Posts Tagged ‘oversight’

Congressional Staff Profit From Suspicious Trades

Monday, October 11th, 2010

If you invest because you know a government bill benefiting a certain industry is going to pass soon, does that make you an inside trader?

  • You may be surprised to learn that insider-trading laws don’t apply to Congress. Some lawmakers have tried to change that with the STOCK (Stop Trading on Congressional Knowledge) Act, but there hasn’t exactly been a lot of momentum to get that law passed.
  • The Wall Street Journal went through financial records of Congressional aides and found that many were trading in stocks whose prices were directly or indirectly impacted by the legislative activities of their bosses. The finance and energy sectors were especially popular among Congressional traders.
  • Because aides don’t technically make the decisions that determine whether laws are passed, some say there is no real conflict of interest. But both members of Congress and the highest-paid Congressional aides (about 11% of all aides) are required to make the details of their personal finances public.

Facts & Figures

  • In 2008 and 2009, 72 Congressional aides have traded stock in companies overseen by their bosses
  • Some of the higher-paid aides earn salaries of $170,000 per year

Best Quote

“Congressional staff are often privy to inside information, and an unscrupulous person could profit off that knowledge. The public should be outraged there is no law specifically banning this.” – Vincent Morris, Spokesman for Rep. Louise Slaughter (D., N.Y.)

New Charities: Helpful Or Excessive?

Monday, January 4th, 2010

The rapid growth of the number of charitable organizations is raising some red flags for some.

  • There is concern that some nonprofits are exploiting the IRS’s broad definition of what constitutes a 501(c)3 organization.
  • The issue isn’t whether the charities are fraudulent as much as whether the applicants are following state and federally-mandated regulations and laws.
  • The IRS stands by its streamlined process that distinguishes between small and large organizations.

Facts & Figures

  • Last year the IRS approved 99% of all applications for public charity status (that’s more than one every 10 to 15 minutes!)
  • In 2008, $300 billion was donated to charities which cost the federal government more than $50 billion in lost tax revenue.
  • The tax code defines public charities as organizations that are “religious, educational, charitable, scientific, literary, testing for public safety, to foster national or international amateur sports competition or prevention of cruelty to animals.”

Best Quote:

“It just seems utterly implausible that anyone can be doing due diligence in any way that constitutes a serious review of the applicant, let alone keeping an eye on them after they are approved. Why bother to have a review at all if you only reject 0.5 percent of the applicants?” – Rob Reich, Associate Professor of Political Science at Stanford

Regulation is…

Tuesday, October 20th, 2009

Regulation is when government or other agencies supervise companies to control certain behaviors and activities. For example, the Environmental Protection Agency supervises companies and organizations to make sure their activities don’t negatively impact the environment through pollution or irresponsible use of resources.