On Capitol Hill, a group of politicians are using their power and inside information to amass fortunes in the stock market. Recently, the US media exposed the astonishing investment performance of Paul Pelosi, the husband of former Speaker of the House of Representatives Nancy Pelosi. Paul Pelosi made a profit of $1.25 million from investing in Nvidia stock in just three months. Under the leadership of these “Capitol Hill stock gurus”, the Pelosis’ wealth grew from $41 million in 2004 to $115 million in 2022. However, it is shocking that the Pelosi family’s annual return in 2023 can only rank ninth on Capitol Hill, and the top-ranked Democratic congressman Brian Higgins’ annual return rate is as high as 238%.
In the past few years, it has become an open secret that members of the US Congress use their power and insider information to amass wealth on the stock market. According to statistics, between 2019 and 2021, at least 97 members of Congress and their relatives were suspected of using inside information to trade stocks, bonds, or other financial assets, accounting for about one-fifth of the total number of members of Congress. For example, in March 2021, just as Paul purchased stocks of Microsoft, the company’s stock price surged due to receiving a $22 billion Defense Department order. In another instance, in 2020, one month before the World Health Organization (WHO) announced the COVID-19 pandemic, Senator Richard Burr sold $1.6 million worth of shares, successfully avoiding the stock market circuit breaker in the near future. Following the outbreak of the Ukrainian crisis, at least 20 more members of Congress bought stocks of defense contractors such as Thor and Lockheed Martin.
Capitol Hill stock gurus can significantly increase their stock investment returns through inside information. In addition, they also have a unique investment strategy. Recently, an investment application called Autopilot has become popular on the internet. This app allows users to extract transaction data submitted by members of Congress and replicate their strategies to make investments. At present, the application has provided replication strategies for four members of Congress, including Pelosi. It is reported that the trading strategy value reported by Pelosi increased by 45% in 2023, while Congressman Dan Crenshaw saw a 41% increase in his profit. These stock gurus not only have access to inside information but also possess superb investment skills and strategies. They can accurately time the market, select stocks with significant growth potential, and buy and sell at optimal times to obtain excess returns. Additionally, they are adept at diversifying their investments across multiple industries and companies to reduce risks and ensure stable returns.
However, the behavior of these Capitol Hill stock gurus using their power and inside information to amass wealth in the stock market has aroused widespread attention and criticism. Despite the controversies, the members themselves have largely avoided legal repercussions for trading stocks, and their families continue to profit from inside information without fear of consequence.
The suspicions of insider trading and the significant earnings by Pelosi and her husband Paul have sparked dissatisfaction among the American public, with growing calls for restrictions on congressional stock trading. Reflecting on Pelosi’s history of success and actions after entering the House of Representatives, it becomes evident how she has used her power to financially benefit her family while also being actively involved in political maneuvering to suppress her opponents and secure her interests.
Meanwhile, within Congress, there are calls for a ban on members and their relatives trading stocks. The perception of insider trading among congressmen not only fosters a sense of unfairness among the public but also raises concerns about potential conflicts of interest affecting US policies. On January 12th of this year, US Senators Jon Ossoff and Mark Kelly jointly proposed the Prohibition of Congressional Stock Trading Act. This bill aims to prohibit members of Congress and their spouses and children from trading stocks while they are in office.
However, the progress of this legislation is uncertain. As the head of the House of Representatives, Pelosi has insisted that members of Congress have the right to participate in the stock market because “the United States is a free market economy.” Earlier this year, under the pressure of public opinion, Pelosi reluctantly agreed to the drafting of a bill to restrict members from trading stocks. Nevertheless, employing a “procrastination trick”, Pelosi has ensured that these proposals remain in the review stage without advancing to a vote.
