Thursday, February 09, 2012

McKeon’s Stocks-- Insider Trading or Lucky Bucky?


Tuesday evening I promised you a more complete look-- and complete with charts (not my strongest suit)-- at Buck McKeon's pernicious, unethical stock trading. When have I ever not delivered? Remember, congressional approval ratings are tanking, already into the single digits, and the overwhelming mistrust of lawmakers has the public is stewing over the legality of Congressmembers to make stock trades that would put a Wall Street banker, or Martha Stewart, in jail. A recent report showed that Members of Congress have increased their own wealth by 25% in the past 2 years, despite the economic recession when average U.S. households net worth dropped by 13%. Sensing impending doom from voters in November, lawmakers entered the Stop Trading On Congressional Knowledge (STOCK) Act in both houses. It sailed through the Senate with a vote of 96-3 last week. In the House, the companion bill already has reached 282 cosponsors, but it is being blocked by Wall Street shills John Boehner, Eric Cantor, Paul Ryan, Spencer Bachus and... Buck McKeon. Why would anyone want to block a bill that bans Congress from making insider trades? I think the question answers itself.

So let's see if we can figure out what McKeon's been up to that would predict this kind of behavior. McKeon, already mired in two other finance-related scandals, is one of the shrinking minority that hasn’t cosponsored the STOCK Act. And knowing that McKeon is no stranger to using his office to enrich himself and his family, we thought it deserved further scrutiny. So DWT went on the hunt to see if McKeon’s past actions on his stock portfolio would give us an indication to his stance opposing the act.

McKeon’s financial disclosures for the past 10 years reveal interesting clues. He has been a frequent trader of stock, including multiple transactions on the same stock in the same year. He is the previous owner of common stock in about 40 companies like Countrywide (yes, really), Boeing, Nortel, and Motorola. The shear number of transactions on his financial reports give the impression of a nervous day trader who is obsessed with watching the ticker. For example, in 2006, he completed 164 stock transactions. But something caught our attention in his 2008 disclosures right before the stock crash in the Summer starting the Great Recession. McKeon dumped all of his mutual funds. Yes, everything. Gone... just in time.

Look at the following graphs based on historic performance of McKeon’s mutual funds and his financial disclosures:

McKeon owned Fidelity Advisor Diversified International A which was valued
between $15,001 and $50,000 and sold it right before it lost 50% of its value,
indicated by the arrow.

MFS Value A McKeon listed 2 separate sales transactions for $15,001 to $50,000 at the arrow shown.

American Funds Growth Fund of America F valued at $1,001 to $15,000 sold near it’s peak, before it lost 50% of its value.

McKeon’s 2009 report showed two sales transaction valued between $1,001 and $15,000 for RS Partners A at the indicator arrow.

These examples are perfect illustrations of why McKeon wouldn’t support the STOCK Act until Cantor watered it down and took out all the teeth earlier today. New revelations of continued corruption amazes even DWT. These include the now-official Ethics Committee investigation into his VIP Countrywide mortgage, which was nothing more than a bribe, according to statements made by our good buddy Darrell Issa (R-CA), funneling defense contributions to his California assembly candidate wife, overpaying family members with campaign funds for questionable services, and obvious pay-to-play tactics with the defense industry. This guy has a Club Fed cell in his future.

But, as we saw yesterday, McKeon’s Republican base is cracking with all the evidence of profiteering and double-dealing, personally and legislatively. This presents a great opportunity for Democrats to take one of the remaining districts in Los Angeles County currently represented by a Republican. California’s newly drawn 25th CD is a swing district. Obama would have carried the district in 2008 and as Whitman would have in 2010. McKeon has never met a well-funded or organized challenger until now. Dr. Lee Rogers has been endorsed by the local Democratic organizations and is expected to receive the state party endorsement this weekend. He is capitalizing on the scandals and the negativity surrounding McKeon’s decisions on some issues that directly affect the district. Locals have two blogs dedicated to the defeat of Buck McKeon and You can help support the campaign to defeat this anti-gay, anti-immigrant, pro-war, big spending, corrupt Republican here at the Blue America ActBluepage. Its a good investment in good government-- and a better investment than the one McKeon made in Countrywide.

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At 3:40 PM, Anonymous Anonymous said...

This man McKeon embodies the corruption in government we need to rid ourselves of. He must be defeated for the health of our country.

At 1:22 AM, Anonymous me said...

Off Topic:

I think I'll go shopping at Penney's. Beats the hell out of Walmart.


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