Durbin cashed out on inside information: Sun-Times

posted at 12:15 pm on June 13, 2009 by Ed Morrissey

Dick Durbin managed to do all right during the stock collapse.  The senior Senator from Illinois and the Democrats’ number-two man in the upper chamber bailed out of the mutual funds that would shortly take a beating, moving his investments into Democratic contributor Warren Buffett’s fund, Berkshire Hathaway, just before the storm hit on Wall Street.  The Chicago Sun-Times and Bloomberg report today that the timing was no coincidence:

As U.S. stock markets plummeted last September, the Senate’s No. 2 Democrat, Dick Durbin, sold more than $115,000 worth of stocks and mutual-fund shares and used much of the money to invest in Warren Buffett’s Berkshire Hathaway Inc.

The Illinois senator’s 2008 financial disclosure statement shows he sold mutual-fund shares worth $42,696 on Sept. 19, the day after then-Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke urged congressional leaders in a closed meeting to craft legislation to help financially troubled banks. The same day, he bought $43,562 worth of Berkshire Hathaway’s Class B stock, the disclosure shows.

Altogether, Durbin sold investments worth $116,000 in September. By Oct. 2, he had invested $98,046 in Omaha, Neb.-based Berkshire Hathaway, the form shows.

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.

Durbin’s spokesman says that the September meeting revealed nothing of an insider nature, and that Durbin traded along with the market as the storm clouds gathered.  I wonder if the SEC would consider that a compelling alibi if it had been a Wall Street regulator who met with Paulson and traded like this the next day.  The Democrats in Congress would be screaming for his head in the latter example, but will surely remain silent as the graveyard about Durbin’s suspicious trading.

Chris Dodd also showed a remarkable talent for appreciating assets in a collapsing global economy:

A new appraisal of the Irish cottage owned by Sen. Christopher Dodd concludes that it is worth about three times as much as Dodd has been reporting on his financial disclosure forms.

The new value of the cottage, located on Inishnee in Galway County, is $658,000, according to Dodd’s 2008 financial disclosure form released today.

The appraisal was done by the same person who did the original one in 2002 when the 1,200 square-foot cottage was evaluated at about $190,000.

Dodd has been criticized for low-balling the worth of the cottage in his disclosure forms. Questions also have been raised about his original purchase of the cottage with a Kansas City businessman William Kessinger, who he met through long-time campaign contributor Edward Downe.

Michelle points out the trouble in this new evaluation by quoting Judicial Watch, which has pursued this matter:

Judicial Watch’s complaint alleges that Senator Dodd appeared at a hearing on behalf of Edward Downe, Jr. in 1993 to help Downe obtain a reduced sentence for violations involving tax and securities laws. In 2001, Dodd ultimately helped Downe secure a full presidential pardon for his crimes on President Clinton’s last day in office bypassing the normal pardon vetting process. In 2002, Dodd allegedly received a significantly reduced, below-market sales price, for a two-thirds interest in a property located in County Galway, Ireland, from Downe’s associate, William Kessinger. (Dodd already owned a one-third interest in the property.) Downe’s signature appears on the property transfer documents. He is listed as a witness.

(Judicial Watch has sought additional documents about this property from government authorities in Ireland.)

According to the complaint, Senator Dodd, Chairman of the Senate Banking, Housing and Urban Affairs Committee, allegedly failed to report the gift in 2002 and may have filed inaccurate Senate Financial Disclosure forms related to the property ever since, in violation of the 1978 Ethics in Government Act. The penalty for filing false financial disclosure forms is $50,000 and up to one year in prison.

“This seems a straight-up quid pro quo. Dodd helped his apparently crooked friend and seems to have received a cut-rate real estate deal on a property in Ireland in exchange. Moreover, it appears Dodd attempted to cover up the gift by failing to disclose it on his financial disclosure forms. To put it mildly, this type of behavior clearly does not reflect well on the United States Senate. We hope the Senate Ethics Committee does a thorough and speedy investigation. Federal prosecutors also need to take a look at this, as knowingly filing false financial forms is a crime,” stated Judicial Watch President Tom Fitton.

There seems to be more than one Democrat enriching himself through public service.  Of course, the Democrats did run on the “culture of corruption,” but ever since have been culturing and cultivating it.


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I’m shocked..SHOCKED!!

Round up the ususal suspects!!

durbin,pelosi,frank,dodd,obama,etc.

Party of Culture & corruption…..

portlandon on June 13, 2009 at 2:14 PM

Part of me throws up my hands in frustration, and that little voice inside, says….go for it. Just drink the kool aid, and wallow in ignorance. *sigh*

capejasmine on June 13, 2009 at 2:15 PM

SKYFOX on June 13, 2009 at 12:24 PM

I dunno. San Francisco, Marin, Contra Costa, Los Angeles, Santa Barbara counties seem to control the puppet strings in Arnold’s backyard.

Limerick on June 13, 2009 at 2:16 PM

I am thinking about quitting my job and joining the dark side.

Free stimulus money and free healthcare. No taxes.

Join me, you suckers.

faraway on June 13, 2009 at 2:17 PM

It will be discovered that Senators with a “D” after their name have been excluded from having to obey the laws that the rest of us peons have to adhere to, like not writing bad checks, being able to call people while they are eating dinner, and using insider info.

Beaglemom on June 13, 2009 at 2:25 PM

I have to agree with AnninCA on this story. There has to be more to this story than Durbin sold mutual funds on insider knowledge and then bought Berkshire stock. Berkshire stockholders lost money just like everyone else. Did Durbin know that the market in general would tank and would rather lose money in Berkshire stock rather than spreading his risk in a mutual fund? Doesn’t make sense.

Vince on June 13, 2009 at 2:33 PM

What’s the surprise? Like the corrupt Mullahs of Iran the corrupt socialists of DC are acting with impunity. Its going to take more than words and ballots to disabuse them.

elduende on June 13, 2009 at 2:36 PM

Wherre is law enforcement? Aren’t there any prosecuters who want to make their bones taking out a sleazeball politician anymore?

Iblis on June 13, 2009 at 2:50 PM

Not enough information to say whether he violated the law in this case. Plenty of information about him to say that he is a brownish turd with kernels in it. Comparing our troops to Gestapo was as low as any Democrat has gone in the war to destroy our country.

Ted Torgerson on June 13, 2009 at 2:55 PM

why did he buy berkshire hathaway!?

i guess there were irish cottages available at the time…

reliapundit on June 13, 2009 at 3:10 PM

Vince on June 13, 2009 at 2:33 PM

Yes,

The Berkshire fund (NYSE:BRK.A) almost exactly mirrors the DOW.

franksalterego on June 13, 2009 at 3:34 PM

Buffett increased his bank holdings in September, while openly pressing Congress to pass the bailout.

http://www.americanthinker.com/blog/2009/04/warren_buffett_profits_heavily.html

Maybe Durbin was part of this. It’s a little tinfoil hattish, but a lot of Dems have been benefitting from this mess.

juliesa on June 13, 2009 at 3:38 PM

They put people in jail for this kind of thing don’t they?

Terrye on June 13, 2009 at 3:43 PM

Somebody needs to nail these dirtbag political crooks and jail them.

rplat on June 13, 2009 at 3:48 PM

I’m shocked…SHOCKED!

You think republicans will ever use this..seeing that pelosi was going to drain the swamp?

ramrants on June 13, 2009 at 4:27 PM

He didn’t even do it right. He is losing about $15k on his Berkshire investment.

kangkim on June 13, 2009 at 4:56 PM

A corrupt Illinois Dem?

Get OUT!

Expect him to be re-elected with 65% of the vote anyway.

Sadly, and mainly because I live in Connecticut, I expect Dodd to squeak through too next year.

Blue States: “They may be shameless crooks, but they support Roe vs. Wade!”

Ugh…

SuperCool on June 13, 2009 at 5:07 PM

How could this bunch of lying crooks not lose in a landslide in 2010? Only IF the group of Republicans running against them were completely disorganized, too busy with in-fighting and jealous posturings over “the hot new girl” could the Dems win….

I’m sure we conservatives will come out just fine!

varnson on June 13, 2009 at 5:07 PM

. Did Durbin know that the market in general would tank and would rather lose money in Berkshire stock rather than spreading his risk in a mutual fund? Doesn’t make sense.

Vince on June 13, 2009 at 2:33 PM

Yes and no. He may have known and taken advantage of insider information that the market was likely to tanks without knowing to what extent and how widespread.
That wouldn’t make it O.K.

Itchee Dryback on June 13, 2009 at 5:26 PM

I still want someone to explain how a poor candidate gets him/her self elected to office and within a short few years are flaming millionaires…all the while being completely honest and without violating federal laws? Their salaries simply do not afford them the luxury of that much descretionary income.

They play fast and loose with IRS filings, and only decide to pay up when pressed. Why not violate a few other laws?

24K lady on June 13, 2009 at 5:28 PM

And that was bullhockey, too.

AnninCA on June 13, 2009 at 12:44 PM

soooorry totally OT but I had to laugh…trying to *ahem* clean up my language for my children and used “bullsh…I mean bull hockey puck!” and my girls laughed like loons. : )

Annietxgrl on June 13, 2009 at 6:17 PM

Sorry Ann… it would appear National Enquirer is correct now about 50% of the time…

+1

Annietxgrl on June 13, 2009 at 6:24 PM

Durbin cashed out. . . .

Please, Ed. No false hopes.

Dr. Charles G. Waugh on June 13, 2009 at 6:41 PM

If Dodd lowballed the value of the cottage on his disclosure forms, would he have been required to list the cottage as a taxable asset and thus lowballed the asset value on any Irish and/or US tax forms?
As for Durbin, just another corruptocrap Illinois politician.
Awfully funny that Paulson comes in and says three trillion has been siphoned from money markets anonymously in about five hours, and then Durbin magically, coincidentally and without any improper intent (for he most likely was planning to buy stock in Berkeshire for twenty years) sells his money market and invests with Warren Buffett’s company. What are the odds?
Why it’s almost like Obama not only surviving dirty Chicago politics but emerging as a saint.

eaglewingz08 on June 13, 2009 at 6:48 PM

I own some BHathawayB stock. It went from about 4100 in Sept. ’08 to about 2950 today. Doesn’t sound like Durbin had all that great inside info. Of course, if you only take a 25-30% hit instead of losing it all on some failing bank, I guess you call it a good day.

Christian Conservative on June 13, 2009 at 7:40 PM

Wherre is law enforcement? Aren’t there any prosecuters who want to make their bones taking out a sleazeball politician anymore?

Iblis on June 13, 2009 at 2:50 PM

Only if it’s a Republican…

massrighty on June 13, 2009 at 7:47 PM

Darn Republicans it! /* sarc */

desertdweller on June 13, 2009 at 8:48 PM

desertdweller on June 13, 2009 at 8:48 PM

Not my best syntax, you’re right!

massrighty on June 13, 2009 at 9:05 PM

I guess self-dealing is okay when the ‘self’ is a member of the privileged class (an elected official). The rest of us have to do as they say, not as they do.

I’m so sick of these criminal hypocrites.

redfoxbluestate on June 13, 2009 at 9:13 PM

Durbin’s worst ever!

http://www.youtube.com/watch?v=MqIlXfkylD4

massrighty on June 13, 2009 at 9:19 PM

Funny thing if this is true — it shows that politicians in DC, even when corrupt, are cheap. Come on — these guys are playing with TRILLIONS of OUR dollars and this corruptocrat is messing with a pidding $116k?

AZfederalist on June 13, 2009 at 9:32 PM

Never mind what the GOP is going to about this. This is the kind of stuff that the tea parties and Conservative candidates can use to fight back when the Dems trot out the old line about Republicans being just as evil. If they have to expose a Republican to make their points, they will expose three-fourths of the Democrat Congress!

Makes Palin’s idea about reforming and kicking all offenders out sound very refreshing. And I mean that in the sense that the Repubelicans who will not pursue this should go on turning a blind eye.

Paging Michael Steele, paging Michael Steele!

freeus on June 13, 2009 at 10:03 PM

Nothing will happen to them. The law does not apply to the democrats. Pelosi is still Speaker after saying the CIA lies and providing no proof. Obama never had to account for $200 million in bogus foreign campaign donations. He never had to answer for the Resco land deal. Rangel cheated on taxes. Gethner BLATANTLY cheated on his taxes. There’s no one left to enforce the laws. Obama has removed an Inspector General breaking all the rules in place and no one can stop that. Maxine Waters husband benefited from an inside track on TARP money for his banking dealings and no one said squat.

They enforce them on their enemies. It’s a weapon now and no one can stop them.

We probably should stop bothering to even report on the corruption. Most of the MSM already has. Anarchy is only a matter of time. I always loved Mexico.

BrideOfRove on June 13, 2009 at 10:04 PM

Martha Stewart was unavailable for comment

billypaintbrush on June 13, 2009 at 11:10 PM

We probably should stop bothering to even report on the corruption. Most of the MSM already has. Anarchy is only a matter of time. I always loved Mexico.

BrideOfRove on June 13, 2009 at 10:04 PM

I always wonder why the GOP does’nt ask the Latino’s what they are looking for when they come to America,due to the fact that what they support ie the Democrates will only bring Mexican standards to America.

heshtesh on June 13, 2009 at 11:13 PM

Durbin’s a filthy piece of garbage, but an insider trading conviction and jail sentence are simply too much to hope for. I am not emotionally equipped to deal with the inevitable dismissal of any investigation into this scumbag.

Nothing to see here…move along.

Jaibones on June 14, 2009 at 12:24 AM

Lets face it, America voted in the Best Government that money could buy. Clean sweep in 2010 and 2012 is the solution by ballot.

Only Third World nations do it by bullet or are We Third World now? If China refuses to buy any more T-Bonds, We could be by 2010 or if they cash them in We are there already.

old trooper2 on June 14, 2009 at 7:24 AM

$658,000 for a 1,200 square foot cottage??? What’s it got — a pot of gold in every room?

Blake on June 14, 2009 at 7:37 AM

I, too, AM SHOCKED, STUNNED, BESIDE MYSELF!

Could it be that these democrats are corrupt? It can’t be, they are the same party as my diety, Obama. No…no…no.

Cleveland Steamer on June 14, 2009 at 7:38 AM

Turban Durban is nothing more than your typical IL politician, corrupt to the core and shifty.

Dodd is a prime example of fecal matter that walks upright. He is the poster child of what is wrong with DC and not only should be voted out, but put in prison for lying and cheating on his taxes. What a POS.

Cleveland Steamer on June 14, 2009 at 7:40 AM

I, too, AM SHOCKED, STUNNED, BESIDE MYSELF!

Could it be that these democrats are corrupt? It can’t be, they are the same party as my diety, Obama. No…no…no.

Cleveland Steamer on June 14, 2009 at 7:38 AM

Turban Durban is nothing more than your typical IL politician, corrupt to the core and shifty.

Dodd is a prime example of fecal matter that walks upright. He is the poster child of what is wrong with DC and not only should be voted out, but put in prison for lying and cheating on his taxes. What a POS.

Cleveland Steamer on June 14, 2009 at 7:40 AM</blockquote

Excellent sarcasm. Excellent analysis. Couldn’t of said it better myself.

Jeff from WI on June 14, 2009 at 7:57 AM

While coming late to this game, it is a reminder of what happens to people that go to Washington DC. Considering what life is like in IL he seems to be the extension of the corruption that has now permeated into the highest levels of government. They used to keep it a secret, but now the Democrats just throw it in the faces of the American people every day. The Republicans just sit there and take it. Party time is coming up and it just adds fuel to the fire. The more corruption the more we need to speak up. This cannot stand.

BetseyRoss on June 14, 2009 at 12:57 PM

Shoemaker said Durbin didn’t capitalize on anything Paulson and Bernanke told congressional leaders at the Sept. 18 meeting.

Whatever information Paulson gave lawmakers wasn’t secret or classified and was disclosed publicly the next day, Shoemaker said.

This is what is known as the ‘five second rule’. Five seconds after public disclosure, it is legal to trade a position.

No comment from the Durbin camp on why his personal money was bet against the public money he has governance over.

Why would anyone vote for a guy who promises to screw you if he gets a chance?

percysunshine on June 14, 2009 at 4:31 PM

I am thinking about quitting my job and joining the dark side.

Free stimulus money and free healthcare. No taxes.

Join me, you suckers.

faraway on June 13, 2009 at 2:17 PM

Actually that’s very hard to do. First thing is the headaches you’ll get being forced to spout mind numbingly illogical thoughts. Second, there’s the sickening feeling you’ll get knowing you’re a parasite bleeding this country dry while you sit on your…er..well…waiting for handouts. Then there’s the slow physical change that’ll turn you ugly like Pelosi or Waxman.

Jeff from WI on June 15, 2009 at 9:40 AM

Corrupt Ill. politicians couldn’t be in power without corrupt voters. The state is overrun with them and has been for centuries. There’s no way to clean out a rats nest like Illinois because their citizens are scum too.

Jeff from WI on June 15, 2009 at 10:08 AM

What Durbin did was beyond the pale.

He cashed out immediately upon learning news which would tank the market.

Then he, also immediately, invested in Bershire Hathaway at a time when Warren Buffett said Berkshire would invest $5 billion in Goldman Sachs if Congress approved TARP, which Durbin dutifully sought to accomplish.

If Kay Bailey Hutchison or Jeff Sessions had done this, the MSM would be playing the story non-stop.

molonlabe28 on June 15, 2009 at 12:49 PM

Rush is reading this story, and named Ed & HA as reporting this.

ladyingray on June 15, 2009 at 1:35 PM

I’m not sure what the story is here. Durbin’s spokesperson said “Whatever information Paulson gave lawmakers wasn’t secret or classified and was disclosed publicly the next day” – the day that Durbin made his sale.

So unless there’s evidence that there was secret or classified information in the Paulson meeting (which the article does not suggest is the case), what’s the problem? At worst, Durbin made decisions on information from the meeting, but waited until after the information from the meeting was made public to do so. How is that corruption?

Frankly, your headline does not reflect what is said in the Sun-Times story. The story specifically says it was not “inside information”. You should probably change the headline before you hear from Durbin’s lawyer.

orange on June 15, 2009 at 3:10 PM

Comment pages: 1 2