Why Do GOP Criminals Spencer Bachus And Buck McKeon Still Have Their Committee Chairs?

Boehner (r) with Ethics Committee miscreants McKeon & Bachus

Many people recall the pre-ethics circus Hastert and DeLay ran when they controlled the House. It was a free-for-all that featured a series of scandals involving corrupt Republican congressmen and lobbyists, some of whom got away with it-- like Jerry Lewis (R-CA), Ken Calvert (R-CA), and Duncan Hunter (R-CA)-- some of whom were defeated at the polls or pressured out of Congress-- like John Doolittle (R-CA), Tom Feeney (R-FL), Rick Renzi (R-AZ), Dick Pombo (R-CA)-- and a precious few of whom went to prison, namely Duke Cunningham (R-CA) and Bob Ney (R-OH)... not to mention Jack Abramoff. Nancy Pelosi was propelled into the Speakership, moved quickly to institute serious ethics reforms (watered down-- as all progressive reforms are watered down-- by the whining and carping of Blue Dogs), and actually got tough with Democrats who thought they could emulate Republicans.

In 2010 the GOP took over again, with one of the most outrageously corrupt Republicans in contemporary history, John Boehner, in charge. Boehner vowed a get tough policy on corruption inside his caucus. All talk-- and the Republican House caucus is as riven with corruption as it was when DeLay was running the show. Boehner has failed miserably when it comes to removing his top lieutenants from positions of power when they're caught red-handed with-- as Rev. Al puts it-- with the blueberry smeared all over their faces. Last week the House Ethics Committee officially opened an investigation into the corrupt behavior of House Armed Services Chairman, Buck McKeon. He took a massive bribe from Countrywide, engages in insider trading and extorts money out of defense contractors and weapons manufacturers by funneling large sums through his wife's state Assembly campaign. But Boehner hasn't seen fit to make him step down from the armed Services perch from which he is running his criminal operations.

Yesterday it was announced another grievously and notoriously corrupt Republican chairman, Spencer Bachus (R-AL) of the House Financial Services Committee is, like McKeon, under formal investigation by the House Ethics Committee. And, like McKeon, Boehner is letting him keep his gavel. Remember how fast Pelosi took Charlie Rangel's away, even when his accusations weren't nearly as serious as the ones against McKeon and Bachus? Bachus was buying and selling stock options based on non-public insider information "while overseeing the nation’s banking and financial services industries."

The Office of Congressional Ethics, an independent investigative agency, opened its probe late last year after focusing on numerous suspicious trades on Bachus’s annual financial disclosure forms, the individuals said. OCE investigators have notified Bachus that he is under investigation and that they have found probable cause to believe insider-trading violations have occurred.

The case is the first of its kind involving a member of Congress. It comes at a time of intense public scrutiny of congressional ethics, with the House passing legislation Thursday to tighten rules against insider trading by lawmakers. The impetus for the legislation, a version of which passed in the Senate a week earlier, came from a “60 Minutes” report and a book mentioning Bachus’s trades, Throw Them All Out, by Peter Schweizer.

...In recent years, Bachus has made numerous trades, some of them coinciding with major policy announcements by the federal government and industries under his congressional oversight, according to a review of his financial disclosure forms by the Washington Post.

Most of his investments are for less than $10,000, and almost all involve options rather than stock purchases. The options allowed Bachus to buy or sell stocks at certain prices in the future-- betting that the value of those stocks will rise or fall.

A Fidelity brokerage statement Bachus submitted for 2008 shows that he made $30,474 in short-term investments, many of them bought and sold in a matter of days, sometimes during the same day.

The former member of the House Transportation and Infrastructure Committee made several options bets on railroads. While President George W. Bush’s fiscal stimulus bill was being crafted in summer 2008, Bachus bet that the stock of Burlington Northern Railroad would rise, and he cashed out that July for a $16,588 profit. In August, he made the same bet but lost $2,900.

On Sept. 18, 2008, at the height of the economic meltdown, Bachus participated in a closed-door briefing with then-Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben S. Bernanke. At the time, he was the highest-ranking Republican member of the Financial Services Committee. According to a book Paulson would later write, the topic of the meeting was the high likelihood of decline across the entire economy if drastic steps were not taken.

The next day, Sept. 19, Bachus traded “short” options, betting on a broad decline in the nation’s financial markets, and collected a profit of $5,715. Also that day, he cashed out options in which he had bet that General Electric stock would rise, and collected a $12,713 profit, before GE’s stock price started to tumble, the Post found.

Bachus-- and McKeon-- worked with Eric Cantor this week to water down the STOCK Act meant to prevent abuses. Instead it now protects some of the worst types of abuses. After it passed Thursday, McKeon was quick out of the box to claim credit for a major reform (having joined every Member of Congress but two to vote for the now nearly worthless bill). Lee Rogers, the reform-minded progressive challenging McKeon for the new 25th CD, saw right through his ploy. Here's what he told voters in Simi Valley, Santa Clarita and the Antelope Valley district yesterday:

Today a weakened version of the Stop Trading On Congressional Knowledge (STOCK) Act passed the House of Representatives, despite the 93 to 6 vote on the stronger STOCK Act in the Senate. Senator Charles Grassley (R-IA) was highly critical of the House version calling it “astonishing and extremely disappointing.”

The House version makes trading by lawmakers and key staffers subject to the same rules that affect everyone else. But unlike the Senate bill, it does not make transparent the process of trading on “political intelligence”, which is information from the government officials leaked to the traders which can affect the market. The Senate bill called for these intelligence gatherers to register like lobbyists before they can talk to government officials so that the public is aware of who they are and what information they are obtaining. The House leadership also removed a provision that cracks down on officials guilty of taking actions on the job to benefit themselves.

Before the changes, the House version had 300 co-sponsors, a passable majority, but the Republican leadership acted alone to block voting on the bill and amend it to remove the Senate provisions.

Representative Howard “Buck” McKeon, in a House leadership position, did not co- sponsor the stronger STOCK Act, which received support from a bipartisan group of 300 lawmakers, but supported the weaker version which passed. Today an online blog, Down With Tyranny, raised questions about past stock trades by McKeon. They highlighted 4 mutual funds that McKeon sold in 2008, two valued between $15,000 and $50,000 and 2 valued between $1,001 and $15,000. The funds had a sharp decline immediately after McKeon sold them and eventually lost 50% of their values.

McKeon stated today in a press release, “The American people have grown weary of Washington because they have come to believe that Washington operates on a different set of rules than those of American families and businesses.” McKeon’s own actions have helped to solidify this mistrust in Washington. He obtained a VIP mortgage from Countrywide. He uses his campaign funds to enrich his family members. He uses his defense industry connections to fill the coffers of his wife’s campaign and now he seems to have benefited from “perfect timing” when selling his stocks.

If you'd like to help Lee Rogers clean up Congress by replacing McKeon-- Alabamaians have no such option when it comes to Bachus, it being a one-party state with corruption thoroughly enshrined in the political culture-- you can contribute at the Blue America ActBlue page here.