How Nancy Pelosi Got Rich (Corruption, Abuse Of Power Alert)

Let’s just call the top Democrat in the House of Representatives what she always has been: a dishonest thief.

While Investing Millions in Exclusive Visa Stock Offering
by Wynton Hall

Former Speaker of the House–and current Minority Leader–Nancy Pelosi apparently bought $1 million to $5 million of Visa stock in one of the most sought-after and profitable initial public offerings (IPO) in American history, thwarted serious credit card reform for two years, and then watched her investment skyrocket 203%.

The revelation appears in Throw Them All Out, the new book by investigative journalist and Breitbart editor Peter Schweizer, which was the focus of 60 Minutes on CBS this evening, and which is featured in this week’s issue of Newsweek.

[See Big Government article for video

Schweizer’s investigation of Pelosi and other members of Congress–from both parties–raises a critical question: should it be legal for lawmakers to buy stocks in companies directly affected by their legislative efforts?

In early 2008, Nancy Pelosi and her real estate developer husband, Paul, were given an opportunity to buy into a Visa IPO. It was a nearly impossible feat–one that average citizens almost certainly could never achieve. The vast majority of purchase opportunities went to institutional investors, large mutual funds, or pension funds.

Despite Pelosi’s consistent railing against credit card companies, on March 18, 2008, the Pelosis bought between $1 million and $5 million (politicians do not have to report the exact amounts, only ranges) worth of Visa stock at the IPO price of $44 per share. Two days later, the stock price rocketed to $65 per share, yielding a 50% profit. The Pelosis then bought Visa twice more. By their third purchase on June 4, 2008, Visa was worth $85 per share.

How did Nancy Pelosi snag one of the most coveted initial public offerings in history? The facts are still emerging. Yet according to Schweizer, corporations that wish to build congressional allies will sometimes hand-pick members of Congress to receive IPOs. Pelosi received her Visa IPO almost two weeks after a potentially damaging piece of legislation for Visa, the Credit Card Fair Fee Act, had been introduced in the House. If passed, the bill would have cut into Visa’s profits substantially by lowering so-called “interchange fees,” the 1% to 3% charge retailers pay Visa when customers use Visa cards for purchases. Interchange fees are a critical source of revenue for the four credit card companies–$48 billion in 2008, to be exact.

If the Credit Card Fair Fee Act had been passed into effect, it would have amended antitrust laws to require credit card companies to enter negotiations with merchants over interchange fees, and it would have given the Justice Department and the Federal Trade Commission the power to arbitrate if the two sides failed to come to an agreement. For that reason, Visa and the other credit card companies strongly opposed the bill.

The Credit Card Fair Fee Act was exactly the kind of bill one would think then-Speaker Pelosi would have backed. “She had been outspoken about antitrust problems posed by insurance, oil, and pharmaceutical companies,” Schweizer notes, “and she was vocal about the need for controlling interest rates individual banks charged to use their credit cards.”

Initially, the Credit Card Fair Fee Act cleared the Judiciary Committee on a 19-16 vote, and the National Association of Convenience Stores began lobbying for a vote on the floor of the House. “It is imperative to tell your Representatives to request a vote on the House Floor from Nancy Pelosi,” the association urged its members. Still, with at least ten percent of the Pelosi family’s entire stock portfolio invested in a single stock, Nancy Pelosi clearly had a vested interest in ensuring that Visa’s profits were protected. And that is exactly what she accomplished. Despite broad public support for the bill—77% in one study—Pelosi saw to it that the bill never made it to the House floor.

Shortly thereafter, a second bill limiting collusion by the credit card companies on interchange fees was proposed. The Credit Card Interchange Fee Act of 2008, while not as strong as the first bill, would have required greater transparency from credit card companies in informing customers how much they were paying in interchange fees. Yet again, reports Schweizer, “this second bill suffered the same fate as the first, never making it to the House floor.”

By 2009, both bills had garnered even broader bipartisan support and were reintroduced. Under Speaker Pelosi, however, neither bill lived to see a vote on the House floor.

Pelosi eventually supported something called the Credit Card Reform Act. Curiously, the all-important interchange fees went untouched by that legislation. Instead, the bill stated that the interchange fee issue should simply be “studied.” The bill’s other measures would not affect Visa but rather its client banks. In short, the Credit Card Reform Act ensured that Visa and the other credit card companies dodged a potentially costly bullet.

None of that, however, prevented Pelosi from grandstanding. She publicly declared that the Credit Card Reform Act sent a “strong and clear message to credit card companies” that they would be held to account for their “anti-consumer practices.”

In the wake of the bill’s passage, the Pelosis’ shares of Visa stock rose. Indeed, according to Throw Them All Out, “the IPO shares they had purchased soared by 203% from where they began, while the stock market as a whole was down 15% during the same period.”

Nancy Pelosi is hardly the only member of Congress to be given IPOs, but Pelosi has been especially “lucky” at landing them. She and her husband 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% 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.

Schweizer says Nancy Pelosi’s financial disclosure forms typically mask the precise dates of her stock buys. He cites the Pelosis’ December 1999 stock purchase of between $250,000 and $500,000 in shares from high-tech company OnDisplay. A few months later, OnDisplay was bought by Vignette, which resulted in up to $1 million in capital gains for the Pelosis. What was unusual about the transaction is that Vignette’s IPO was underwritten by a major campaign contributor and longtime friend of Nancy Pelosi, William Hambrecht.

Throw Them All Out also chronicles the Pelosis’ $100,000 IPO purchase of Clean Energy Fuels at roughly $12 a share. Schweizer alleges that as Speaker of the House, Pelosi pushed several bills beneficial to the company.

Similarly, in November 2007, Pelosi bought $500,000 in the IPO for Quest Energy Partners before proceeding to champion the natural gas-related legislation that stood to significantly benefit the company. When Tom Brokaw asked her whether her significant personal investments in natural gas represented a conflict of interest, Pelosi shrugged off the question by hiding behind the crony capitalist’s false credo: “That’s the marketplace.”

When you’ve got Democrats in power, you’ve got corrupt “Chicago thug politics” pretty much everywhere.

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12 Responses to “How Nancy Pelosi Got Rich (Corruption, Abuse Of Power Alert)”

  1. HL Says:

    Michael, this is the clearest reporting of this issue I have read.
    Great work.
    Pelosi is wicked.

  2. Michael Eden Says:

    Thanks, HL.

    Pelosi is wicked and stupid. And ultimately evil is stupid. Because if you think you’ve got a wiser or smarter plan than God, you are clearly a complete dumbass (that means you too, Obama).

  3. Anonymous Says:

    when are you going to write a report on mitt romney’S OFFSHORE ACCOUNTS . YOU WILL ARGUE THAT THEY ARE LEGAL.That is pelosi’s argument too.

  4. Michael Eden Says:

    Well, anonymous, you jackass, at least you make it easy to completely refute you. All I have to do is copy and paste from the LAST liberal jackass:

    If you think it IS illegal to have money in off-shore accounts, then please start screaming that Valerie Jarrett and Debbie Wasserman-Schultz resign in disgrace immediately. Because between Jarrett, who has money invested in an offshore account in Bermuda, and Wasserman-Schultz, who has money in an offshore Swiss account, you pretty much duplicate Romney.

    In point of fact, it is NOT illegal to have off-shore accounts. I quote a tax attorney:

    there is nothing illegal about having an offshore bank account, and if it is under $10,000 you don’t have to declare anything.

    Here’s what the Associated Press said:

    WASHINGTON (AP) — Republican presidential candidate Mitt Romney owns investments worth between $7 million and $32 million in offshore-based holdings, which are often used legitimately by private equity firms to attract foreign investors. Such offshore accounts also can enable wealthy investors to defer paying U.S. taxes on some assets, according to tax experts.

    An Associated Press examination of Romney’s financial records identified at least six funds set up in the Cayman Islands, a small Caribbean island chain that has long been used as a base for international investments because of low tax rates and financial secrecy. Romney has acknowledged that some of his investments are based in the Caymans, but he has not identified all of the specific accounts and the amounts based there. There is no indication Romney uses the accounts to dodge any U.S. tax obligations.

    The Caymans have often been associated with individuals and corporations seeking to avoid paying U.S. taxes. However, it is legal for U.S. residents to own investment accounts that are set up there — if they file the proper forms with the Internal Revenue Service and pay the appropriate taxes.

    This is particularly interesting from Citibank:

    Offshore Renminbi Deposit.

    Seize the opportunities in China’s rapid economic growth, with the well-timed offer of a Citibank Offshore Renminbi Deposit. Enjoy attractive interest rates with a minimum deposit amount of USD50,000 or equivalent, and choose from tenures of 1, 3 or 6 months

    I took a screenshot of that for future reference because it appears Citibank may be listening to Obama’s demonizing and scrubbing their offshore account pitches. This link – which was titled, “Offshore banking from Citibank International Personal Bank Singapore” is now basically scrubbed.

    What is particularly interesting about that is that 1) Citibank was a HUGE donor to the Obama campaign in 2008; and 2) none other than Obama official Jack Lew as COO of Citi’s Alternative Investments unit that ran that section of Citigroup that handled offshore banking. Among other horrors. Which just goes to further document what dishonest frauds your guys truly are.

    You are simply an ignorant liar and you would be ashamed of yourself if you had any virtue.

    Mitt Romney has these “off-shore accounts” in BLIND TRUSTS and those blind trusts DO appear in his tax filings. He has had this blind trust since the days when he was a governor. And all taxes on those investments have been paid.

    The only person who belongs in jail is YOU for your slander and character defamation, you disgrace.

    Get lost, you loser. I block people who lie on this blog. And what you said is a pure lie.

  5. Phil Says:

    Why hasn’t anyone in the media looked into obama’s finances. How about his wife’s. How his schooling was paid for and by who. Why is it ok to look at one guy and not the other. Sounds like some one is hideing something!

  6. Michael Eden Says:

    Phil,

    Because this is God damn America. And because the mainstream media propaganda is every bit as great as Goebbel’s Ministry of Propganda or Stalin’s TASS.

  7. Tim Merrill Says:

    Michael Eden get off your stick, pompous PC party lackey!

  8. Michael Eden Says:

    Tim Merrill

    That’s actually funny.

    You are here defending what Nancy Pelosi did for no other reason than that you are a mindless Democrat ideologue – and you’ve got the giant testicles of hypocrisy to label me a “party lacky.”

    Btw, this is exactly how Harry Reid – who has been a government bureaucrat all his life and – who therefore shouldn’t be filthy rich – got to live in a suite in a luxury Las Vegas hotel: by getting rich off his votes and his politics.

    But you’re the kind who despises Mitt Romney as “out of touch” because he was rich but never once thinks about how filthy rich and out of touch the Clintons are when Hillary runs.

    It’s amazing.

  9. Anonymous Says:

    she is a low life piece of crap and should be hung

  10. Michael Eden Says:

    Anonymous,

    Ah, a fellow Nancy Pelosi fan club member, I see.

  11. Anonymous Says:

    balls

  12. Michael Eden Says:

    Anonymous,

    I’m guessing that the fact that I have them and you don’t is bothering you.

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