Senatorial Privilege? Sen. Dick Durbin Cashed Out His Stocks and Shares After Meeting With Paulson and Bernanke on Economic Crisis

225px-Richard_Durbin_official_photoSen. Dick Durbin, the second most senior democrat in the Senate, cashed out his stock the day after meeting with Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke. Durbin took the money and invested much of the $115,000 in Warren Buffett’s Berkshire Hathaway Inc.

The transfers occurred on Sept. 19th. The prior day he met with Paulson and Bernanke on the banking crisis. Bloomberg reports that “The Standard & Poor’s 500 Index plunged 4.7 percent last Sept. 15 after the bankruptcy of Lehman Brothers Holdings Inc. and Bank of America Corp.’s government-engineered takeover of Merrill Lynch & Co. By the end of October, the index had fallen 22.6 percent.”

I have long advocated a change in the ethics rules to require blind trusts for all members of Congress. Currently, members can make killings on the market by using their access to policy changes and special tips. For prior columns, click here and here.

Durbin, 66, insists that he was only doing what other people were doing: moving his money to safer investments. Moreover, he insists that the thrust of the information that he received from the Administration was released publicly the next day. This may be so. However, as noted in the above columns, senators have performed better than industry experts in the the past and the suspicion is that their success is due in some part to the special information that they received through their positions. More importantly, these trades and investments create an obvious appearance of self-dealing. Why should Senators (who generally have no skills or training in the market) insist on making these investments instead of using an expert in a blind trust? They obviously believe that they can do better — and historically they have. The result is that members routinely invest in areas where they are voting and legislating. If you want to write the laws affecting the markets, you should not be allowed to play the markets.

For the story, click here.

97 thoughts on “Senatorial Privilege? Sen. Dick Durbin Cashed Out His Stocks and Shares After Meeting With Paulson and Bernanke on Economic Crisis”

  1. I’ll bet Martha Stewart wished she had the same “privledge” after she cashed out on her stocks after the heads up she got from her broker.

    I know, she got convicted of lying. But I don’t think she would’ve even had the oppurtunity to lie if the feds didn’t come breathing down her neck over the insider “privledge” she recieved.

    I just fail to realize how Durbin didn’t recieve insider privledge and how if that isn’t breaking the law, it’s at least highly unethical.

    This is the kind of thing that leads to the apathy in the general population. These “privledged” classes do NOT even have the common decency to go through the motions. They do what they want without fear of even covering their tracks then dismiss the fact that they even have to explain themselves to the people that elect them.

    And as for Paulson, he is the biggest theif in the history of mankind. That bailout was the biggest financial fraud perpetrated on the American taxpayer ever.

    When it was all going down I think everybody could see the grave look of concern on Paulson’s face. YA, that was because he NEEDED money REAL quick to make sure his Wall Street cronies were going to pay themselves their usual bonus’.

    Bernie Madoff’s got nothing on Paulson.

  2. Lotta,
    sorry for this but I’m not in proofreading mode this AM, to early to be up for me.

    “I’ve never purported to *be* a totally together person.”

    “We mostly are in agreement on him **him being Jimmy Carter** and I do think that the military option’s viability receded with time.

  3. Lotta,
    My militarist plea was pure defensiveness on my part. I’ve never purported to a totally together person, I know myself too well for that, and I’m subject to my own neurosis at times. We mostly are in agreement on him and I do think that the military option’s viability receded with time. It was precisely those miscalculations you point out that disappointed me with his Presidency.

    It is possible that after time President Obama will be fully proven to have misjudged the correct position on many issues and if that is the case I will be the first to decry it. To me the point for making those judgments of him is in the future. All leaders have to play Machiavelli and indeed Machiavelli was not the monstrous cynic he is made out to be. I am not happy with some of the seeming directions he has gone in and I’ve made that clear in my postings here and in my frequent calls to the White House Comment line, calling congress people, E mails to politicians and signing petitions. Yesterday, for instance I signed a Bernie Sanders petition re: health care and called the WH regarding the insiders who are helping him shape the economic controls that need to be put in place.

  4. Lottakatz,

    I’ve been thinking the same thing. Why aren’t Americans in the streets protesting? I don’t know. We are so screwed (as you said). The economic devestation I see around me is so horrible. The dollar store food shelves are bare. I see so many people paying for groceries with plastic and I don’t think it’s for the miles. The streets are rather empty of cars. A coworker of my husband’s pointed out how quiet the Post Office machines were lately. People here are very scared, even the health care industry is laying off. I don’t think we have that much to lose by going to the streets. As to foreign policy here’s what Jeremy Scahill has to say below. Of course, JT has done a fine job covering the civil liberties angle of “no change, you can believe in that!”.

    “What I think the policies of the Obama administration over the past five months show is that we need independent political movements in this country that cannot and will not allow themselves to be co-opted by the Democratic Party–that don’t function as partisan movements for the promotion of one of the two corporate parties, but rather keep as their primary focus ending U.S. wars of aggression around the world, fighting for single-payer health care and fighting for the rights of working-class people and the poor in this nation.

    I think we have a moment now where there are people coming forward and saying, “I feel like I’ve been tricked,” or “I’m really disappointed,” or “This isn’t what I voted for.” I think that the anger and frustration that many people are expressing now is increasing, and it can be funneled into movements that fight for true change.

    I think we’re at a crossroads where if we seize the day, we really can look toward building independent political movements that are not so easily co-opted by the Democratic Party, as many, many antiwar and social justice groups were in the 2008 election campaign.” (from Jeremy Scahill at rebel reports)

  5. Lottakatz:

    “Regan’s people and the CIA with Iran to hold up the hostage release until after the election and that Iran got arms from Israel (or probably more to the point, through Israel) for doing so”

    I had a TA in college in about 1982-84 who was from Iran and told me his brother, an Iranian naval officer, was in Norfolk taking shipments of weapons. He even told me the sailors loading the crates were writing death to America on the sides of the crates. I thought he was full of sh… until the spectacle of Oliver North testifying before congress a few years later.

    So I think you are probably right, except the arms did not go through Israel if my former TA is to be believed.

  6. Lotta,

    You said, “I see the demonstrations in Iran and am heartsick that such public outrage isn’t playing out in the streets here.”

    I couldn’t agree more.

  7. Actually, I think Carter is the ONE politician you can talk about and factor his living his faith into the discussion. 🙂

    Regarding the rest of your first posting way back toward the top of the queue. I agree totally that Obama shows no difference between his Administration and Bush’s on most of the heart and soul issues that make this a (usta’ be) Constitutional Democracy. We are so screwed. If you look at the laws in place now it’s pretty obvious that the mechanism of the kind of gloves-off authoritarianism we associate with cold war Russia or China are in place and rounding up people by the trainload is only as far away as the President (through delegation) making a list and giving the order.

    I didn’t vote for this from Bush or Obama. I see the demonstrations in Iran and am heartsick that such public outrage isn’t playing out in the streets here.

  8. Mike S., I’m not at all inclined to brand you as a militarist because of your posting or history of postings that I have read, I’m certain that your opinion was reached after a great deal of thought and analysis of the situation.

    “By responding so weakly Carter gave credence to the Fundamentalist crazies within the revolution and helped turn a heretofore secular state into a fundamentalist bastion.” The ‘victory’ of the hostage taking for the new regime can’t be minimized and I have wondered more than once if the legitimacy the hardliners in Iran received because of it ended up bringing even more grief over the long term to the people.

    That the government was seized by fanatics didn’t surprise me particularly because I just chalked it up to a need for an equal and opposing force to depose the Shah’s long rule. I thinks it’s physics as much as politics and I’m not being flippant with that statement. That may have been part of Carter’s analysis; ‘they need to publicly punish us for the grief we caused by supporting the Shah and as long as the hostages aren’t brutalized or killed we can just suck it up and work diplomatically to free the hostages. Once we get past that hurdle things can begin to normalize for them and us.’ Factoring some level of public attrition and forbearance into the equation would not have been out of character for him. It was a miscalculation if that was part of Carter’s rationale.

    On the other hand, he was a military man so maybe he deemed having to take a threatened military action, and inviting a deadly countermeasure, was just too high of a risk.

    I think that after some smallish initial period of time had past there wasn’t much use in threats of force or/and military actions. The attempt so late in the game was a mistake, the time had passed for any effective show of force or military action.

    That embassy grounds are accorded the status of foreign soil is something I’m aware of. We are in more agreement on the mechanics of this aspect of his presidency than disagreement I think.

  9. lotta,

    Sure, I have no problem with that assessment. As far as his faith goes, yeah, he walks the walk. I was perhaps trying to avoid caching it in terms of his faith, instead relying upon the ethics of his actions.

  10. Lottakatz,
    I too believe that Reagan’s handlers made a deal. I don’t agree with you on whether or not an attack should have occurred. There are certain international incidents that require response, due to their nature and attacking one’s embassy is akin to attacking one’s territory. This is understood internationally. Carter should have given them a deadline to release the hostages and clearly laid out the military action if the deadline passed. The Iranian Revolutionaries were quite sophisticated and this was a move made to solidify their position internally. His lack of response did just that and made others believe that the US were “paper tigers” leading to further incursions down the line.

    I think you understand that I am not a militarist at all. However, I believe that the Iranians would have caved with a deadline and description of drastic consequences. BTW to me the Iranian Revolution was initially a very good thing. The Shah was corrupt and his secret police the Savak were as brutal, or mo so then the KGB. By responding so weakly Carter gave credence to the Fundamentalist crazies within the revolution and helped turn a heretofore secular state into a fundamentalist bastion.

  11. Mike S., BIL, I think one of Carters big problems and most ‘noble’ attributes is he actually is a good Christian. He takes the conciliatory and non-violent path whenever possible. In fact almost everything he has devoted himself to since leaving office speaks to those qualities and raises his esteem in my eyes.

    I think he would have been happy to work quietly for years if necessary to retrieve the hostages and avoid violence. Unless he was prepared to field an army (which would have probably have gotten them all killed) the prospect of retrieving that many people by stealth would have taken a miracle. I thought then and now that fielding a small expeditionary force to retrieve them was insane. Also he knew that there were American diplomatic personnel being hidden in the British Embassy that might well be in danger (as well as the the British diplomats helping them) if he used force. The act that was out of character for the man and the situation was sending is the helicopters IMO.

    I’m one of those people (along with a Congressional Committee as I recall) that believe a deal was made by Regan’s people and the CIA with Iran to hold up the hostage release until after the election and that Iran got arms from Israel (or probably more to the point, through Israel) for doing so.

    I don’t think Carter is a coward, I think he has the kind of conviction good Christians, real followers of Christ are supposed to have. I do think he has the stomach for a fight and will probably be in one fairly soon:

    It seems to me he just deals with conflict in a manner that people are not used to seeing in a President and probably don’t want in a President.

  12. Mike Spindell is totally right. Obama is so much better than what we have had. Supporting the fringe candidates accomplishes nothing and sometimes does harm. Al Gore would not have invaded Iraq.

  13. “I’m honestly at a loss as to how to change the system (short of armed rebellion, no-one would win that war). The best I’ve been able to come up with is start locally and work nationally (which I think is the mistake most “third parties” make, is they try the opposite).”

    Even with your caveats I think this is the only way. Its real problem is the patience of the human being. Building from the ground up takes a lot of work. However, Howard Dean proved the methodology, now if we could only get it done without the corporatist dollars, we might have a viable, though arduous path.

    Napoleon is a good case in point. Stature isn’t the problem, outlook is.

    To All:
    What is the value of a protest Presidential vote? What does it change. BTW Eldridge Cleaver ran for President in 1968 how far did that go? Homework: google Farrell Dobbs.

  14. “You are loyal and that is too bad. He has fooled you and you seem to refuse to acknowledge that.”

    I assume this comment was directed at me, I apologize if it wasn’t, since you averred that you preferred Carter and Clinton as Presidents which seemed to respond to my question.
    Given that, I would ask you to go back and read my post again and show me where I am so loyal to President Obama. BTW I didn’t even vote for him in my states Presidential Primary. My current judgment on President Obama and yours is based on 5 months in office. That is too short a time to make a full assessment, give me a year and we can all see the picture with more clarity. The opening paragraph of my first post:

    “Call me irresponsible, call me unreliable, but it’s undeniably true….I’m irresponsibly mad about Obama. I mean that as in happy with him, sorry everyone. So far and it is far too early to really see, he appears to me to be the best President of my conscious lifetime, being born near the end of of WWII.”

    That was, to me at least, a tongue in cheek parody of some of the attacks made against the President’s supporters both right and left. The body of the remainder of that comment and the one following clearly detail that in my opinion no current president could live up to my political wants. We are faced with a systemic problem characterized by an imbalance of power between the Corporatist interests and the People’s interests. For the time being this precludes anyone becoming president who can really effect the changes we need. As far as Carter and Clinton’s being better presidents, let’s look briefly at the record.

    Carter made a great nomination acceptance speech, I was there in MSG as a guest of the NYS delegation and was enthralled and happy. He then proceeded to alienate a more left wing Democratic congress than exists today. His staff was unable to properly liaise with them. The Camp David Accords were his only and best accomplishment, but he did not stop Begin from increasing the size and number of West Bank settlements. He lacked the ability to express a clear vision of progress domestically to the American people and his “malaise” speech was classically stupid, even for his avid, though becoming lukewarm, supporters like myself.

    Finally, his admittance of the Shah of Iran into the US led to the Iranian hostage crisis, which he bungled. A long held diplomatic necessity is the sanctity of Embassy property, which is considered the territory of the country represented. The attack upon the embassy thus was an act of war and should have been responded to in that fashion. We should have attacked strongly, in force, retrieved the prisoners and gotten out. Instead we mounted a small helicopter attack that never got off of the ground. I am hardly a militarist but some acts of aggression require response. This lost him the election to Reagan and began this round of full Corporatist dominance doubling taxes on the middle class and rollbacks of the “Great Society” programs. It also turned Democrats in congress towards the center and right wings out of fear for their offices.

    Clinton, was a disaster from early on. His “don’t ask, don’t tell” policy was a complete capitulation to the military brass, which sent the signal that this president can be pushed around, which in turn was read loud and clear by the Corporatists. He and Hillary completely blew the Health Care
    Initiative by letting it be written by the industry, who then didn’t support it. His “Welfare Reform” was a total sham
    that he instituted to get himself reelected and really eroded the safety net without the promised Welfare to Work capability. I know this well since I was an executive in NYC welfare at the time. His reappointment of Alan Greenspan to the Fed was total cowardice and accommodation to the Corporatist interests. His aid in pushing NAFTA and destroying Smoot/Hawley led to the outflow of American jobs. His deregulation of banking and industry has led us into the current sorry economic state of affairs. I’d actually rank Teddy Roosevelt, Woodrow Wilson and Dwight Eisenhower above him as 20th century presidents and they were no bargain.

    President Obama is not where I am politically, but I do believe he has the potential (and I’ll tell you in a year if I’m wrong) to be the best president since FDR. This is of course limited by the oligarchic system now in place.

    Incidentally, for those who might wonder why I always insist on using the “President Obama” or “The President” forms for this current administration it is far from obsequiousness. It is a recognition that many in their discussion of The President will try to diminish him by simply using his last name. Whatever you think of him, our first black President should receive the proper respect as befitting all of the white ones.

  15. Ross Perot had Big Ears (still does) and he made his wife buy a used Buick Enclave. I guess that means he is frugal?

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