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.
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.