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Should Insider Trading Laws Apply to Congress?

This is a RUSH transcript from "The O'Reilly Factor," November 21, 2011. This copy may not be in its final form and may be updated.

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BILL O'REILLY, HOST: Now for the "Top Story" tonight. A new book called "Throw Them All Out" by Peter Schweizer. The book chronicles the huge problems in Washington in very specific ways. Recently "60 Minutes" spotlighted the book with CBS correspondent Steve Kroft confronting Nancy Pelosi. Apparently she and her husband have made money trading on stocks, IPOs.

(BEGIN VIDEO CLIP)

STEVE KROFT, CBS NEWS CORRESPONDENT: Do you think it's all right for a Speaker to accept a very preferential, favorable stock deal.

REP. NANCY PELOSI (D), MINORITY LEADER: Well, we didn't.

KROFT: And that you participated in the IPO.

(CROSSTALK)

PELOSI: Well, I have many investments.

KROFT: And at the time you were Speaker of the House. You don't think it was a conflict of interest or have the appearance of a conflict of interest.

PELOSI: No. It only has the appearance if you decide that you are going to have -- elaborate on a false premise. But it's -- it's not true and that's that.

(END VIDEO CLIP)

O'REILLY: Mr. Kroft also challenged Speaker of the House John Boehner about pretty much the same thing.

(BEGIN VIDEO CLIP)

KROFT: You made a number of trades going back to the health care debate. You bought some insurance stock. Did you make those trades based on non-public information?

REP. JOHN BOEHNER (R-OH), HOUSE SPEAKER: I have not made any decisions on day-to-day trading activities in my account and haven't for years. I don't -- I do not do it. I haven't done it, and wouldn't do it.

(END VIDEO CLIP)

O'REILLY: Mr. Boehner then called the "60 Minutes" report "idiotic". Here now aforementioned Steve Kroft and Peter Schweizer. Mr. Schweizer, let's begin with you. What's the headline of the book?

PETER SCHWEIZER, AUTHOR, "THROW THEM ALL OUT": I think the headline of the book is that we have in Washington a permanent political class that enriches itself with inside information access to taxpayer dollars. And part of the reason that we're not getting much movement in Washington or there is not much of a sense of urgency is that they are doing very well and they like the status quo the way things are.

O'REILLY: Ok, but the status quo is not going to change. Everybody knows that. But I found it interesting, Steve, that when you confronted Pelosi and Boehner they both denied any wrongdoing at all. Now, you post it as a question. You didn't make it an accusation.

KROFT: Right.

O'REILLY: Are you, based on the "60 Minutes" research, are you convinced that Mrs. Pelosi and Mr. Boehner did something wrong.

KROFT: Well, they didn't -- it's not illegal. It's not wrong under the way Congress operates. The question is whether it should be. I personally and I think a lot of people were upset about the fact that the Speaker took a very lucrative IPO from somebody who had a major piece of legislation moving through the Congress that would have affected (INAUDIBLE) that would have affected the credit card company.

(CROSSTALK)

O'REILLY: Now explain -- explain to the folks, were you offered the IPO? Was I offered the IPO?

KROFT: No.

O'REILLY: No.

KROFT: Well, you could -- you might have if you knew about it in advance and you wanted to fill out a lot of paperwork, chances are the normal ordinary person couldn't get it.

(CROSSTALK)

O'REILLY: All right, so she new or her husband more likely, right.

KROFT: Right.

O'REILLY: Her husband knew --

KROFT: Right.

O'REILLY: -- that this IPO, this was an initial stock offering, was going to be released and her husband bought it and you believe that Mrs. Pelosi knew about it?

KROFT: Well, this is my position. And it's not -- well, it's not my position. It's the reason I raised the question. Is that if you are Speaker of the House, you should not be in a position or taking money or participating in a situation that's going to raise you money if you are facing a potential conflict of interest in the House.

(CROSSTALK)

O'REILLY: Ok so it doesn't matter whether it was a husband or whether it was her dog or whether it was her chamber maid, if there is an appearance she should just not do it.

KROFT: Look. Congress pass laws, conflict of interest laws and guidelines.

(CROSSTALK)

O'REILLY: Right.

KROFT: -- against the federal judicial system. You can't -- you couldn't do this kind of stuff if you were a federal judge and against people in the executive branches. But somehow the law doesn't apply to them. There is a gap.

O'REILLY: Ok Mr. Schweizer, unlike Mr. Kroft, you don't have to be objective you can give your opinion. Boehner flat out says I haven't bought a stock for eons of my own. My managers, you know, I guess essentially that's who buys it. So why are you bothering me and this whole "60 Minute" report was idiotic. And I have nothing to do with it and you say?

SCHWEIZER: I say the problem is a double standard. The rest of America has to abide by insider trading laws. Congress does not. They don't have to worry about conflict of interest.

O'REILLY: Yes but if he didn't know. I don't know what my accountant Swift (ph) is buying.

SCHWEIZER: Right.

O'REILLY: I mean, I just tell him keep me out of jail.

SCHWEIZER: But that's the Speaker of the House.

O'REILLY: No that's true. I should be but I'm not. But -- but I'm going to cut these guy as little slack because if, indeed Boehner has people investing on behalf of him and his family how would he know?

SCHWEIZER: Well, here is what I would say if it was John Boehner's CEO or Nancy Pelosi's CEO and the SEC sought a pattern of trades.

(CROSSTALK)

O'REILLY: Did you see pattern of trades?

SCHWEIZER: In Boehner's case he bought five health insurance company stock a few days before the public option was killed. And there are numerous other examples of other members.

O'REILLY: That's not good.

SCHWEIZER: And yes. And my point is this. If they were a CEO and the SEC saw a pattern.

O'REILLY: They'd be in on it.

SCHWEIZER: The SEC would investigate. And if the CEO said well, my broker did it the SEC wouldn't just ok that's fine we'll move on. They would investigate it.

KROFT: This is -- let me -- just frame it.

O'REILLY: Sure.

KROFT: Nail it down. Should -- do you want the Speaker of the House or anybody in Congress voting on health care legislation when they have a direct rule on the outcome?

O'REILLY: No I think that you ought to put their stuff in blind trusts and have nothing to do with it while they are in office. That's what I think.

SCHWEIZER: Exactly, yes.

O'REILLY: Ok, that's easy. Now John Kerry one of the wealthiest members of the Senate, you got him doing bad stuff. What is he doing?

SCHWEIZER: Well, in his case it's mostly his wife's investment funds. They have a management team. His position is similar to Boehner he says he has no involvement with the investment decisions. But again in his case what we saw was a pattern of heavy trading on health insurance company stock during Obama care debate when he was helping to shape that legislation and also in 2003, during the prescription drug benefit plan.

Do I know for a fact that information was transferred from him to the investment advisors, no, I don't. But again, the question is the standards --

(CROSSTALK)

O'REILLY: The appearance of it is not good. Ok.

SCHWEIZER: Would be disconcerting, yes.

O'REILLY: All right and on the face of everything that's happened, bad economy, $1 trillion -- $15 trillion debt and these guys are, you know, making good money, and you just -- you just give example after example after example.

SCHWEIZER: Yes. There are numerous examples in the stock trading and also in land deals where they will buy a piece of land. They will put an earmark to literally build a road right next to it and then they sell it. This is also legal and ethical according to the standards of Congress.

O'REILLY: So we need a total revision of financial laws pertaining to Congress is what we need?

KROFT: We need something. I think that one of the things that we focused on our story is this thing called the stock gap (ph).

O'REILLY: Right. Ok, I think we need a total revision. All right, gentlemen very interesting. Thanks very much.

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