For Hill’s investors, few Capitol gains
Stock losses common
on lawmakers’ financial forms
By John Lancaster and Edward Walsh
THE WASHINGTON POST
WASHINGTON, June 15 — Last year was painful for stock market investors, but if it’s any consolation, many members of Congress also were caught up in the turmoil.
Despite the battering some portfolios took on Wall Street, Congress still includes a number of multimillionaires.
JUST AS ORDINARY INVESTORS were seduced, and then betrayed, by the fleeting promise of technology firms such as Cisco and Lucent, many lawmakers also lost bets on the New Economy, according to annual financial disclosure reports released yesterday.
The losses did not discriminate by party or rank. Victims included Senate Minority Leader Trent Lott (Miss.), Sen. Bob Graham (D-Fla.) and Senate Energy Committee Chairman Jeff Bingaman (D-N.M.), whose tech-heavy E-Trade account lost as much as half its value in little over six months.
House Budget Committee Chairman Jim Nussle (R-Iowa), who each year helps decide how to spend almost $2 trillion in taxpayers’ money, was among the most aggressive traders in Congress, listing 78 stock transactions in 2000. They produced a net loss of $16,500.
Such is the portrait that emerges from yesterday’s flood of financial disclosure statements, which each member of Congress is required to provide annually.
The statements describe members’ assets, liabilities and income within broad ranges. They also show travel paid by outside interests and speech income, which lawmakers are required to donate to charity.
DIVERSIFIED PORTFOLIOS
For the most part, lawmakers active in the market avoided the temptation to place all their bets on technology, and most are well-positioned to recover from a bad investment year that afflicted professionals and ordinary investors alike. Some — like Rep. Spencer Bachus (R-Ala.), who made tens of thousands of dollars trading oil company stock options — profited handsomely from the volatile climate.
• Bush Aide Met Executives Seeking Merger
• Daschle Appears Methodical in Financial Affairs
• Top Bush Adviser Moves to Sell Stocks
• Bush Aides Disclose Finances
Others, generally of relatively modest means, took a more cautious approach to personal finance. Senate Majority Leader Leader Thomas A. Daschle (D-S.D.) avoided big gains or losses by keeping most of his money in mutual funds or old-fashioned real estate. Sen. Robert C. Byrd (D-W.Va.) still stores much of his wealth in bank accounts.
Despite the battering some portfolios took on Wall Street, Congress still includes a number of multimillionaires. Some are familiar faces, such as Sen. Edward M. Kennedy (D-Mass.), and others are members of this year’s freshman class, such as Sen. Jon S. Corzine (D-N.J.), a former investment banker whose liquid assets include a money market account of $5 million to $25 million.
On the other hand, some in Congress are financially stretched. Rep. Jack Quinn (R-N.Y.) reported assets of $17,000 to $150,000, and yearly obligations of $40,000 to put his children through college and law school.
Among those who rode the high-tech stock bubble up and then down was freshman Sen. Maria E. Cantwell (D-Wash.), who spent her own money lavishly to win election last year. Cantwell, a founding executive of RealNetworks Inc., a Seattle software company, reported receiving $10.8 million in salary and from exercising company stock options last year. But Cantwell put much of that into her campaign while the value of her RealNetworks stock was plunging.
As a result, Cantwell reported that she owes between $1.5 million and $6 million in bank loans stemming from the campaign. Still, she has something to fall back on: While her net worth suffered during the high-tech stock decline, she owned RealNetworks stock and options valued at $5 million to $25 million.
CLINTON: HEAVY DEBTS
In contrast, the financial disclosure statement of another new senator, Hillary Rodham Clinton (D-N.Y.), was most notable for the debts it reported. Clinton disclosed that she and her husband, former president Bill Clinton, have $50,000 to $100,000 in a joint checking account and other modest holdings. But she reported that her husband owes $1.2 million to $5.6 million in legal fees to four law firms, and that they jointly owe $1 million to $5 million to a fifth law firm, Williams and Connolly of Washington.
Some lawmakers chalked up big gains. Catherine Stevens, wife of former Senate Appropriations Committee chairman Ted Stevens (R-Alaska), made between $100,000 and $250,000 in four weeks on Alaska Communications System stock received from her family investment company in Anchorage.
Advertisement
Bingaman was not so fortunate. At mid-year, he embarked on a spending spree in his E-Trade account, investing between $250,000 and $500,000 in nine companies in May, June and July. By year’s end, the market value of the stocks in his E-Trade account had dropped to between $100,000 and $250,000.
Lott’s stock portfolio includes more than a half-dozen companies that have been hit hard by the technology slump, including Cisco and Lucent Technologies. Last September, for example, Lott bought 100 shares of Lucent when it was trading around $30 per share; the price has dropped to around $7.
Graham, the Florida Democrat who chairs the Senate intelligence committee, could have used better information when making investments last year. In the year’s first quarter, Graham bet on three tech companies, America Online, Citrix Systems and Oracle Corp., buying between $15,000 and $50,000 in each stock. In the last three months of the year, he sold the stocks for between $1,000 and $15,000, for an apparent loss.
NOT SO WEALTHY IN THE HOUSE
House leaders once again reported relatively modest holdings. House Speaker J. Dennis Hastert (R-Ill.) reported assets worth between about $400,000 and $1 million, including a town house in Washington and a 75 percent interest in an “opera house” property in Illinois. Hastert sold a farm in Shipman, Ill., in December for between $250,000 and $500,000.
House Democratic leader Richard A. Gephardt (Mo.) inherited several assets from his wife’s parents and listed a total of 31 stock funds worth between $200,000 and $900,000. House Majority Leader Richard K. Armey (R-Tex.) listed no investments or assets and had one liability, a line of credit of less than $50,000.
Majority Whip Tom DeLay (R-Tex.) reported a liability of between $250,000 and $500,000 from a campaign finance civil suit filed against him by the Democratic Congressional Campaign Committee. The suit was settled earlier this year. Delay reported gifts totaling $8,711 to his legal expense fund. He also reported selling stock in Exxon Mobil that produced between $15,000 and $50,000 in income.
Democratic Whip David Bonior (Mich.) listed assets worth less than $200,000 and reported taking eight trips paid for by outside groups, including one to India.
Sen. Robert Torricelli (D-N.J.), whose finances have come under the scrutiny of the FBI and the Justice Department, received an extension to file his disclosure report. The report from Rep. James A. Traficant Jr. (D-Ohio) suggested he has little beyond his lung power to fight the federal racketeering and bribery charges that were brought against him last month.
Traficant, who has vowed to “fight like a junkyard dog in the face of a hurricane” to avoid jail, reported few assets. He said that last year he still owed the IRS between $10,001 and $15,000, an improvement over 1999, when he owed between $15,001 and $50,000.
The disclosure reports provided glimpses into the backgrounds and interests of some lawmakers. For example, a blind trust provided between $5,001 and $15,000 in income for Sen. Fred Thompson (R-Tenn.), but his training and career as an actor continued to reap benefits. Thompson earned $16,500 for radio appearances for “Face-Off”, approximately $21,000 in residuals and wages from film and TV appearances and a Screen Actors Guild pension valued at between $500,001 and $1,000,000.
A few lawmakers boasted unusual sources of income: Rep. David Dreier (R-Calif.) received $300 for appearing in a Showtime movie, “The Last Debate,” based on the novel by PBS anchorman Jim Lehrer, and donated it to charity. Rep. Sherwood L. Boehlert (R-N.Y.) took in between $1,000 and $15,000 as a partner in Utica Baseball Club Ltd., which operates the Utica Blue Sox minor league team.
Some congressmen own investments that were in line with their policy proposals. Rep. Ron Paul (R-Tex.), who for years has advocated use of gold and silver as the nation’s sole legal tender, has substantial investments in silver, gold and copper ventures, as well as rare coins.
The 2000 financial disclosure report of Sen. Joseph R. Biden Jr. (D-Del.) showed that he apparently has taken the frequent advice of financial planners to pay down high interest credit card debt.
In 1999, Biden reported a MasterCard credit card debt of between $15,000 and $50,000 and was paying close to 25 percent annual interest. In Biden’s most recent financial disclosure report, the MasterCard debt has disappeared, apparently replaced by two lines of credit at a Wilmington, Del., bank. His interest rate is at or near the prime rate, currently 7 percent.
Staff writers Juliet Eilperin, Mary Pat Flaherty, James V. Grimaldi, George Lardner Jr., John Mintz, Eric Pianin, Susan Schmidt and Ben White, and staff researchers Lynn Davis, Madonna Lebling and Alice Crites contributed to this report.
© 2001 The Washington Post Company |
