Alabama GOP Rep. Spencer Bachus is head of the House Financial Services Committee
He was accused of using inside information to profit from the 2008 market collapse
Bachus was unanimously cleared by the Office of Congressional Ethics
The chairman of the House Financial Services Committee has been cleared of allegations that he used his position to engage in insider trading and improperly profit from the 2008 market meltdown.
The Office of Congressional Ethics unanimously dismissed all of the potential charges against 10-term Alabama GOP Rep. Spencer Bachus, according to a statement released late Monday by the congressman’s office.
The independent panel’s “unanimous dismissal of these false allegations is a welcome conclusion to a destructive and disruptive, media generated assault,” Bachus said in the statement. “It has been a long, painful, and frustrating experience to have a reputation built over many years sullied by untrue accusations.”
Noting the panel’s 6-0 vote, Bachus thanked its members for “coming to the right conclusion.”
“While their review and report should never have been necessary, I am pleased that they have helped clear my name,” he said.
The Office of Congressional Ethics, created after congressional Democrats won control of the House in 2006, is designed to serve as an initial check against alleged wrongdoing in Congress. Allegations considered worthy of additional investigation by the panel are passed on to the House Committee on Ethics.
Panel members, in keeping with their usual practice, declined to release any statement or speak about the matter.
The panel initiated an investigation of Bachus last year after noting several suspicious stock trades on the congressman’s financial disclosure reforms. Bachus allegedly ran afoul of Securities and Exchange Commission rules barring individuals from engaging in financial transactions based on “material, non-public” information.
Bachus’ stock trading activity, along with the financial investments of several other members of Congress, including House Democratic Leader Nancy Pelosi, was the subject of a book published last fall titled “Throw Them All Out” by Peter Schweizer.
Schweizer’s book was the basis of a “60 Minutes” segment on CBS in November, which raised questions about Bachus’ trades after he attended a September 2008 briefing by then-Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke where the two men warned top leaders of the dire situation facing U.S. financial markets.
As the top Republican on the Financial Services Committee, Bachus was part of a small group of lawmakers negotiating the unprecedented bailout for U.S. banks requested by the Bush administration.
After the CBS report aired last fall, Bachus strongly denied he was using any inside information and argued that any decisions he made about investments were based on what he read in the newspapers. He said that anyone paying attention to the news in the fall of 2008 was aware of the crisis that caused the market collapse.
After the media raised questions about whether lawmakers were using information received on Capitol Hill to enrich their personal portfolios, Congress passed legislation banning insider trading by House and Senate members, along with a number of executive branch employees.
Specifically, the Stop Trading on Congressional Knowledge (STOCK) Act makes clear that members of Congress, their aides and others cannot use inside information they learn on the job to trade stocks or other securities. Among other things, the measure requires public disclosure of any trades within 45 days. It also requires those reports to be made available online in a database that members of the public can search.
The measure also limits members of Congress and executive employees to participating only in initial public stock offerings that are available to the general public.
The law, passed on a bipartisan basis, was signed by President Obama in April.
CNN’s Deirdre Walsh contributed to this report.