WASHINGTON – The chairman of the House Financial Services Committee said Friday he is cooperating with an ethics panel's investigation of his stock trades and expects to be exonerated.
Rep. Spencer Bachus, R-Ala., said the independent Office of Congressional Ethics requested information about his trades. He insisted he did nothing wrong.
"I welcome the opportunity to set the record straight," Bachus said. "I respect the congressional ethics process. I have fully abided by the rules governing members of Congress and look forward to the full exoneration this process will provide."
The Washington Post first reported the investigation into possible violation of insider trading laws.
Bachus' committee oversees the financial services industry, and its members would be privy to the kind of financial information that would be useful in stock trades.
Both houses of Congress in the last week passed bills that would explicitly bar members of Congress and thousands of executive branch officials from insider trading, using nonpublic information learned during official duties.
Congress took action because of a segment on CBS' "60 Minutes" last November. The show said lawmakers were trading stock based on nonpublic, inside information -- and Bachus was one of the lawmakers featured.
The show noted that in mid-September 2008, top U.S. financial officials held closed-door briefings with congressional leaders and warned them of a pending global financial meltdown. Bachus attended as the ranking Republican member of the committee, the show said.
The next day, the show said, Bachus bought stock options based on the briefings.
The Office of Congressional Ethics is an independent House panel that is run by a board of directors who are outside Congress, although some are former members of Congress. The OCE's investigative reports and recommendations for further investigation go to the member-run House Ethics Committee, the panel that decides whether rules were violated.
Bachus did well on a stock option in 2007 after betting that a Chinese advertising company would jump in value.
In a single transaction on Dec. 10, Bachus made up to $15,000 off an investment he had held for just two weeks, according to his congressional financial disclosure statement. He sold on the same day the company, Focus Media Holding Ltd., got a market bounce from the announcement that it would acquire a competitor.
The trade was among dozens made in 2007 by the powerful congressman, whose public statements alone can influence markets. Most of his trades were short-term options in which Bachus bet that a stock price would rise or fall and made a quick profit or loss accordingly.
Sometimes, he made several trades in the same week.
Bachus' rapid-fire trades, however, are unusual for a leading member of Congress, particularly one with such a key market role.
The congressman, who represents Birmingham, is in his 10th term.