Why aren’t congressional members required to put all of their stock holdings into a blind trust?

Why can’t insider trading by Congressional members be banned?

How can elected officials do “the people’s business” when they are too busy running around trading on the votes they are about to cast?

How one earth can we ever get fair outcomes of issues involving finance, healthcare, or energy when the members so personally have a monetary stake in an outcome they may or may not be in the public interest?

Why aren’t these people in jail?

~~~

1. General Electric (GE)

Members invested: 75
Total value of holdings (max.): $11.41 million
Total value of holdings (min.): $3.58 million

Top Congressional Investors
Darrell Issa (R.-Calif.) – $1 million to $5 million
John Kerry (D.-Mass.) – $616,004 to $1.315 million
Michael McCaul (R.-Texas) – $400,003 to $850,000

2. Procter & Gamble (PG)

Members invested: 62
Total value of holdings (max.): $39.42 million
Total value of holdings (min.): $8.72 million

Top Congressional Investors
Rodney Frelinghuysen (R.-N.J.) – $7.07 million to $35.15 million
Michael McCaul (R.-Texas) – $200,002 to $500,000
James B. Renacci (R.-Ohio) – $180,485 to$222,482

3. Bank of America (BAC)

Members invested: 57
Total value of holdings (max.): $5.41 million
Total value of holdings (min.): $2.83 million

Top Congressional Investors
Rodney Frelinghuysen (R.-N.J.) – $1.02 million to $1.08 million
John M. Spratt Jr. (D.-S.C.) – $500,001 to $1 million
Dianne Feinstein (D.-Calif.) – $500,001 to $1 million

4. Microsoft (MSFT)

Members invested: 56
Total value of holdings (max.): $6.43 million
Total value of holdings (min.): $3.22 million

Top Congressional Investors
John Kerry (D.-Mass.) – $1.77 million to $2.55 million
Michael McCaul (R.-Texas) – $515,003 to $1.05 million
Jane Harman (D.-Calif.) – $130,003 to $350,000

5. Cisco Systems (CSCO)

Members invested: 56
Total value of holdings (max.): $3.24 million
Total value of holdings (min.): $1.27 million

Top Congressional Investors
John Kerry (D.-Mass.) – $602,005 to $1.28 million
Richard L Hanna (R.-N.Y.) – $100,000 to $250,000
Jane Harman (D.–Calif.) – $100,000 to $200,000

6. Pfizer (PFE)

Members invested: 51
Total value of holdings (max.): $4.61 million
Total value of holdings (min.): $2.04 million

Top Congressional Investors
John Kerry (D.-Mass.) – $752,004 to $1.53 million
F. James Sensenbrenner Jr. (R.-Wis.) – $507,005 to $1 million
Kurt Schrader (D.-Ore.) – $265,002 to $550,000

7. Intel (INTC)

Members invested: 47
Total value of holdings (max.): $3.21 million
Total value of holdings (min.): $1.28 million

Top Congressional Investors
John Kerry (D.-Mass.) – $602,005 to $1.28 million
Michael McCaul (R.-Texas) – $200,002 to $500,000
Jane Harman (D.-Calif.) – $130,003 to $350,000

8. Wells Fargo (WFC)

Members invested: 45
Total value of holdings (max.): $4.28 million
Total value of holdings (min.): $1.71 million

Top Congressional Investors
John Kerry (D.-Mass.) – $351,003 to $765,000
Sander Levin (D.-Mich.) – $250,001 to $500,000
David Vitter (R.-La.) – $126,007 to $365,000

9. AT&T (ATT)

Members invested: 44
Total value of holdings (max.): $4.08 million
Total value of holdings (min.): $2.23 million

Top Congressional Investors
John Kerry (D.-Mass.) – $1.52 million to $2.07 million
F. James Sensenbrenner Jr. (R.-Wis.) – $105,877 to $255,876
Richard L Hanna (R.-N.Y.) – $100,001 to $250,000

10. Exxon Mobil (XOM)

Members invested: 42
Total value of holdings (max.): $11.09 million
Total value of holdings (min.): $2.74 million

Top Congressional Investors
John Carter (R.-Texas) – $1 million to $5 million
F. James Sensenbrenner Jr. (R.-Wis.) – $551,185 to $1.05 million
Michael McCaul (R.-Texas) – $500,002 to $1 million

Sources: Open Secrets, CNBC,

Category: Legal, Politics, Trading

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

60 Responses to “Top Favorite Stock Holdings of Congress”

  1. budhak0n says:

    Mauris pretium quam

  2. AHodge says:

    you go man
    i am in DC poke around all the time for legal “insider” info on tradable congress actions
    but i happy to see that game lessened for little more honorable govt

  3. Jake S. says:

    Where’s the Occupy Wall Street on this? This by far more outrageous than anything else you can point to. The people in charge of legislation are invested in the companies they legislate? What the f***, pardon my french. There should be blood in the streets.

  4. blackvegetable says:

    BARRY! EDITOR – STAT!

    Why isn’t congressional members required to put their holdings into a blind trust?

    Why can’t we ban insider trading by Congress members be banned?

    How cant these elected officials do “the people’s business” when they are too busy running around trading on the votes they are about to cast?

    How one earth can we ever get fair outcomes of issues involving finance, healthcare, or energy when the members so personally have a monetary stake in an outcome they may or may not be in the public interest?

  5. beaufou says:

    1. General Electric (GE)

    Members invested: 75

    The same GE that pays no taxes?
    You just can’t make that stuff up.

  6. Invictus says:

    @beaufou

    Sometimes he’s so blind with rage that spelling and punctuation take a back seat (or get tossed out of the car altogether).
    ~~
    It is unfathomable to me that members of congress are not required to have their assets managed in blind trusts. This is a no-brainer which, frankly, I’m embarrassed to say I always simply assumed was the case. That it’s not is a national disgrace.

  7. DSS10 says:

    You should look at the senior congressional staffers trades, after all they are the ones meeting with the lobbyist on a daily basis and running the show. Most of the congressmen are empty suits any way….

    http://online.wsj.com/article/SB10001424052748703431604575522434188603198.html

  8. mathman says:

    . . . and “we” wonder why the government no longer works as designed . . .

    That does it. There’s no more reason to suspect why there are no prosecutions of financial fraud – it’s because they’re all complicit! Talk about a national disgrace! Our so-called “democracy” is a freakin’ joke – and it’s on US!

    Occupy Congress! (and i’ll bet if we look into the “just us” department we’d find similar behavior)

  9. maddog2020 says:

    Simply one of the most corrupt governments in the world.

    The problem is, there are too many believers in American exceptionalism to realize that in fact, we’re one of the worst Banana republics in the world. The True Believers are some of the most dangerous people in America today.

    I was going to write this after the Gingrich piece below. This info just continues to rub salt in the wound.

  10. Winston Munn says:

    It appears the invisible hand is connected to the arm of Congress. I don’t remember Adam explaining that part.

  11. greg says:

    Barry, if I understand your question correctly, you are suggesting that the people who make the laws, change the laws, to make what is apparently a legal activity into an illegal activity, which would severely impact their ability to make money and provide for their families. That seems somewhat harsh, especially in these difficult economic times, and frankly a little unAmerican.

    I have every confidence that they will address this, as soon as they are done with the prosecutions of those responsible for the financial crisis.

    I think we could borrow from Gil Amelio here and say, the government is a big ship with a hole in it, and the main job of Congress is to make sure everyone is rowing in the same direction. Stop worrying so much about the hole.

  12. Orange14 says:

    I know that both FDA and EPA have absolute prohibitions against any employee having direct stock holdings in the companies that the Agencies regulate. The same thing should apply to all members of Congress and their staff members.

  13. Jake S. says:

    @ Orange14 – it is absolutely shocking that this isn’t already the case.

  14. Moe says:

    Just another WTF item to add to the WTF List.

    Seriously, I am thinking of going back through all of your posts and starting a list of items that are outrage worthy – or at least defy logic.

    My only issue is that I am 46 years old and I am not sure I have the time to finish it…

  15. gman says:

    Many of those positions have been turds.
    Even w/ congress bought off many of the stock still can’t rally.

  16. Jake S. says:

    Barry – what I really want to know is whether you think there’s a solution to this widespread, cancerous corruption, or whether we should all give up and move to Scandinavia. And I am asking this seriously, what can we do?

    ~~~

    BR: National constitutional amendment to outlaw lobbying by donations and publicly fund national elections

  17. Irwin Fletcher says:

    Why aren’t they in Jail? Umm, maybe because its not illegal?
    Great post until then though.

    If you can stay with the facts and avoid emotionalism and sensationalism, this is a big one.
    Also, if you can stay non-partisan, which in the past is impossible with this viewing audience.
    Let’s be equal opportunity offenders and I am with you.
    If Salon was going to bash Bachus, then they should also go after Kerry and Pelosi, which they, of course don’t do.
    Partisan rags make me puke.
    BR, keep the arguments on the issues and off the politics and we can get somewhere.
    Kudos to the Hoover Institution dude who wrote this book by the way.

  18. Orange14 says:

    I would also add that I’m not sure that the disclosure requirements for Congressmen and Senators apply to their staff. In many cases, the staff have a much greater knowledge that could contribute to wrongful (and unethical) stock trading than the member of Congress who is rarely briefed more than one hour prior to any Congressional hearing (and often times have no clue what their staff members (both direct and on the relevant committee) are up to.

  19. NoKidding says:

    I don’t think I’ve ever agreed with Invictus before.

    Is there any way to see which reps were shorting AIG, FNMA and GM into their nationalizations? That would be interesting data.

    If it were not illegal, and it seems that it was not, why would anyone in that position not be short AIG – knowing equity was about to be wiped our by a legislated bailout agreement?

  20. Moe says:

    Maddog2020:

    Could not agree more.

    The “true believers” have always reminded me of some parents I knew growing up whose kids could do no wrong. Even if caught red-handed; the parents would claim they were “driven to it by bad influences”…

    If one truly loves their country – it should be similar to loving your kid in the respect that you should see them warts and all. Recognize/verbalize the faults and seek to correct them. NOBODY is served hiding from the truth behind jingoist slogans.

  21. rootless says:

    Why aren’t these people in jail?

    Should these people be put in jail? Answering this question with “Yes” would mean favoring the abandonment of the rule of law.

  22. AtlasRocked says:

    Write your congressmen. I’m actually encouraging them to ban ALL outside income while they are in congress and for 10 years after. All their wealth needs to be in a blind trust the day after they are elected, and all income is illegal during and for 10 years after service. The bar for violation should be set low – if ANY income was received during and 10 years after – you’re jailed for 2 years and charged with a felony offense.

    Make that apply to all their FAMILY income : spouses, kids, parents. If they don’t want to comply, don’t run for office. The payola has to end.

  23. Moe says:

    “Not illegal”…”rule of law”…give me a freakin’ break.

    What are you zombies???

    There was a time when slavery was “not illegal”, but we “grew up” and made it so.

  24. Moe says:

    “Not illegal”…”rule of law”…give me a freakin’ break.

    What are you zombies???

    There was a time when slavery was “not illegal”, but we “grew up” and made it so.

  25. Jake S. says:

    “Write your congressmen”??!! That’s a joke, right?

  26. Lord says:

    Because the Senate is the 1%?

  27. ironman says:

    Something to keep in mind: it’s not just elected officials who are benefiting from Congress’ exemption from insider trading laws – the approximately 21-22,000 people who work for the U.S. Congress are also exempt from these laws, whether they work directly for elected officials as members of their staffs or for the various committees that have been established. If you’re serious about looking for corruption, there’s a real good place to start.

    BR wrote about how to deal with it:

    National constitutional amendment to outlaw lobbying by donations and publicly fund national elections

    Because the crooks who can decide how much the public will fund their elections won’t abuse that power? I don’t think you’ve fully thought that one through….

    Here’s a better idea: Apply a 50% surtax on all income earned by elected officials and non-military government employees in excess of their average annual government wages and salaries, both while they’re employed by the federal government and for the rest of their lives.

  28. rootless says:

    If one truly loves their country

    And if I don’t? Why would I love a country? Any country? This concept is totally alien to me. I love people to whom I have a personal relationship, but not a country or millions of strangers just because they live in the same country.

    As for the rule of law. The question was why those congress people weren’t in jail. Today. The question was not whether the law should be changed to outlaw certain activities to create a legal frame work that makes it possible w/o violating the rule of law to penalize a congress member for engaging in the kind of activities mentioned in the posting.

  29. A says:

    When Nancy “Plastic” Pelosi responded to Steve Kroft’s questions on 60 minutes, what she was really trying to explain is: “You don’t understand, I did nothing wrong. I am rich, powerful, and connected. The rules don’t apply to the powerful. Case closed.”

    We’re not certain whether she really had plastic surgery, but we’d have to be respectful of the surgeon’s skills given how little he’d have to work with.

  30. brianlane8 says:

    Just to offer a little perspective on the blind rage that is running rampant on this post (disclaimer: I in no way disagree with Barry in that I fully believe Congressmen should be required to have money in a blind trust)

    But I’m a little surprised that you posted it. These statistic are simply reactionary, and not the full picture. The information on Congressional holdings only has merit if you can see the trade information. Every company shown is a large cap stock. They are from a variety of sectors. Though I’m out of the business, I wouldn’t be surprised if every one of these stocks were in a Merrill/Edward Jones/Citi/LPL/Whoever managed account. Exxon, GE, PG, PFE, BAC, etc…. Don’t get mad at the holdings. Get mad at the trade dates (which, btw, federal employees are required to disclose) IF and only IF they are dubious, which I’m sure that some, but not all, are.

  31. blackvegetable says:

    “Partisan rags make me puke.
    BR, keep the arguments on the issues and off the politics and we can get somewhere.
    Kudos to the Hoover Institution dude who wrote this book by the way.”

    Though I agree that pulling the curtain aside on this cesspool is a public service, I think it worth noting that Schweizer earned his way onto the Hoover teat by penning a tribute to one of the great boondoggles of all time (the Reagan Pentagon Spending Orgy), and crafting speeches for the Poster Child of Crony Capitalism before taking a gig with Sraha Palin….

  32. Bill Wilson says:

    It’s amazing how little coverage this story gets. I don’t think it was very hard at all for 60 minutes to dig up some dirt. It would be nice if local news organizations would do this kind of investigation of their local congressman.

  33. blackvegetable says:

    “Sraha Palin”

    clearly I’m not immune to that blind rage thingy

  34. MayorQuimby says:

    My comment:

    RDRRRRRDDDRDDRDDRDDRDDDRDRRRR

  35. BusSchDean says:

    The Invisible Hand is supposed to be directed by buyers in the market place…not by gov’t or by sellers. Otherwise, what’s the point?

  36. Moe says:

    Rootless:

    I actually agree with you – loving a country is a foreign concept to me as well. It was thrown at me so
    many times I wanted to puke (especially around the Iraq invasion period). What I wrote above was my typical response back to that accusation. I’ve hated jingoist tendencies in any form.

    As far as legality. Again, I guess I have grown tired of the justifications for all the rape and pillaging going on. We see it again with Penn State. They “did nothing wrong” within the laws of Pennsylvania – but c’mon!!!!!!

    Have a good one!

  37. rootless says:

    @brianlane8:

    Thank you for contributing to this thread with some rationality.

  38. formerlawyer says:

    To my recollection, even Supreme Court Justices are not required to place their investments in a blind trust.

    http://blogs.findlaw.com/courtside/2009/05/supreme-court-nominees-could-face-tough-decisions-about-stocks.html

  39. rootless says:

    @Moe:

    Whatever the excuse is with which they came up to defend their actions they still violated certain rules they have had at the university, didn’t they?

    I grew up in a country where the rule of law wasn’t in such a high standing. It’s a matter of civility of a society, and this principle should be defended, even if the popular outrage about something that is not illegal, appears to be morally correct.

  40. [...] What are Congress’ favorite stocks?  (Big Picture) [...]

  41. A7L-B says:

    The rules pertaining to Congressional member investing are unchanged;
    why the uproar now?

    Why not during the bull market?
    Social mood?

    The market bottom may occur near when some token ‘staffer’ prosecutions occur…

  42. messy12 says:

    How about we require ALL members of Congress to invest ONLY in US Treasuries?

  43. maddog2020 says:

    >brianlane8 Says:
    >November 16th, 2011 at 12:14 pm

    >Just to offer a little perspective on the blind rage that is running rampant on this post (disclaimer: I in no way >disagree with Barry in that I fully believe Congressmen should be required to have money in a blind trust)

    >But I’m a little surprised that you posted it. These statistic are simply reactionary, and not the full picture. The information on Congressional holdings only has merit if you can see the trade information.
    —–
    brianlane – I understand your point, but I don’t think it’s blind rage. It’s not much, but they are clearly gaining an advantage.

    http://www.minyanville.com/dailyfeed/2011/05/25/shocker-legislators-investments-generating-abnormal/

  44. willid3 says:

    and we wonder why the corporations have taken over. all the while we are told that they are the job creators and if we just give them every thing they will do some job creation.
    so far hasn’t worked out well. in the US
    has worked out great for other countries

  45. EdDunkle says:

    Ian Master’s interview with a guy who studies congressional stock trading:
    http://ianmasters.com/sites/default/files/mp3/bbriefing_2011_11_15b_alan%20ziobrowski.mp3

    The upshot: the average US senator beats the market by 12% per year.

  46. roxy says:

    Darrel Issa is well known to profit from his legislation there have been several articles written about it in the last few months. Also, let’s not forget that Dick Cheney always said his assets were in a blind trust but look how that turned out for Halliburton. I guess the blinders had a peep hole……

  47. Paddy Megroyn says:

    Incredible that John Kerry didn’t end up as President in ’04, he’s got his fingers in a lot of pies.

  48. TraderMark says:

    To your last questions : because they make the rules.

  49. Al V says:

    Dear Barry Ritholtz,
    Do you think it might be a good idea to proof read what you write before you submit it? Please look at your first few sentences. However, the statistics were interesting.
    Al

    ~~~

    BR: Ouch! That was some serious grammar errata there. (I shouldn’t type while furious!)
    I’ll fix above

  50. leveut says:

    “Why can’t insider trading by Congressional members be banned?”

    Congress must write and pass the statute.

    Samuel Clemens: Congress. America’s only natural criminal class.

  51. victor says:

    1) I wonder what their average costs are on their holdings,

    2) how long before members of Congress and their staff get stock options exercisable say at any time during and after their terms? and

    3) Suppose you were an idiot. And suppose you were a member of Congress. But I repeat myself.
    - Mark Twain, a Biography

  52. hdoggy says:

    The funny thing is that Ben Bernanke is a saint compared to these guys. It’s pretty bad if the Fed even knows how to limit conflicts of interests when congress doesn’t (I realize Dudley’s actions contradict this assertion, but his actions were at lease reviewed by his employer and there seem to still be more rules at the Fed then in Congress).

    http://portfolioist.com/2010/08/05/investing-lessons-from-ben-bernanke/

  53. hdoggy says:

    Just to add.

    Evan Henry Paulson had to sell his investments to become Treasury secretary. The funny thing is that timely sale saved his 500MM from going down the drain.

  54. wally says:

    Maybe somebody should regularly total this up and publish the results just as if it were a mutual fund.

    Vanguard, Fidelity, Congress… who’d put out the best numbers?

  55. brianlane8 says:

    “brianlane – I understand your point, but I don’t think it’s blind rage. It’s not much, but they are clearly gaining an advantage.”

    Yes. I absolutely agree. HOWEVER; I feel that the number shown in this post by Barry are misleading. For example, look at the PG holdings: 62 owners. Max value: $39 mil, min value: $8.7 mil (approx) Largest holding: $35 – 7 million…. this clearly slants the numbers. I’d be curious as to if that larger position has been owned for a long term period of time. Was it bought before the member’s tenure? Is the member a former PG executive? Etc. etc. etc….

    I am in no way disagreeing that 1) a fair number of Congressmen are corrupt and guilty of insider trading abuses. 2) They are non-apologetic about it. 3) a lot of other arguments that come up in the comments. Instead, I am simply trying to avoid a similar mentality that a lot of people have regarding “anyone involved in finance, banking, investments, etc. is inherently evil.”

    Just because someone holds a stock, does not mean the trade was corrupt. I know plenty of families who have passed down Exxon, Ford, GE, etc etc etc for generations. Therefore, I find it more appropriate to look at timing of trades than to look at stock holdings.

    A simple way to solve this problem would be (in addition to the blind trust option) to hold politicians to the same standards as, say, professionals at auditing firms (Grant Thornton, KPMG, RSM Macgladry, etc) who are restricted from holding securities in any company with which the firm has a relationship with. This avoids conflict of interests quite well. As a former private wealth manager, I had to monitor holdings of multiple clients and their family members (at minimum quarterly and, quite often, monthly) to make sure there was no conflict. One of my clients was a Grant Thornton principal (which audited MSCI) and since we were ETF sector players, we used the MSCI indices ETF’s quite often. I had to retroactively cancel a few trades (at my own expense) to erase any of his ownership for any period of time. If an accounting firm has to follow rules like this, why doesn’t congress.

  56. [...] Congress’s 10 favorite stocks, and which members hold the most (it’s mostly Kerry) — Ritholtz [...]

  57. EV Libertarian says:

    The 3 branches of government are theoretically for checks and balances.

    If this is true, perhaps it is grounds for a Class Action Law Suit: US Tax Payers vs. Select Members of Congress.

    For having conflicts of interest and acting in their own interest at the expense of tax payers.

    In the mean time, if you can’t beat them, join them, these 10 stocks are likely to outperform the market.

  58. wwhiteside says:

    Yes, this is corruption of gevernment. We are all guilty for allowing it and lobbying to continue almost unabated. It is my opinion that those in high office have always been expected to adhere to an even higher standard or ethics by virtue of their offices. It lieu of this, penalities really severe could help. A minimum jail term of 10 years without parole should be a good starting point with the death penalty for anything that involves citizen loss of life. Oridinary citizens suffer when their so-called servents are too busy serving themselves (and corporate contributors) instead of doing the people’s business. What ever happened to muckrackers or tar and feathers? Doesn’t anyone get irate from this stuff? Thank God for 60 Minutes and that level of investigative journalism. As an older guy I see technology advancing and our societal values headed in reverse at an alarming rate. Examples should and must be made of all in Congress who are involved in corruption (in my view). Maybe mass trials of them and financial heads ( who made profit from our current economic woes)would be a good start point to restore our country. We’ll need a US attorney general who is a patriot, loves his country and has courage. Where is that man? I also support the Congressional Stock Bill that at last report had a growing number of co-sponsors. Geez, I wonder why ?

  59. [...] And then I ran across this: Read the Big Picture [...]