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On November 14, the Atlantic Wire headlined, "How Members of Congress Get Rich Through 'Honest Graft,'" saying:
"A 60 Minutes report examined the ways members of Congress trade on inside, privileged information" to get rich. "Congresspeople are exempt from insider trading rules" so profit in ways others can't legally.
They do it through stock trades and privileged business deals. Former House Speaker Dennis Hastert earmarked funding for a federal highway project on land he owned. He later sold it for $2 million.
Former Speaker Nancy Pelosi profited from eight IPOs, including some "that had business before her House." So have other congressional members, past and present.
Former Senator Bob Dole bought shares in Automatic Data Processing four days before GHW Bush signed legislation with new military data processing rules benefitting the company handsomely.
Former Speaker and Republican presidential aspirant Newt Gingrich bought Boeing stock just before he helped kill amendments to cut International Space Station funding. It helped Boeing secure a lucrative contract.
Numerous others in Congress profit the same way. Some hit the jackpot. In 2004, the Journal of Financial and Quantitative Analysis published a report showing Senate portfolios outperformed the market by about 12% annually. It didn't happen by chance.
A 2011 study showed House member investments exceed market performance by 6%. Do it annually and it adds up. For example, $100 invested at 6% for 40 years grows tenfold. At 12%, it's 80-fold.
Washington runs on inside information. Congressional members use it to get rich. While their median net worth gained 15% from 2004 to 2010, America's 10% richest found theirs unchanged, and for Americans overall, it dropped based on inflation-adjusted dollars.
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