Please don’t get the impression that Rep. Spencer Baucus was the only member of Congress who attended closed-door sessions about the 2008 economic crisis, then called his broker. In another part of Peter Schweizer’s book, he checks the schedules of other attendees at a September 16, 2008 meeting with Hank Paulson and Ben Bernanke. It’s a pure mixture of Democrats and Republicans.
“September 17, 2008, was by far [Rep. Jim] Moran’s most active trading day of the year,” writes Schweitzer. “He dumped shares in Goldman Sachs, General Dynamics, Franklin Resources, Flowserve Corporation, Ecolabs, Edison International, Electronic Arts, DirecTV, Conoco, Procter & Gamble, AT&T, Apple, CVS, Cisco, Chubb, and a dozen more companies.” Schweitzer actually counts ninety companies that Moran dumped, helping him avoid big losses.
Also at the meeting: Rep. Shelley Capito. “She and her husband dumped between $100,000 and $250,000 in Citigroup stock the day after the briefing,” reports Schweitzer. And then there was Dick Durbin, then and now the assistant majority leader of the Senate. “He sold off $73,715 in stock funds” after the September 16 briefing. “Following the next terrifying closed-door briefing, on September 18, he dumped another $42,000 in stock.”
UPDATE: Durbin’s spokesman Max Gleischman douses this with some cold, Brita-filtered water.
In each trade made in September of 2008, Senator Durbin was part of a bearish market of historic proportions. Senator Durbin had no insider knowledge and his actions we in response to the massive selloff brought on by events which were widely reported. With one exception, Senator Durbin was selling assets – making sales on the 8th, 16th, 17th, 19th and 29th of September.
The quarter ending September 30, 2008 was the third largest in New York Stock Exchange history by trading volume. The information leading to Senator Durbin’s trades was clearly well known to the public and not based on insider information.
The thing about Schweizer’s book is that he never says this behavior is illegal. Only that it’s not something you want on the minds of legislators.