Hoover Institution scholar Peter Schweizer is making huge waves this week with advance coverage of his book “Throw Them All Out” on “60 Minutes” and in a Newsweek piece by Peter Boyer. CBS and Newsweek focused on Schweizer’s contention that because Congress exempts itself from laws it imposes on the rest of us, senators and representatives can engage in insider stock trading with impunity. Among the most outrageous examples, according to Schweizer, is that of former House Speaker Nancy Pelosi, who, with her millionaire husband, bought between $1 million and $5 million (members of Congress only have to report such investments in broad categories rather than nickels and dimes like the rest of us) in an initial public offering from Visa. The Pelosis paid $44 per share in the IPO. According to Wynton Hall of BigGovernment.com (Schweizer is also an editor there), the Pelosis did rather handsomely on this investment because “two days later, the stock price rocketed to $65 per share, yielding a 50 percent profit. The Pelosis then bought Visa twice more. By their third purchase on June 4, 2008, Visa was worth $85 per share.” In the “60 Minutes” segment, Pelosi snarkily dismisses reporter Steve Kroft’s question about an apparent conflict of interest as if no sane person would ever even think of asking.
But the Visa IPO was not the first time the Pelosis have done well on IPOs in which government played important roles in determining the initial price of offerings. As Hall notes, Schweizer’s research makes clear that the Pelosis “have participated in at least 10 lucrative IPOs throughout her career. In 1993, Pelosi purchased IPO shares in a high-tech company named Gupta, watched the stock price leap 88 percent in 24 hours, then seized the profits by selling the stock the next day. The Pelosis did the same thing with Netscape and UUNet, resulting in a one-day doubling of their initial investment. Other fast and lucrative IPO flips included Remedy Corporation, Opal, Legato Systems, and Act Networks.”
