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 HallFormer 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.
Tags: abuse of power, corruption, Credit Card Reform Act, IPO, the Credit Card Fair Fee Act, Visa stock
November 14, 2011 at 9:23 am
Michael, this is the clearest reporting of this issue I have read.
Great work.
Pelosi is wicked.
November 14, 2011 at 11:28 pm
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).
July 14, 2012 at 7:25 am
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.
July 14, 2012 at 11:53 am
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:
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.
March 3, 2013 at 6:27 pm
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!
March 3, 2013 at 10:48 pm
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.
July 4, 2014 at 10:26 am
Michael Eden get off your stick, pompous PC party lackey!
July 5, 2014 at 10:59 am
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.
July 22, 2014 at 11:09 pm
she is a low life piece of crap and should be hung
July 23, 2014 at 10:17 am
Anonymous,
Ah, a fellow Nancy Pelosi fan club member, I see.
October 18, 2014 at 9:40 am
balls
October 20, 2014 at 9:53 am
Anonymous,
I’m guessing that the fact that I have them and you don’t is bothering you.
February 28, 2017 at 9:23 pm
I agree with anonymous
March 5, 2017 at 6:05 pm
Why isn’t this crooked old lady in jail
March 11, 2017 at 2:06 am
Nancy Pelosi looks like a big Thief and not by accident.
March 16, 2017 at 5:21 pm
Clearly Pelosi is not interested in helping the American people, she is interested in making money at any cost. So sad that we have to put up with those kind of people in our government.
April 27, 2017 at 7:44 am
She got rich just like any other politician, she stole..
June 15, 2017 at 2:28 pm
She’s always been a vial twat. Why are democrat politicians so two faced. Wait a minute I think she’s working on 8 or 9 facelifts isn’t she? Sorry couldn’t resist. People play ball in life by the rules that get created by all sides and when the dems want to talk crap… then stop being soooo upset when it gets returned to you. I suffered thru 8 years of Obamas crap. Get used to the taste. Maybe you need to buy a case of mouthwash.
December 4, 2017 at 9:20 pm
Sooooooooooooooooo what are we going to do about it?????????
December 6, 2017 at 11:40 am
As long as the most evil people in the history of the world are around (that would be Democrats), not much.
August 27, 2018 at 7:04 am
Both sides are wrong .Mcain was right America first .Get the people’s work done now!Wake up!We need more party’s.RN