1. Congress: Trading stock on inside information?
Watch the Segment »
Steve Kroft reports that members of Congress can legally trade stock based on non-public information from Capitol Hill.
(CBS News) Washington, D.C. is a town that runs on inside information - but should our elected officials be able to use that information to pad their own pockets? As Steve Kroft reports, members of Congress and their aides have regular access to powerful political intelligence, and many have made well-timed stock market trades in the very industries they regulate. For now, the practice is perfectly legal, but some say it's time for the law to change.
The following is a script of "Insiders" which aired on Nov. 13, 2011. Steve Kroft is correspondent, Ira Rosen and Gabrielle Schonder, producers.
The next national election is now less than a year away and congressmen and senators are expending much of their time and their energy raising the millions of dollars in campaign funds they'll need just to hold onto a job that pays $174,000 a year.
Few of them are doing it for the salary and all of them will say they are doing it to serve the public. But there are other benefits: Power, prestige, and the opportunity to become a Washington insider with access to information and connections that no one else has, in an environment of privilege where rules that govern the rest of the country, don't always apply to them.
Questioning Pelosi: Steve Kroft heads to D.C.
When Nancy Pelosi, John Boehner, and other lawmakers wouldn't answer Steve Kroft's questions, he headed to Washington to get some answers about their stock trades.
Most former congressmen and senators manage to leave Washington - if they ever leave Washington - with more money in their pockets than they had when they arrived, and as you are about to see, the biggest challenge is often avoiding temptation.
Peter Schweizer: This is a venture opportunity. This is an opportunity to leverage your position in public service and use that position to enrich yourself, your friends, and your family.
Peter Schweizer is a fellow at the Hoover Institution, a conservative think tank at Stanford University. A year ago he began working on a book about soft corruption in Washington with a team of eight student researchers, who reviewed financial disclosure records. It became a jumping off point for our own story, and we have independently verified the material we've used.
Schweizer says he wanted to know why some congressmen and senators managed to accumulate significant wealth beyond their salaries, and proved particularly adept at buying and selling stocks.
Schweizer: There are all sorts of forms of honest grafts that congressmen engage in that allow them to become very, very wealthy. So it's not illegal, but I think it's highly unethical, I think it's highly offensive, and wrong.
Steve Kroft: What do you mean honest graft?
Schweizer: For example insider trading on the stock market. If you are a member of Congress, those laws are deemed not to apply.
Kroft: So congressman get a pass on insider trading?
Schweizer: They do. The fact is, if you sit on a healthcare committee and you know that Medicare, for example, is-- is considering not reimbursing for a certain drug that's market moving information. And if you can trade stock on-- off of that information and do so legally, that's a great profit making opportunity. And that sort of behavior goes on.
Kroft: Why does Congress get a pass on this?
Schweizer: It's really the way the rules have been defined. And the people who make the rules are the political class in Washington. And they've conveniently written them in such a way that they don't apply to themselves.
The buying and selling of stock by corporate insiders who have access to non-public information that could affect the stock price can be a criminal offense, just ask hedge fund manager Raj Rajaratnam who recently got 11 years in prison for doing it. But, congressional lawmakers have no corporate responsibilities and have long been considered exempt from insider trading laws, even though they have daily access to non-public information and plenty of opportunities to trade on it.
Schweizer: We know that during the healthcare debate people were trading healthcare stocks. We know that during the financial crisis of 2008 they were getting out of the market before the rest of America really knew what was going on.
In mid September 2008 with the Dow Jones Industrial average still above ten thousand, Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke were holding closed door briefings with congressional leaders, and privately warning them that a global financial meltdown could occur within a few days. One of those attending was Alabama Representative Spencer Bachus, then the ranking Republican member on the House Financial Services Committee and now its chairman.
Schweizer: These meetings were so sensitive-- that they would actually confiscate cell phones and Blackberries going into those meetings. What we know is that those meetings were held one day and literally the next day Congressman Bachus would engage in buying stock options based on apocalyptic briefings he had the day before from the Fed chairman and treasury secretary. I mean, talk about a stock tip.
While Congressman Bachus was publicly trying to keep the economy from cratering, he was privately betting that it would, buying option funds that would go up in value if the market went down. He would make a variety of trades and profited at a time when most Americans were losing their shirts.
Congressman Bachus declined to talk to us, so we went to his office and ran into his Press Secretary Tim Johnson
"Nobody would talk to us." That's what 60 Minutes correspondent Steve Kroft says happened when he tried to get members of Congress to talk about "insider trading" on Capitol Hill.
It turns out that it is not illegal for member of Congress to make stock trades using inside information they learn while working on legislation, and Steve had some questions about some specific stock trades.
Since nobody involved would give him an interview, Steve had to find other ways to get some answers. As you'll see on Overtime this week, Steve looked for some lawmakers at their homes, attempted to track others down in their offices, and finally ended up asking questions at press conferences held by Nancy Pelosi and John Boehner.
"You don't like to do that stuff," Kroft tells Overtime producer David Rubin. "But on the other hand, if they don't want to talk to you and they don't want to give you an interview, and they are in powerful positions and play a prominent role in the story that you're doing, then you feel like sometimes you've got to do it."
Source:http://www.cbsnews.com/
Top 3 T.V. News Stories
1) GOP candidates tackled the foreign policy and other important ins sues at the Republican debate held last night. This would turn out to be a test for the republican presidential candidates which has been under fire lately. Bringing a lot of negative publicity to the party. The candidates saved most of their punches for the Obama administration. The issues were complex and the mood very serious. When candidates had the opportunity to ridicule an opponent, the opportunity went unused for the most part.
2) A lot of attention is being given to the newly elected Mayor of Holyoke Mass. Alex Morse is 22 years of age and has been involved in politics starting at age 11. Morse beat out the 67 year old incumbent in Tuesdays non partisan election. Morse did not see his age as being a negative, in fact he saw his youth as a positive asset. The city is home to about 40,000 people of which 48% are Latino. Morse speaks fluent Spanish, and went door to door to talk to the public about issues he thought was important to them.
3)A detainee of the Bagram air Force base detention prison, spoke with reports after hie release after one year. He did not want his identity known. He said there were problem with his neighbors and someone turned him into the military for helping the Taliban. He said it was false, he would never helped those terrible people. He said I love my country, and they destroyed it. He said the cell was 35 square feet, and they could not see the outside world. While he says he was never physically harmed, he was woken at all times of the night to be interrogated. He did not have an attorney and did not get the exercise needed. The prison is about 1 hour out of Kabut, Afghanistan. It hold 3,000 detainees. This is 18 times as many detainees that were held at Guantanamo Bay, Cuba.
Source: CBS Evening News
The following is a script of "Insiders" which aired on Nov. 13, 2011. Steve Kroft is correspondent, Ira Rosen and Gabrielle Schonder, producers.
The next national election is now less than a year away and congressmen and senators are expending much of their time and their energy raising the millions of dollars in campaign funds they'll need just to hold onto a job that pays $174,000 a year.
Few of them are doing it for the salary and all of them will say they are doing it to serve the public. But there are other benefits: Power, prestige, and the opportunity to become a Washington insider with access to information and connections that no one else has, in an environment of privilege where rules that govern the rest of the country, don't always apply to them.
Questioning Pelosi: Steve Kroft heads to D.C.
When Nancy Pelosi, John Boehner, and other lawmakers wouldn't answer Steve Kroft's questions, he headed to Washington to get some answers about their stock trades.
Most former congressmen and senators manage to leave Washington - if they ever leave Washington - with more money in their pockets than they had when they arrived, and as you are about to see, the biggest challenge is often avoiding temptation.
Peter Schweizer: This is a venture opportunity. This is an opportunity to leverage your position in public service and use that position to enrich yourself, your friends, and your family.
Peter Schweizer is a fellow at the Hoover Institution, a conservative think tank at Stanford University. A year ago he began working on a book about soft corruption in Washington with a team of eight student researchers, who reviewed financial disclosure records. It became a jumping off point for our own story, and we have independently verified the material we've used.
Schweizer says he wanted to know why some congressmen and senators managed to accumulate significant wealth beyond their salaries, and proved particularly adept at buying and selling stocks.
Schweizer: There are all sorts of forms of honest grafts that congressmen engage in that allow them to become very, very wealthy. So it's not illegal, but I think it's highly unethical, I think it's highly offensive, and wrong.
Steve Kroft: What do you mean honest graft?
Schweizer: For example insider trading on the stock market. If you are a member of Congress, those laws are deemed not to apply.
Kroft: So congressman get a pass on insider trading?
Schweizer: They do. The fact is, if you sit on a healthcare committee and you know that Medicare, for example, is-- is considering not reimbursing for a certain drug that's market moving information. And if you can trade stock on-- off of that information and do so legally, that's a great profit making opportunity. And that sort of behavior goes on.
Kroft: Why does Congress get a pass on this?
Schweizer: It's really the way the rules have been defined. And the people who make the rules are the political class in Washington. And they've conveniently written them in such a way that they don't apply to themselves.
The buying and selling of stock by corporate insiders who have access to non-public information that could affect the stock price can be a criminal offense, just ask hedge fund manager Raj Rajaratnam who recently got 11 years in prison for doing it. But, congressional lawmakers have no corporate responsibilities and have long been considered exempt from insider trading laws, even though they have daily access to non-public information and plenty of opportunities to trade on it.
Schweizer: We know that during the healthcare debate people were trading healthcare stocks. We know that during the financial crisis of 2008 they were getting out of the market before the rest of America really knew what was going on.
In mid September 2008 with the Dow Jones Industrial average still above ten thousand, Treasury Secretary Hank Paulson and Federal Reserve Chairman Ben Bernanke were holding closed door briefings with congressional leaders, and privately warning them that a global financial meltdown could occur within a few days. One of those attending was Alabama Representative Spencer Bachus, then the ranking Republican member on the House Financial Services Committee and now its chairman.
Schweizer: These meetings were so sensitive-- that they would actually confiscate cell phones and Blackberries going into those meetings. What we know is that those meetings were held one day and literally the next day Congressman Bachus would engage in buying stock options based on apocalyptic briefings he had the day before from the Fed chairman and treasury secretary. I mean, talk about a stock tip.
While Congressman Bachus was publicly trying to keep the economy from cratering, he was privately betting that it would, buying option funds that would go up in value if the market went down. He would make a variety of trades and profited at a time when most Americans were losing their shirts.
Congressman Bachus declined to talk to us, so we went to his office and ran into his Press Secretary Tim Johnson
November 14, 2011 8:31 AM
- Text
2. Penn State president explains McQueary status
The Penn State Scandal
- Mandatory abuse reporting law needed nationwide?
- Sandusky bail judge has ties to Second Mile
- Alleged Sandusky victims prepare civil suits
- Penn State president explains McQueary status
- Sandusky was "creepy," says ex-foundation kid
- Complete Coverage »
Penn State assistant coach Mike McQueary is shown on the sidelines in the second half of an NCAA college football game against Michigan, in Ann Arbor, Mich., on Oct. 24, 2009. (AP Photo/Tony Ding, File)
(CBS News) Penn State president Rodney Erickson says Mike McQueary, an assistant coach now on administrative leave who was a graduate assistant when he allegedly witnessed sex abuse at the school in 2002, wasn't fired last week because "legal issues" are in play.
McQueary allegedly saw retired Penn State defensive coordinator Jerry Sandusky sexually assaulting a child in the shower in a school locker room.
Sandusky is accused of assaulting eight boys over 15 years, and denies the charges.
Complete coverage: The Penn State Scandal
When asked why Joe Paterno, the iconic Penn State head football coach was fired and not McQueary, Erickson said McQueary's situation was "different." He said, "The board, last Wednesday night, felt that they had to take decisive action, and they did."
"Early Show" co-anchor Jeff Glor asked, "Why was it a different situation, though, if both had information that potentially could have stopped this earlier? Why was one put on administrative leave and one just removed from the position?"
"All I can say at this point is that there are legal issues that are involved," Erickson said.
Glor noted there are three investigations being conducted.Erickson said he hopes to see them completed as soon as possible, so the school can "take whatever corrective actions may be recommended as a result of those investigations."
As for the school, Erickson said "there's ... been the start of a healing process."
When asked if the focus has been too much about the football program and Paterno -- and not on the victims -- Erickson said, "I would certainly hope that the bulk of the focus is on the victims, because there's been so much sadness here at the university over the course of the last week, so much emotion that has been directed toward the victims. Our hearts go out to them."
Just after the announcement that Paterno had been fired amid the scandal, disturbances broke out in State College, Pa., where the school is located.
However, Erickson said students have shown sensitivity toward the victims.
He said, "The fact that our students organized a candlelight vigil to support the victims of child sexual abuse, where 10,000, mostly students, showed up, I think was an excellent example of the real character of Penn State and Penn State students. I think the game that was played on Saturday (Penn State Losta, 17-14 to Nebraska in Penn State's last home game of the season) with the student athletes at the center of the field, kneeling in prayer and reflection and certainly support for the victims of sexual abuse, spoke wonders about the character of all of our students, our fans, and the entire group of 108,000 that were there that day."
McQueary allegedly saw retired Penn State defensive coordinator Jerry Sandusky sexually assaulting a child in the shower in a school locker room.
Sandusky is accused of assaulting eight boys over 15 years, and denies the charges.
Complete coverage: The Penn State Scandal
When asked why Joe Paterno, the iconic Penn State head football coach was fired and not McQueary, Erickson said McQueary's situation was "different." He said, "The board, last Wednesday night, felt that they had to take decisive action, and they did."
"Early Show" co-anchor Jeff Glor asked, "Why was it a different situation, though, if both had information that potentially could have stopped this earlier? Why was one put on administrative leave and one just removed from the position?"
"All I can say at this point is that there are legal issues that are involved," Erickson said.
Glor noted there are three investigations being conducted.Erickson said he hopes to see them completed as soon as possible, so the school can "take whatever corrective actions may be recommended as a result of those investigations."
As for the school, Erickson said "there's ... been the start of a healing process."
When asked if the focus has been too much about the football program and Paterno -- and not on the victims -- Erickson said, "I would certainly hope that the bulk of the focus is on the victims, because there's been so much sadness here at the university over the course of the last week, so much emotion that has been directed toward the victims. Our hearts go out to them."
Just after the announcement that Paterno had been fired amid the scandal, disturbances broke out in State College, Pa., where the school is located.
However, Erickson said students have shown sensitivity toward the victims.
He said, "The fact that our students organized a candlelight vigil to support the victims of child sexual abuse, where 10,000, mostly students, showed up, I think was an excellent example of the real character of Penn State and Penn State students. I think the game that was played on Saturday (Penn State Losta, 17-14 to Nebraska in Penn State's last home game of the season) with the student athletes at the center of the field, kneeling in prayer and reflection and certainly support for the victims of sexual abuse, spoke wonders about the character of all of our students, our fans, and the entire group of 108,000 that were there that day."
November 13, 2011 6:46 PM
- Text
3. Questioning Pelosi: Steve Kroft heads to D.C.
It turns out that it is not illegal for member of Congress to make stock trades using inside information they learn while working on legislation, and Steve had some questions about some specific stock trades.
Since nobody involved would give him an interview, Steve had to find other ways to get some answers. As you'll see on Overtime this week, Steve looked for some lawmakers at their homes, attempted to track others down in their offices, and finally ended up asking questions at press conferences held by Nancy Pelosi and John Boehner.
"You don't like to do that stuff," Kroft tells Overtime producer David Rubin. "But on the other hand, if they don't want to talk to you and they don't want to give you an interview, and they are in powerful positions and play a prominent role in the story that you're doing, then you feel like sometimes you've got to do it."
Source:http://www.cbsnews.com/
Top 3 T.V. News Stories
1) GOP candidates tackled the foreign policy and other important ins sues at the Republican debate held last night. This would turn out to be a test for the republican presidential candidates which has been under fire lately. Bringing a lot of negative publicity to the party. The candidates saved most of their punches for the Obama administration. The issues were complex and the mood very serious. When candidates had the opportunity to ridicule an opponent, the opportunity went unused for the most part.
2) A lot of attention is being given to the newly elected Mayor of Holyoke Mass. Alex Morse is 22 years of age and has been involved in politics starting at age 11. Morse beat out the 67 year old incumbent in Tuesdays non partisan election. Morse did not see his age as being a negative, in fact he saw his youth as a positive asset. The city is home to about 40,000 people of which 48% are Latino. Morse speaks fluent Spanish, and went door to door to talk to the public about issues he thought was important to them.
3)A detainee of the Bagram air Force base detention prison, spoke with reports after hie release after one year. He did not want his identity known. He said there were problem with his neighbors and someone turned him into the military for helping the Taliban. He said it was false, he would never helped those terrible people. He said I love my country, and they destroyed it. He said the cell was 35 square feet, and they could not see the outside world. While he says he was never physically harmed, he was woken at all times of the night to be interrogated. He did not have an attorney and did not get the exercise needed. The prison is about 1 hour out of Kabut, Afghanistan. It hold 3,000 detainees. This is 18 times as many detainees that were held at Guantanamo Bay, Cuba.
Source: CBS Evening News
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