Former Speaker of the House–and current Minority Leader–Nancy Pelosi apparently bought $1 million to $5 million of Visa stock in one of the most sought-after and profitable initial public offerings (IPO) in American history, thwarted serious credit card reform for two years, and then watched her investment skyrocket 203%.

The revelation appears in Throw Them All Out, the new book by investigative journalist and Breitbart editor Peter Schweizer, which was the focus of 60 Minutes on CBS this evening, and which is featured in this week’s issue of Newsweek.

Schweizer’s investigation of Pelosi and other members of Congress–from both parties–raises a critical question:  should it be legal for lawmakers to buy stocks in companies directly affected by their legislative efforts?

In early 2008, Nancy Pelosi and her real estate developer husband, Paul, were given an opportunity to buy into a Visa IPO. It was a nearly impossible feat–one that average citizens almost certainly could never achieve. The vast majority of purchase opportunities went to institutional investors, large mutual funds, or pension funds.

Despite Pelosi’s consistent railing against credit card companies, on March 18, 2008, the Pelosis bought between $1 million and $5 million (politicians do not have to report the exact amounts, only ranges) worth of Visa stock at the IPO price of $44 per share. Two days later, the stock price rocketed to $65 per share, yielding a 50% profit. The Pelosis then bought Visa twice more. By their third purchase on June 4, 2008, Visa was worth $85 per share.

How did Nancy Pelosi snag one of the most coveted initial public offerings in history? The facts are still emerging. Yet according to Schweizer, corporations that wish to build congressional allies will sometimes hand-pick members of Congress to receive IPOs. Pelosi received her Visa IPO almost two weeks after a potentially damaging piece of legislation for Visa, the Credit Card Fair Fee Act, had been introduced in the House. If passed, the bill would have cut into Visa’s profits substantially by lowering so-called “interchange fees,” the 1% to 3% charge retailers pay Visa when customers use Visa cards for purchases. Interchange fees are a critical source of revenue for the four credit card companies–$48 billion in 2008, to be exact.

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In the wake of the debt ceiling negotiations that paralyzed Washington for weeks and the ensuing last-minute deal that has been criticized by many on the right for failing to change the way Washington spends money, it looks like Republicans supportive of pending natural gas subsidy legislation are eager to avoid shining too much light on the bill – which makes sense considering it distorts the energy market by using taxpayer money to pick winners and losers in the natural gas industry.

Last Wednesday, the House Ways and Means committee abruptly cancelled a scheduled hearing on the NAT GAS Act. From Politico’s Morning Energy:

NOT ON TODAY’S AGENDA
House Ways and Means has postponed its hearing on energy tax policy, putting off a potentially testy intra-Republican squabble over the NAT GAS Act to subsidize natural gas vehicles.

What is the NAT GAS Act? Well, it’s right in line with the Obama Administration’s overreaching regulatory agenda, but because some Republicans favor it the blame can’t be laid at the foot of Obama and the Democrats. From an earlier post on Washington’s war on businesses:

-An item that’s technically legislation, not regulatory rulemaking, but stands to pack the same economically ruinous punch is the NAT GAS Act (H.R. 1380) which heavily subsidizes businesses and consumers who switch to natural gas-fueled vehicles directly benefiting billionaires T. Boone Pickens and George Soros at the taxpayers’ expense. The subsidies – ahem, ‘tax credits’ – come in at a whopping $7,500 per passenger car, $64,000 for heavy-duty trucks and 18-wheelers, and up to $100,000 for gas stations installing natural gas pumps.

Referring to government subsidies as ‘tax credits’ is the oldest trick in the book to rally Republican support for a liberal proposal, and in this case it worked. Although some Republicans have pulled their support for the bill, over 70 GOP Members of Congress are on record as still supporting the bill.

So, qui bono?

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