Recent allegations against Congressman Spencer Bachus (R, AL-06) are an embarrassment to this state and to this University (of which he is an alumnus) and bring to light a gross conflict of interest that exists within our legislative branch.
"60 Minutes," with the help of Peter Schweizer, a fellow at Stanford University's Hoover institution, profiled members of Congress who have allegedly used nonpublic information to execute trades in the stock markets.
Allegations were made against both Republicans and Democrats, including, but not limited to, Financial Services Chairman Spencer Bachus, Speaker John Boehner and Minority Leader Nancy Pelosi.
The legislative branch is not limited to the same conflict of interest rules as the executive and judicial branches and corporate executives. In one 2008 example, congressman Bachus, then ranking member of the House Financial Services Committee, purchased a large share of options for Proshares Ultra-Short, a popular fund that shorts the market, just one day after participating in a closed-door meeting with congressional leaders, Secretary Henry Paulson, and Chairman Bernanke.
In this meeting Bernanke warned Congress that the trouble in the financial services industry could have a dramatic effect on the rest of the economy.
The gentleman from Alabama doubled his money in a matter of days. While it is difficult to prove that Bachus or any other members of Congress acted on private information, it is easy to see that the legislative branch needs to be subjected to the same conflict of interest laws as other branches. As for the future of Bachus, that is for his constituents to decide.
Daniel Bauman
sophomore, accounting and economics
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