the X family frequently executed extremely well-timed trades. In 2007, two weeks before it was “publicly announced that Medicare would sharply limit reimbursements for treatment with Aransp,” the X family sold between $500,000 and $1,000,000 in Amgen stock (the maker of Aransp) avoiding a potential 15% loss. Even earlier, in 2003, the X family “went on a big stock-buying spree involving more than one hundred transactions over a period of several months” as “Congress was debating what would become the largest overhaul of the Medicare program in its thirty-eight-year history.” Based on the paperwork filed, the result was capital gains of between $500,000 and $1,000,000.
And this is just scratching the surface. Also, of course, one should not be fooled into thinking Senator X is unique in any way. (The corruption is total…besides, insider trading is small potatoes compared to a Secretary of State selling access and influence and more with the tacit blessing (or worse) of her boss and the media for four years. But, again, I digress.) Schweizer provided the following for more context:
A study … found that U.S. senators may have missed their calling: they should all be running hedge funds. How else to explain these results, based on 4,000 stock trades by senators:
- The average American investor underperforms the market
- The average corporate insider, trading his own company’s stock, beats the market by 7% a year.
- The average hedge fund beats the market by between 7% and 8% a year.
- The average senator beats the market by 12% a year.
– Pages xvii-xviii
And it is all done to the stunning silence of We the People and our watchdog press. Since then, things have only gotten worse…they really don’t even pretend to hide such corruption from us anymore. Remember earlier this year when the story got out that the Comrade Pelosi family had purchased between $500,000 and $1,000,000 of Tesla stock just prior to a Biden EO dictating the replacement of the rather large fleet of vehicles owned and operated by the federal government with “clean electric vehicles”? But I do suspect there are limits to this flaunting of the power…with her coming retirement, I suspect we will not get many details about what the outgoing Speaker has invested in during the run-up to this latest $Trillion-plus dump into the corruption pipeline. Expect those disclosure forms to be extremely incomplete if they are filed at all. Who is going to do anything about it anyway?
For the record, as if it matters at all, Senator X is none other than John Kerry. We are left only to ponder his surely spectacular investment performance now that he is able to mingle in the same circles of power and insider knowledge without any requirement to participate in the integrity charade half-heartedly put on by elected officials within this government of the people, by the people, for the people.
Good day.Published in