(slurping sounds)- All right, let's do this.Check this out.On September 19th, 2008,Republican CongressmanSpencer Bachus made a tradethat was effectively a bet thatthe stock market would drop.His trade meant that forevery percentage pointthat the NASDAQ dropped, hisinvestment would go up by 200%.This is what's knownas shorting the market,and it was actually a brilliant bet,because take a look whathappens over the next four days.(intense upbeat music)Oh, and this is when he sells,nearly doubling his investment.It was an amazing trade.It was almost as if hecould see the future.Wait, what's this?Ah, the day before he made this trade,Bachus was sitting in a roomin a private meetingwith the top officialsof the US Treasury and Fed.The meeting was so secret that everyonehad to hand over their phonebefore entering the room.The people that Bachus was meeting withwere the ones who werein charge of making surethat everything was undercontrol in the US economy.But this was September, 2008and things were not under control.- This could be the mostserious recession in decades.- So in this meeting,Bachus was told that quote,it was a matter of daysbefore there was going to bea meltdown in the global financial system.- Let's talk about the speed with whichwe are watching this market deteriorate.- We're down over 16%.- Okay, so that explainswhy he was able to makethis brilliant trade.He knew when the marketwas about to crash,because he had intel from within.But what's crazy is thatBachus's short on the marketwasn't breaking any rules.It was totally legal.Luckily, we have financial disclosures,all of the stocks thatlawmakers buy and sell,public information.So we can see who's making tradesbased on insider information.And we've used all of this informationto make a list for you,a list of the lawmakers that we seeas some of the bestinvestors in our country.And in this video, I want to explainhow their insider knowledge may help themmake the best bets on Wall Street.- [Reporter] There's all sorts ofinsider trading happening in Congress.- [Male Reporter] That'sbecause they're corrupt.They wanna keep making moneyfrom that inside trading.- [Reporter 2] TheAmerican people should knowthat a member of Congressis never leaving a classified briefingand calling their stockbroker.(intense music)- So, we in the Westlove a good free market,buy, sell, and invest as you please.But, for certain people whohave special insider informationabout the economy, we have rulesto stop them from gaming thesystem with their knowledge.We passed these laws like a century go.They're called insider trading laws.- Insider trading.- Insider trading.- Basically, they prohibit peoplefrom selling an investment like stocks,using non-public information.This includes tippingthis info to other peoplewho then go buy the stocksbased on that insider information.And an insider is anyone who is an officeror director or 10% stakeholder,or anyone who possessesinsider information,because of his or herrelationship with a company.This could be like the daughter of a CEOwho has insider information,because she talked to herdad around the dinner tableabout what the company's gonna do next.So if you're the CEO of Microsoft,you're not allowed tosell a bunch of your stockthe day before yourelease an earnings reportthat shows that yourcompany's profits are down,which will likely trigger likea drop in the stock price.A free market needs tobe a fair market too,so that the insidersaren't always the oneswith the knowledge tomake the best trades.Okay, so while insidertrading laws are very clearwhen it comes to business executives,there's a group of people in our societyto whom these rules kindof don't apply, lawmakers.- Historically, Congresshas had no restrictionswhen it comes to trading stocks.For most of American history,insider trading laws that affected CEOs,didn't apply to members of Congress.- Lawmakers hear loadsof private information.They sit on committees,where they investigateand talk to businesses all the time.This stuff affects the economyand thus the stock market.And a lot of it is private.They know this stuffbefore the rest of us do.And yet, for most of our historyhere in the United States,lawmakers have been ableto buy and sell stockswith very little restriction,(crowd applauds)and that is why this report exists.(smacking sounds)This brilliant studyrecreates all of the tradesthat senators made over thecourse of four years in the 90sand found that consistentlythese senators hadabnormal positive returns,like way better than some of thebest investors in our country.- [Narrator] A studyof data from the 1990sshowed senators' tradesoutperformed the marketby 12% per year.That crushes investmentguru Warren Buffett,who only managed to beat themarket by 2.5% that decade.- Hmm, okay.So either these civil servantsare just like super savvy investors,or as the study suggests,the senators knew the appropriate timeto buy and sell their common stocks.Like we're all kind of guessingwhen we're playing the stock market,everyone's guessingwhat's gonna happen next.If you kind of knowwhat's gonna happen next,because you're like privy toinformation about the economy,you can play the game a lot better.(cheerful music)Thank you BetterHelp, forsponsoring today's video.I'm a massive believer in therapy.Therapy has transformed my lifeand I believe that everyone needs therapy.I don't think it's like a thingthat is for people who haveclinical mental health issues,though it's obviously useful for that.But all of us who live andhave relationships and feelingsand good days and bad dayscould use a professional to speak toand learn about how our minds workand learn how to see andunderstand our thought processes.That's what therapy is.BetterHelp is a platformthat makes therapymore accessible to people.Finding a therapist is difficult,I mean you have to like call around,see if it works with yourinsurance, go to an office, wait.BetterHelp uses technology to get rid ofall of those barriers.What you do is you signup, you take a quick quizand then BetterHelpmatches you with someonein their massive network oflike tens of thousands oflicensed professional therapiststhat you can startcommunicating with immediately,like within a few days.You can do a video call,you can do a phone call,you could even just dotexting back and forth.Regardless of how you do it,you are communicating witha professional therapistand you are starting your journeytowards increased mental health,which is something I deeply believe in.Often it takes a moment tofind the best therapist.So the best part is if youget matched with a therapistthat isn't a good fit for you,you can change immediately for no costand they'll just find you someone elsein their huge network of therapists,until you find the right person.It's a really a game changerfor making therapy more accessible.There's a link in my description.It's betterhelp.com/johnnyharris.Clicking that link helpssupport this channel,but it also gets you adiscount to try BetterHelp out.You get 10% off your first month,so you can try it out at a discount,see if it's a good fit for you.Thank you BetterHelp, forsponsoring today's video.Let's dive back into our list.- If we were trading stocksbased on insider info,we'd go to prison.They don't go to prison.This happens out in the open.- And then, as banks in the stock marketwere collapsing in 2008,lawmakers once again made headlineswith their surprisingly successfuland suspiciously timed trades.In 2012, the Washington Postdid a big investigation into thisand found that in the leadup to the 2008 meltdown,had least 34 lawmakers fromboth sides of the aisle,changed portions of their portfolios,166 times within two business daysof speaking with administration officials.So many of these lawmakersare making loads of moneywhile the economy ismelting down around them.When asked about their shady transactions,lawmakers such as John Boehner quote,declined to discuss their transactions.After this blatant displayof insider knowledge,it became more and moreclear that lawmakerswere using their knowledgeto enrich themselves.And it was not a great lookat a time when millions of Americanswere losing their lifesavings and jobs and houses.- It was the worst day on Wall Street,since the crash of 1987.- Oh, but remember, it was still legal.They weren't breaking any rules.It was their right to do this.But the pressure mounted.And in 2012, they passeda law on themselves.We have an act of Congress.Look at this.112th Congress passing lawsto regulate their own greed.I love this.I love this.- The idea that everybodyplays by the same rulesis one of our mostcherished American values.- Oh, and look at the name of the law.This is the Stop Trading onCongressional Knowledge Act.The Stock Act, pretty clever.This law bans Congress frombuying and selling stocksbased on insider informationand requires them to publishall of their trading activity,which is one reason whyI have all of this paper.They're like now required to discloseall of their stock trading.Great, 2012, they passed the law.Problem solved, right?Well no, not according to our reporting.Despite this law, we still have a listthat I'm now about to show you.(upbeat music)This is a list of all the lawmakerswho went on to continue to makesavvy trades in the market,all while still being totally clued into private and privilegedinformation about the economy.(intense upbeat music)Okay, first up, we've gotthe financial disclosureof Republican Senator RichardBurr from North Carolina.(ominous music)In January, 2020, beforeany of us really knewthat the world was literallyabout to shut down,Burr was the chairman of theSenate Intelligence Committee.On January 24th, he togetherwith a bunch of senatorswere briefed on secret informationabout how bad the Coronavirus pandemicreally was about to get.And according to thisunsealed FBI document,a few days later, Burr discussedsome of that non-public informationthat he had learned in thebriefing with someone via text.Who was that someone?Their name was, redacted.We don't know, because it's an FBI thing.Doesn't matter.What we do know is thatminutes after this call,Burr logs into his trading accountand sells $110,000 worth of stocks.(upbeat music)That same day, literallyat 3:43 that same day,right after he sells hisstocks, like a few hours later,the White House comes outand says that they're goingto ban people from travelingto the United States ifthey've been to Chinain the last 14 days.Soon after selling all of his stocks,Senator Burr writes an op-ed for Fox Newsclaiming that the US is quote,better prepared than ever toface the Coronavirus threat.And yet Burr continues to sell his stocks.This is his disclosurefrom February of 2020and the guy's going kind of nuts on sales.All of this whole entirerow are all sales.This guy is selling, sell, sell, sell.(intense upbeat music)In this time period,Burr moved over a milliondollars from stocksinto Treasury securities,which is an investment that is super safeduring an economic downturn.But what was crazy isthat the stock marketwas at an all-time highand he just sold essentiallyall of his stocks.And then look what happens.(upbeat music)And while he was downplaying the severityof the pandemic in public,in private, he was spilling the beanslike in this secretrecording of obtained by NPR,where Burr is telling agroup of his social club.- [Richard] There's one thingthat I can tell you about this,it is much more aggressivein its transitionthan anything that we haveseen in recent history.It's probably more akinto the 1918 pandemic.- According to aninvestigation by ProPublica,Burr also passed his private infoto his brother-in-law in a callthat lasted only 50 seconds.And the very next minute,his brother-in-law called up his brokerand dumped between 97,000 and280,000 US dollars in shares.I mean, if this isn't insidertrading, I don't know what is.And yet it's impossible to prove anything.Burr himself might even be convincedthat this wasn't insider tradingand that he's just a really smart investorand that he did all of this based onpublicly available information.And indeed the SEC andDepartment of Justiceinvestigated this, butultimately dropped the matter.Oh, and fun fact, Burr islike one of three senatorswho voted against the insidertrading law, the Stocks Act.So yeah, we know where he stands.Okay, that was kind of a longer one.Not all of them aregonna be that in depth.Next up, we've got thismonstrosity of a document.We are looking at the financial disclosureof Congressman Ro Khanna from California.(upbeat music)Look at this, it's likedozens and dozens of pagesand they are effectively unreadable.(intense music)What's the point of disclosingyour financial transactionsif no one can read them?These disclosures show that since 2019,Congressman Khanna's familyhas made at least 10,500 tradesinvolving nearly 900 companies.Oof, it's quite a few.Okay, like not a crimeto make a lot of trades.What's the deal?A lot of these trades,most of these tradeswere done through a trustthat belongs to like his wife and kids.- Well, it's not, I don't trade at all.I'm up for banning trade.It's my wife's money,which I have no actual legal rights to.- But, when you look at what companiesare being bought and sold,you see that of the 897companies traded by his family,149 of them were ones that Khannalikely had non-public information about,because of his role as a congressmanwho sits on a bunch of committees.Like for example, he sits onthe House Oversight Committee,which is a committee thathas directly investigateddrug prices for companies like AbbVie,at the same time that his wifewas trading in AbbVie stock.You're right, it was his wife, not him.But you see, you see this is not okay.And this wasn't the only one.The New York Times did an investigationthat found loads of instanceswhere Khanna's wife and kidswere trading in companiesthat were being activelyinvestigated by Khanna himself,at the same time.Examples include weapon manufacturers,like Lockheed Martin,big pharma companies,like Johnson and Johnson.Yes, technically it was hiswife and kids doing it, not him.But come on, this feelskind of like a blurry line,but it also feels really clearlike you shouldn't be able to trade stockif your husband isinvestigating the companythat you're trading stock in.Also, these are his children.Like, they're not the ones decidingwhat stocks they're gonna buy and sell.So yeah, feels off to me.But again, there's no way to prove this.There's no like directsmoking Ganesh type thingthat's like, this is insider trading.Anyway, let's move on.(cheerful music)And then there isCongresswoman Nancy Pelosi,a democrat from Californiawho served as Speakerof the House for years.Speaker of the House is arole that has major influenceon what laws get through our system.Nancy Pelosi is alsomarried to an investor.So yeah, the story told inthese financial disclosuresis one of Nancy Pelosi being marriedto a very, very good investor,especially during financialturmoil in America.(upbeat music)In the two years followingthe 2008 financial crisis,the Pelosis' estimated net worthgrew from $31 millionto over a $100 million.That's up 220%, all whilethe S and P 500 fell by 13%.The Pelosis also did superwell during the pandemic,seeing their net worthjump from a $106 million to $171 million,within in like the twoyears of the pandemic,that's an increase of60% during the pandemic.And I mean, listen, likelet's be fair on this.I'm sure Paul Pelosi is afantastic, savvy investor,and there's frankly no evidenceof foul play or anythinginsider trading here,but there doesn't have to be.The very fact that a professional investorlives in the same home as the womanwho is at the center of the American legaland regulatory system,presents a major conflictof interest, in my opinion.But I know it's tricky because I believethat people should beable to do what they wantwith their money.But when we pay our lawmakersto handle special information,it feels off to me whensuddenly those lawmakersare making bank duringfinancial meltdowns.But it's not just thesefinancial meltdownsand recessions where they do well.The Pelosis sold $3 millionworth of Google stock,just a few weeks before the DOJ announcedthat it was suing Googlefor anti-trust reasons,like right before their stock tanked.(upbeat music)Did Pelosis know that theDOJ was going to investigate?Do we know?No, we don't know.But the timing was fishy.And besides, there'splenty more examples here.Like when Paul Pelosi boughtmillions of dollars of Tesla stock,while his wife was passing lawsthat would directlyimpact the value of Tesla,like major taxpayer sponsoredelectric car subsidies.Or when he dumped millionsof dollars of Nvidia stock,days before the US government announcedthat it would restrict chip makersfrom trading with China and Russia.I mean, the Pelosi investor-lawmaker combohas been so successfulthat people have startedcopying their trades.- Oh man, Nancy Pelosi's back at it again.You know what they say,"you wanna see how to besuccessful in trading stocks?Just watch what Nancy Pelosi is doing".- She literally lockedin a 20% gain for you,because it sold when she sold.- She's like a meme withinthe investor communitybecause of this.And when a journalist askedher in a press conferenceabout these allegations of insider tradingor if this should be banned,this was her response.- No, to the second one.(reporters mumbling)Because this is a free market and people,we are a free market economy,they should be able toparticipate in that.- And I mean, yes, she's right.This is a free market economy.People should be able to dowhat they want with their money,even if they are civil servantswho frankly do a difficult job every day.But a free market is not a fair marketif some people, especially civil servantsare operating with informationthat affects the marketand using that information to get rich.But again, all of this is legal.Like no one's breaking anyrules here, at least overtly.You can't prove that a law was broken.And even if you could,the only people who have thepower to really change itand enforce this are the peoplewho are making money offof the lobbying really lax.More on that in a second, butlet's get back to our list.- [Female Reporter]Republican CongresswomanMarjorie Taylor Greene,once again defending hercontroversial rhetoric.- Next up, we've gotRepublican CongresswomanMarjorie Taylor Greene.She's number 12 on the best performingstock investors in our Congress.So naturally, we had to take a look.On February 22nd, 2022,a little over a year ago,Greene invested in Lockheed Martin,which is a defense contractor,and Chevron, which is a giant oil company.The next day, she puts out this tweet,war and rumors of waris incredibly profitable and convenient.Okay, and then the day afterthat, Russia invades Ukraine.Her investment in a defensecontractor and an oil giant.It made her a good amount of money.But who knows, could havebeen a whole coincidenceor could have been public information.We all kind of knew that Putinwas thinking of invading.It's all technically legal and unprovable.But, if you wanna godown another rabbit holeon how lawmakers profit from warand the military industrial complex,check out our video on who got richoff the war in Afghanistan.Anyway, moving on.(cheerful music)Next up, we've got Kelly Loeffler,former Senator from Georgia.Loeffler was also in that privateCDC Senate Health Committee briefingthat her colleague Richard Burr attended.And look, the next day she'stweeting out her thanksfor this wonderful briefing.What you've forgot to mentionwas that within hours of the meeting,she and her husbandsold off between 50,000and a $100,000 of stocks.(buzzer chimes)And then, according toher financial disclosuresin the following weeks,she sold somewhere between 1.2and $3.1 million in stocks,right before the big marketcrash on February 20th.(bell chimes)(upbeat music)Like, do you realize it'sthe same exact thing?She had a head start.She had information that none of us hadabout how bad this really wasand she was able to sell all of her stuffat the right time.Like Senator Burr, she wasinvestigated for a while,but nothing ever came of it.I mean, it's kind of tricky like,should Senator Kelly Loefflerlike not sell her stocks ever,even if the economy's meltingdown and we all know it?Like should she be forcedto hold on to her stocks?I don't think that's right either.There are some good solutions to thisand we'll get to them in a sec.But let's move on toSenator Dianne Feinstein.(ominous music)Who was also in thatroom in January of 2020,getting briefed on how badthe pandemic was about to be.And like others, right after the briefing,she dumped a bunch of stocks likesomewhere between 1.5 and $6 million.Man, these senators have alot of cash lying around.The FBI questioned Feinstein about thisand she said that she hadno influence over this,that it was her husbandwho did the tradingand that it was all justimpeccably timed all by himself.No dinner table conversationsabout today's briefing with the CDC.No pillow talk, nothing, lips sealed.Honey, how was your day at work today?Good, but I can't tell you about itbecause it was a privileged briefingbecause you might go offand sell all of our stocksand avoid us losing hundredsof thousands of dollars,'cause the market'sprobably gonna crash soon.So I'm just gonna stay totally quiet,because the Stocks Act says so.Like no, I'm not saying that Feinsteintold her husband to sell stocks.I'm saying that it's absurd tothink that a husband and wifedon't talk about everythingin a normal conversationand a conversation thatwould probably be lacedwith inadvertent, insider informationthat maybe as benign soundingas an update on your dayor how your day at work was.It's just a natural conflict of interest.And yes, the FBI backed offand closed the investigationlike they did for everybody else.Okay, let's get to onemore case on our list.This is by no means a comprehensive listof everyone who has hadsuspicious timed trades.It's just sort of our highlights.And this is the last but not least.(upbeat music)Former Senator David Perdue,who traded 2,596 times in a single term.The New York Times did thisgreat deep dive on those tradesand found that he regularlybought and sold stocksin companies that fell underthe Senate Oversight Committee,which he was on.One very clear examplein all of this is 2016,Perdue made a bunch of tradesin a company called FireEye.It's a cybersecurity company that had,oh, landed a 30 million contractwith the federal government.It operates out of Purdue'shome state of Georgia,and most of these trades in this companyhappened while he was sittingon the cybersecurity panel,a role that could easilygive him non-public industryand business informationabout companies like FireEye,which he owned stock in.Two years later, Perdue reportedthat he made up to $15,000off of his investment in FireEye.He also traded in a bunchof financial institutions,like JP Morgan Chase and Bank of America,while he was supposedto be overseeing themas a member of the Senate Banking, Housingand Urban Affairs Committee.Like conflict of interest,regulating the companiesthat you are personally invested in.Like it's so clear I don'teven have to explain like it's.Okay, well that's it.So this is all prettyfrustrating and like not right,but wait, what happened to the Stocks Act?Like, what?Where's that law?Remember the Stocks Act?Remember this, 2012?Didn't they like pass a law that said,you're not allowed to do this anymore?Kind of.- Lately, I've been talkinga lot about the choicesfacing this country.We can settle for acountry that in the economywhere a shrinking number ofpeople do exceedingly well,while a growing number struggle to get byor we can build an economywhere everybody gets a fair shotand everybody plays bythe same set of rules.- It turns out that whilethe acronym is very strong,the legislation is incredibly weak.- It's certainly illegalfor members of Congressto partake in insider trading.Proving that is very difficult.- Second, even if youdo get caught in this,like not disclosing orsharing insider information,the fine is laughable.- As a lawmaker,you don't face any realsignificant penaltyfor violating the StockAct, if you ultimately do,particularly the disclosure provision,- Theoretically, it's supposed to be like15 years in prison.But in all of our research,not a single lawmaker hasfaced any consequences.Even though there's beenat least 78 instanceswhere Congress has violatedthe law very overtly.- You can make tens of millions of dollarswith privilege informationand what's the penaltyfor failing to report these purchases?It's a joke.It's as low as $200.- The Stocks Act wasnever going to preventmembers of Congress frommaking a few extra dollarshere and there with theirinsider information.- We have a free market economy.They should be able toparticipate in that.- But here's the thing,lawmakers themselves knowthat this is a problem.Like this is not a good look.- But I'm actually forbanning stock trading.- Members of Congressshould not be sellingindividual stocks, putit in a blind trust,trade in mutual funds.- But it's not reallyhappening anytime soonand it's not hard to see why.I mean, we're talking about Congresshaving to regulate Congress.- The Speaker put forthreally a bill destined to failand the speaker has employedstall tactic after stall tacticin order to kind of keep delayingwhat's potentially a vote on any billthat would ban members ofCongress from selling stocks.(intense music)- The tragedy in all of this to meis that both our financial markets,as well as our entiredemocracy and societyare held together by a very importantand delicate thing called trust.- If we expect that to applyto our biggest corporationsand to our most successful citizens,it certainly should applyto our elected officials,especially at a time whenthere's a deficit of trust,between this city andthe rest of the country.- A democracy can only functionif we trust the people running it.And stuff like this,even if technically no rules were brokenin an evidence-based way,that undermines trust,it looks really bad.In January, a republican senatorwho was feeling very snarky,introduced the prevent election leadersfrom owning securitiesand investments act,which spells Pelosi.The Pelosi Act.Man, if there's one thingthat our elected officialsseem to be good at, it's these acronymsthat have like really fun optics,but like don't actually do anything.What this says to me is,"no, nothing's going to change",but it just shows the factthat we can like create a memeout of Nancy Pelosiand then dog pile over howinsider trading this all looks,even if there is nowrongdoing technically,that's the problem.The optics are the problem.Trust in our democracy is delicateand the optics actually matter.Trust matters.When we erode that trust,we erode our democracy.- If you, for example, aredriving down the highwayand you're going 55 miles an hour,but it's a 30 mile an hour zoneand you know you're onlygonna get a $5 ticket,well you might be driving 55 a lot.(upbeat music)- What do I do with all this paper now?Hopefully recycle it.Paper's very, very useful forme to understand information,so I do a lot of printing.Anyway, thank you all forwatching today's video.I wanna tell you about a couple things.Number one, this poster that I designedwith a bunch of map projections on it,this is something I'vethought about for years.I'm very excited to finallylaunch it to the world.It is a map poster aboutwhy all maps are wrongand it is these beautiful projectionson this really nice paper.It's just kind of a funart piece for map nerdsif you're into that.Also, we have LUTs and presets.If you are interested incoloring your photos or videos,you can do that with our LUTs and presets.That is what we use to color our stuff.I should also tell you aboutour community over on Patreoncalled the Newsroom.The Newsroom is a placewhere the communitysupports the journalism we are doing here.We are a big operation now.That is why we are ableto publish so often.And to do this kind of work,we more and more rely on thecommunity to help support us.So, thank you patronsover at the Newsroom.Newsroom members get anew video every monththat is only available to patrons.It is a behind the scenes vlogof just how we do whatwe do here in the studio.You also get access to my scripts,and a bunch of other things.But more importantly, you are here,a part of this ongoingdiscussion we're havingabout how the world worksand trying to be smarterand trying to be more informedand trying to be criticalthinkers in this day and ageof lots of information, someof it true, some of it not.So thank you for being here.Thank you for watching and Iwill talk to you soon, bye.(ominous music)
