discussion, are am not going to get engaged in these kinds of debates. there's something protective about the traditionalism of that role. now of course she is playing a more prominent role in the presidential message which is what she wanted in the first place. >> host: these are odd moments and endearing that she displays. moments of sort of real vulnerability. there's one episode you describe where she is wearing normal shorts to go to the grand canyon and robin givens of the post said they were not normal shorts and wondered if she was letting the team down. how do you sort of way the balance of vulnerability and fierceness that alternate in the book? >> guest: that is part of what i think is so fascinating. a part of the reason i think that -- banish the phrase angry

black woman from the culture. now we from this book. part of the reason that caricature of her is so wrong is it mixes vulnerability and the anxiety. that is the word better aid you the. they don't call her angry. they caller anxious. the point in my reporting where i found her really feeling was after the scott brown victory. scott brown, republican in, wins ted kennedy's a seat in a devastating consequence for the president's legislative agenda. it is all in jeopardy now. she has two issues with her husband's team. when is she doesn't understand how they could have let this happen. how they could have dropped the ball in the race. the other issue which is -- goes to the heart of a role she plays in the presidency is she has always had this idea that her

husband is going to be a trans formative president. she never likes politics. it has always been if you're going to go into politics you have this lofty vision of who you're going to be and the administration made these health care deals like the nebraska one that were very unpopular and barack obama was starting to look like a more ordinary politician and that is what she was reacting to so that is why the partnership is so interesting. not that we are delving into the dirty secrets of their marriage but looking at her vision of the presidency and what she steak some to and the standard she has and whether to meet them. >> you can watch this and other programs online at booktv.org. up next, peter schweizer

contends that members of congress profits from insider trading and used political influence for their financial gain. this is just over an hour. >> host: thank you for joining us. we welcome those who join us on our heritage.org web site and ask everyone in house if he would be so kind to turn off cellphone as we begin especially for those recording our events today. we will post the program within 24 hours on our web site for everyone's future reference as well. our guest today is peter schweizer legal research fellow at the hoover institution at stanford university from 2008 to 2009. he served as a consultant to the white house office of presidential speechwriting and as a former consultant to nbc news. have you lived at down? among his previous books are the reagans -- the bushes:portrait

of a dynasty. reagan's war,'s or if his 40 a struggle and final triumph over communism and do as i say. about as i do:from files on liberal hypocrisy. that book was on the new york times best-seller list for eight weeks. and our love is quote. the economist magazine pronounced do as i say ninth biggest selling political book on the entire planet in november of 2005. additionally executive producer of in the face of evil, and epic documentary based on his book reagan's war which won the 2004 liberty film festival. if you will ask the writer, steve banyan who is with us today, is the greatest film ever written. today we focus on his newest book, "throw them all out," in which he examines the way the system works on capitol hill. or perhaps more aptly the way

capitol hill works the system. please join me in welcoming my friend peter schweizer. [applause] >> thank you for that introduction. great to be back at the heritage foundation talking about this book and nice to be back in washington d.c.. i live in florida and don't know how many people here that live in d.c. realize it but your the wealthiest communities in the united states. past silicon valley in terms of net income. washington d.c. has that in command seven of the ten wealthiest counties in the united states are counties that border washington d.c. and i think those two statistics are indicative of the problem we face today and the subject are am here to talk about today which is crony capitalism. where -- what do i mean by crony capitalism? how is it different from free-market capitalism? let me describe it by giving it

a couple examples. free market capitalism i give as an example of that would be steve jobs, the late founder of apple computer. he joined with the occupy wall street crowd would call the 1% by doing what? creating products and services that people wanted to buy. people desired apple products and he became very wealthy. that is an example of my mind of free-market capitalism. steve jobs did not have hardly any lobbyists. he was not active politically. it was a voluntary purchase people made of his goods and products that made him a wealthy man but crony capitalism is less interested in the exchange. they make money out of the political system. not creating innovative product or services that having political connections which allow them to get government products and get sides in the tax code, guaranteed government loans and guaranteed government grants and access to inside information that will help them

on investment decisions. these are the two sort of archetypes that exist in america today and my fear and concern is we are increasingly moving in the direction of the crony capitalists in the way of the crony capitalists with steve jobs being an example. there are a couple different areas. on the inside of this is a lot of politicians and how they extract their wealth through this crony capitalism. i want to talk about people on the outside or politically connected and how they're able to effectively milk the system and use their crony connections to enrich themselves at our expense. finally i want to talk about what are some possible solutions and does this really matter? we have always had politicians that have taken money under the table and got rich and always had the railroad barons of the nineteenth century who cuts sweetheart deals with the

government. should we care about this? you can probably guess given that i wrote a book about the answer is absolutely yes. this is a profound issue we face in america in the twenty-first century so let's talk about politicians first. america is supposed to be self-governing. the notion we send individuals to washington who are supposed to represent ourselves that it is supposed to be a citizen legislature. about 67 years ago that started to change and we have a situation now where elected officials can not only perform public service but they perform public service relatively middle-class and they leave very wealthy. let me give you two recent examples from people, one from each party because this is a bipartisan issue. this is a problem of human nature, not one political party or the other. nancy pelosi, speaker of the house in san francisco.

when she came into congress her net worth was $3 million. in the 20 years she served in congress after that her net worth had gone up 876% which means if you do it on a compound basis you're averaging a return on your investment every year. having george soros or warren buffett would kill for that kind of return on investment. so a dramatic increase in wealth. i will argue at least part of that, large part of that is connected to her political position. what about a republican? the speaker of the house immediately before her was dennis pastor from illinois. dennis have stirred when he became speaker in the 1990s had a net worth around $300,000. when he left as speaker less than a decade later it was in the millions. it could potentially have been $11 million. he didn't inherit money. he didn't win the lottery.

it is a function of leveraging his position in order to enrich himself. those are two individuals but there are others i talk about in the book. i name people from both political parties and this information comes from their public financial disclosures and comparing their activities with what they're working on in terms of legislation and with assets they might have to sensitive information. how does this work? how is the elected officials are able to leverage their position and make money? the first example i would give is the ipo which i would consider a form of legalized bribery. let me give you an example of this. let's say john is in the united states senate. i coming to his office and me a favor and i say i need a favor. here is a shoe box with $10,000 cash. i appreciate your help. what is going to happen? we will go to jail. status bribery. i am giving him cash in exchange for good. that doesn't happen so much in

washington anymore. you hear about congressman jefferson who put $90,000 in his freezer but that is the exception to the will and frankly that form of illegal draft is really small potatoes. you can make a lot more money if you play it right engaging what i consider legal graft. let's assume i go into senator john's office but instead of bringing a shoebox of cash i say i need a favor. i am concerned about a piece of legislation and by the way i am involved in this company and i am going to give you access to initial public offering shares of stock. you're able to buy these at $20 a share and the next day when they go public they will sell for $50 a share and you can turn around and sell them the next day and you could make $100,000. that is perfectly legal and that scenario goes on frequently in washington d.c.. here is the challenging part. when congressman and senators

engage initial public offering purchases of stock they don't have to disclose it as such. a list it as another stock transaction. when you are going through financial disclosure forms the only way you can find out with is a receive the secret ipo shares is by looking at the data they purchased and seeing if that was before it was publicly available. this is what happened in the case of the nancy pelosi ipo they talk about in my book and you may recall was the subject of a 60 minute episode couple weeks ago. literally nancy pelosi and her husband were given access to 5,000 shares of a stock in visa, the credit card company. they were able to buy those at $44 a share. the next day when they went public they immediately sold at $66 a share and within a matter of weeks it was over $90 a share. literally in a matter of days it was a net gain of $100,000 in there visa ipo stock.

was very quick pro quo? i don't know. what is curious is nancy pelosi received those access to those shares which are enormously difficult for anybody to get. at the same time they received access to those visa had two pieces of legislation they were profoundly concerned about on capitol hill. the important thing to remember is lisa is not a credit card issuer. their credit card company. they make their money from that 3% that the restaurants or grows restore you use the card at is called emerging swipe coffee at 3%. that is how visa makes their money. they don't make it on interest rates or anything else. these two pieces of legislation dealt specifically with the issue of swipe fees. one of those came out of committee with strong bipartisan support but never received a vote on the house floor. nancy pelosi never allow it. the same thing happened the following year. for two years nancy pelosi took the position that she was not going to support or get behind

swipe if the reform. is that related to the visa ipo? i don't know but think about this. what if somebody from visa had brought her $50,000 in cash. would there be any doubt in your mind if there was a quid pro quo? i don't think so but because it was done through this legal mechanism of what are called graft, best practice happens quite frequently. how widespread is it? i don't know. i know in 9 nancy pelosi's case there are least knee to ten ipos she and her husband participated in over the years often times getting access to stock and seeing the value double overnight and selling it the next day. i talk a little about the ideal method. let's talk a little bit about inside information. i think we can all recognize after the last 40 years the size of government has gotten bigger and intrusive. whether it is the bailout in 2008, the growth of government

in the health-care sector, clearly government has become much more involved in markets and the economy. what that means is you have a situation where government moves markets and if you have access to information in the position of power you can trade on that information and do very well. let me give you a couple of examples briefly of what i mean. i give you one example of republicans and one example of democrats. the first example is the financial crisis, the beginnings of it in september of 2008. there were a series of meetings held in washington d.c. one on september 16th and one on september 18th in which ben bernanke, the fed chairman and hank paulson, the treasury secretary sit-down with senior members of congress and discuss with them the true gravity of the situation. keep in mind this is mid september. the dow jones industrial average is still at 11,400.

people are nervous. the panic has not set in. we know from hank paulson's memoir that he asked and members of congress at that meeting had to leave their blackberries and cellphone at the door. it was highly sensitive and we know based on paulson's account that they informed members of congress that this was a potentially cataclysmic financial crisis. the dow jones industrial average was going to go down 20% and we've been looking at potential catastrophe in terms of the economy. according to paulson the congressman at the meeting were stunned at what they were hearing. after that september 18th meeting, ten people who were at that meeting, members of congress went out and sold a bunch of stock the next day. congressman from virginia sold stock in 90 different companies. you had other members of congress who jumped shares in the financial sector and buying

shares in other companies that did very well. there was also a gentleman at that meeting named spencer baucus who is chairman of the financial services committee who left that meeting and the next morning bought something called perot shares over shorts q q q. that is an options trade that is a leverage by that your shorting the market. you're betting the market or in this case knowing the market is going to go down. he literally made that trade the next morning and made $10,000 while putting a couple thousand dollars at risk. during the financial crisis as he was having this series of meetings and writing t.a.r.p. legislation and was a ranking member of the financial services committee engaged in 40 options trades that seemed to be particularly well timed and made a lot of money. his insistence is he did not trade on inside information but to my mind if this were a

corporate executive rather than a member of congress the sec would take a huge interest in this. there is the republican example. we will be bipartisan. let me give an example of another democrat. that would be senator john kerry. senator john kerry and his wife are very wealthy. that investment funds worth hundreds of millions of dollars. what is interesting about the trading in their account is there is this amazing correspondence between his legislative activity and the investments his portfolio makes. during 2009 the obama care debate, john kerry was on the health subcommittee of the senate finance committee which is where that legislation initiated in the senate. he was involved in crafting that legislation and putting it together and was literally buying and selling millions of dollars worth of health care stocks at the same time and those investments funds that he and his wife are the beneficiary of literally picked the right

winners, pharmaceutical companies, generic pharmaceutical companies that dumped the losers. health insurance companies at the right time and bought medical device manufacturers who did well. this is an amazing confluence of his legislative activity and is trading activity that is going on. the same thing happened in 2003 when he was involved in the prescription drug benefit for medicare. his investment funds and his wife made 111 purchases of pharmaceutical stocks during 2003 and made $2 million in capital gains as he was writing and being involved in the legislation for the prescription drug benefit plan. my point is this sort of activity goes on quite frequently and it is literally equivalence of allowing a basketball player on the washington wizards to bet on a game in which they are playing. would we ever tolerate that? would we allow the starting guard for the washington wizards to place bets in vegas on a game

in which he is playing? of course not. he is involved in controlling the outcome. we would never allow that to happen. that is what is going on in washington d.c.. people who sit on the armed services committee, trading defense stock and we are free to do so and senior pentagon officials are not. this is an example of access to this information. let me talk about a third component of how they enrich themselves. that is what are called the land deal. everyone is familiar with earmarks were members of congress introduced something specific where they say i want $500,000 sent to this non-profit organization or i would $2 million to go to build this road. earmarks are a common part of washington. they have been criticized because people who are campaign contributors seem to become beneficiaries of those earmarks. to my mind that is not the most egregious misuse of earmarked.

the most egregious use is members of congress can and often do use earmarks to enhance the property of their own real-estate. the value of their own real-estate. how does that work and how is that ethical or legal? is widespread. let me give you an example. that would be dennis after it. we talked about how he had this amazing increase in his net worth when he was speaker of the house? one way in which he did it was a land deal. in 2004 he bought a total of 333 acres in rural illinois. four months after that he put in an earmarked for $207 million to build something called the prairie parkway. what the prairie park way did was make the land that he purchased knocked out in the middle of nowhere anymore because the road was going to run by a property that he purchased only three or four months later. what was he able to do? he was able to sell that land at

more than twice what he paid for. his net gain was $2 million off of that one real-estate transaction. how can it be? this can't be ethical. this can't be legal. by the standards of washington d.c. it is. there's nothing illegal about it and as far as the ethics committees are concerned the ethics committees have an amazingly low bar when it comes to earmarks. you know what that bar is? as long as thompson, dennis caster or anyone else who introduces an earmarked benefits from real-estate investment can show that one other person, just one, could be the neighbor down the street or your cousin next door benefits from that earmarked, one other person other than yourself is ethical and you can do it and there are multiple examples i counted the book where this has happened wary senator had an equity stake in a real-estate development and earmarked $66 million and it was run by his brother and he was part owner. the ethics committee approved it and said it was ok because there

would be other beneficiaries. these are the methods and techniques insiders use and i honestly believe part of the reason we don't see a huge amount of difference in the growth of government and the size of government whichever party is in power is in part because all the profit centers are seeing government grow, not get smaller. are talk about insiders on the political side. let me talk about crony capitalists, people on the outside. what has happened in america, a lot of finance years and corporations have come to the conclusion that it is a much better business investment for them to hire a lobbyist or make campaign contributions than it is to engage in more research and development or the expansion of the product line. the reason is there is so much bigger upside in how that is done. let me give you a couple of

examples of people that i discuss in the book and demonstrate how this technique works. let's look at the investment community, hedge fund and investment community. there was a study a couple years ago by academics. a look at 50 different hedge funds. they found the hedge funds who were most politically active and hired the most lobbyists and made the most campaign contributions consistently outperformed the a political hedge funds by 10% here. that is huge when it comes to hedge funds. 10% the year. at the conclusion of the study they benefit from that access and having their friends in power because they learned things government is going to do and they are able to make trade accordingly. a couple examples eyesight in the book, one of them involve george soros who was often discussed for his political activism and charitable work, the other one is warren buffett to people are sometimes surprised to hear because he has

sort of the impression of being kind of the grandfather from nebraska who is squeaky clean and owns dairy queen and just has that good american spirit. both of these gentlemen are politically active in different ways but both of these men use that political activism not just to expand their ideas but help their investment decisions. let me begin first of all with george soros. we know that george soros was a close friend and supporter of barack obama but we also know he had an important role to play in what the stimulus would look like which industries would benefit, how it would be structured. what a lot of people don't realize is at the same time in late 2008, early 2009, george soros was advising the administration how to structure where this would go he was buying large stakes in companies that would be the exact beneficiaries of that stimulus and he ended up doing very well.

i won't go through the list of companies here but we're talking about millions upon millions of shares of stock. just to give you a couple of examples to give you an idea of the timing. the first quarter of 2009 he bought the one.5 million shares in american electric power. in june a few months later american electric power got $1 billion in taxpayer money for an energy project in illinois. he bought up shares in amber in which is the midwest utility company literally weeks later, got $540 million from the department of energy. he bought shares in energy energy, have a million shares and not $154 million from the energy department. the list goes on and on. suffice it to say, one could say it is coincidence that you see a curious pattern of investing in companies that end up being the beneficiaries of government loans leaders and government contracts and our money. let's talk a little about warren

buffet. this surprises a lot of people but he is very much involved and engaged in this. warren buffett also was a strong backer of barack obama, well-connected. in the 2008 campaign he had the luxury of having barack obama and john mccain saying they would like him as treasury secretary. warren buffett didn't prefer that but liked the role of being the savior of the american economy. go back to the financial crisis in 2008, warren buffett when the financial crisis began immediately becomes involved with the treasury department and structuring what would eventually become the bailout of the public/private partnership by the treasury department. when [speaking in native tongue] -- when timothy geithner becomes the treasury secretary the public/private partnership with the treasury secretary announces in march of 2009, started in largely resembles a five page letter that warren buffett had

written describing how the bailout should be structured. that sounds very good. here is an individual who is interested in helping the american public. the problem is as he is doing that he is literally buying millions of shares of stock in the very banks that will benefit from that public/private partnership and the bailout. he is buying shares in wells fargo, bank of america, american express, shares in an and gee bank and he is able to buy some cheap because nobody knows what is going to happen. don't know what the bailout will look like or how it will be structured but warren buffett does because warren buffett is helping to design it himself. he is able to buy these shares for pennies on the dollar and once the bailout becomes clear, the shares surged and he ends up doing very well. you have a circumstance where warren buffett may or may not depend on your view have helped design an effective bailout but it cannot be avoided. the fact that while he is doing

so he was actively and aggressively buying millions of shares of stock in the companies that would bail from the bailout he was designing. that is an example of chronic capitalism. doesn't matter if you are an investor or how good your analysts are or how good your number crunchers are. if you don't know how bailout will be structured you won't be a beneficiary. let me now talk briefly about the third part of this crony capitalist system and that is what are called the green energy economy that barack obama has created. this is another example of crony capitalism. people here are familiar with the term solyndra which received the $535 million guaranteed government loan. the chief investor with a bungler for the obama campaign. the sound of political favoritism. i have actually been researching this program for more than a year and if you look at the

entire program you find that solyndra is literally just the tip of the iceberg. of approximately $20 billion that had been handed out in this program you can link $16 billion of debt to obama connected finance years and capitalists. what this means is very real numbers is there are at least ten members of rock obama's 2008 national campaign finance committee and at least a dozen bunglers to his campaign that got solyndra type loans or even larger. in some cases two or three times larger and many of these are in worse economic shape than solyndra. ..

>> than it does on research and development. and they confess that even if this big, massive project that they're behind works, they still may not be profitable. that's everything they have disclosed, that's not my evaluation, that's their disclosure to the sec. what happens to this company? well, of course, they get a $1.4 billion loan from the taxpayer. what's interesting about this case is not only do you have robert kennedy jr. as a partner, one of the individuals who was a principal at this firm whose name is sanjay was an obama fundraiser, and can after the 2000 election went to work as an adviser to the department of energy green energy grants program. so you see how the cycle works. and you have a circumstance now

where individuals who have worked in the department of energy who have given money to certain entities are now moving back into the private sector ask working for the very -- and working for the very people that they had authored and given grants to in the past. it's an enormous cycle of cronyism. and this would not be tolerated in any other sector of the economy except for the fact that we're supposed to feel good and positive because this is about alternative energy. it is pure cronyism and nothing else. so i don't know, i don't know if i've depressed you, if i've bored you, i'm not sure what the term is, but should we really care about this? hasn't this always been the way the american economy has been? i would say, no. yes, cronyism has always been there, there have always been politicians who have enriched themselves, but the opportunities have become so much greater than they've ever been. there's so much more money at stake, so much more power, so many more opportunities to make money and leverage your position. i was stunned to find a national

journal report a couple years ago that 30 u.s. senators have a family member who is a registered lobbyist, and there's nothing in the u.s. rules against nepotism. so we have to take their word for it that when junior is registered as a lobbyist, i'm not giving him special favor, i'm not talking to him about it. we're going to have to take their word for it and, you know, i hate to tell you this, but elected officials have been known to not tell the truth from time to time. but the magnitude has become much bigger, and i do have a fear that we're reaching a tipping point where it's going to become more and more about political connections and contacts and lobbying andless about product innovation and development of new technologies that spur us forward. and the problem is this: the capitalists like steve jobs wants what? he wants the entire economy to do well because when the entire economy's doing well, he can sell her of his products. the crony capitalist, he doesn't care. he doesn't care. a rising tide doesn't lift his

boat. what lifts his boat is what? connections and access to power. so we have a situation where the financial elite is less and less interested in the broader health of the economy and more and more concerned about access to power. so what do we do? i propose a number of reforms in the book, i'll just go through them quickly. number one, i think we need to have mandatory blind trusts for elected officials. nowhere else would we accept the kind of conflict of interest and confluence of stock trading and making huge financial decisions that we do with politicians, and it just, it stuns me, and i'm sure it probably stuns a lot of you that they don't have blind trusts already. very few of them do. that's number one. number two, in addition to that we need almost immediate disclosure of financial transactions. right now they disclose one time a year, and uniwhat? they don't disclose them electronically, they disclose them on paper. the head of sec enforcement said we can't even search them

because they're not electronic. that's absurd. there ought to be disclosure within two to three business days of stock transactions involving elected firms. then we can know if someone is sponsoring health care legislation and buying and selling health care stock at the same time, and i think the american people deserve to know that. third thing is we've got to get out of the business of giving out government loans guaranteed by us and government grants. it is simply a politicized way to pass out favors to friends. this is not done like the national institutes of health where they have peer review and academic review of grants and proposals. these are grants decisions made by the commerce department or by the department of energy that are made by political appointees. and they are oftentimeses not experts this these areas. so we've got to get us out of that area. the final reform that i would propose is to prevent the political class in washington from, in effect, extorting money

from businesses. there are businesses that are lobbying here because they want special privileges, but there are businesses lobbying here because they are frightened that congress is going to impose a new tax or a new burden on them. and so they're looking for their survival. and you really have a situation where things develop that are loosely called mill kerr bills. now, what is a milker bill? a milker bill is not actually designed to pass. it is introduced by a member of congress to milk people of financial contributions. a couple years ago harry reid introduced the idea of a special tax on hedge funds. all evidence is he wasn't really serious about it, but he introduced the bill, and guess what? suddenly a lot of his friends and former aides started getting hired by lobbyists by the hedge fund industry, and suddenly hedge fund industry which at that point had largely been generally apolitical started making massive contributions to harry reid and to his political party. both sides do this, and it's

extortion. if a private individual did this, they'd go to jail. politicians do it all the time. so my fourth reform that i would mention today is i think we need to have a rule in washington that applies in the state where i live, florida, and a bunch of other states, and that is that while congress is in session, they cannot solicit, and they cannot receive campaign contributions period. and what would happen if we did that? one of two things. the extortion would end and, perhaps, thurm two, we might have a 12-hour session of congress, and that would be it because they'd want to be off raising money. the point is, it breaks this nexus of being able to leverage political power to enrich yourself and your friends. i hope i've not rambled on for too long. i'd love to take any questions or comments or objections to what i have to say. thank you, john. [applause] >> peter will recognize his own

questioners, and if you'll be so kind to identify yourself. since on your last point you mentioned about the campaign and finance and being in session, i know tennessee is one state that does that. do you have any evidence that any of your proposals have been done in any states, or isn't it also a state problem we're looking at too? >> that's a great question, john, yes. i want to say there are 27 states that have this restriction on soliciting and receiving campaign contributions. the other reforms, no. it's a problem on the state level in terms of the land deals that i've talked about. probably also on stock trading although probably less so because the influence of even the california legislature on the valuation of companies is going to tend to be less than it is for the u.s. congress. i mean, literally, you know, something that can happen, you can have two or three lines in a bill -- i'll give you one example, the health care bill, obamacare. there were two or three lines in there that said

biopharmaceutical companies were given this that bill a 12-year exclusive patent rather than five years which is what other drug manufacturers do. that's a huge gain. can you imagine what that did for the biotech sector? that was actually a member of congress that bought a large amount of biotech sector funds at the same time and saw those pop 25% because once the bill passed and everybody realized what a boon it was going to be to biotechnology, everybody suddenly wanted to buy those companies. so, yes, i think it is a problem at the state level, but i think more so here because there's more power here. yes, question right there. >> hi. i'm david with the heritage foundation. that was an excellent talk, and i'm frustrated listening to you asking myself why have i not heard of this before? so i'm curious to know is this original research, or have you simply through the press and pulling these stories together? i guess what i'm getting at is, where is the press on this?

why are there not daily scandals exposing this? >> you know, that's a great question. i have some theories on that. of i don't know, maybe if you could bring andrew breitbart is here, and andrew, i think, we have discussed this in series, and then maybe andrew can give his thoughts. this is all original research and, honestly, to me -- how do i say this? it's really pathetic that a guy who lives in tallahassee, florida, who's a fellow at the hoover institution out in california is the guy that had to break this story. i mean, this place is crawling with newspaper reporters, and i think it's a combination of things, it's speculation. and that's not to say, there are some good reporters out there that have covered these summits. i was -- subjects. i was talking to a reporter, i'm trying to remember her name right now, from "the washington post" who has touched on this stuff. but here's what happens, here's the problem. if you are a reporter covering the hill and you come out with a story that says these guys are getting rich, guess what's going

to happen? you're going to lose your access. you know, as a friend of mine said it's a little bit like imagine if you're a reporter for the town baseball team, and you say our pitching stinks, our fielding sucks, and, you know, the management is corrupt. you're not going the get invited into the locker room even if it's true. so i think a lot of it is, frankly, that the press corps fears off of access. if i dare so, i think it's also a laziness. they've got other things they're doing, and it takes a lot of work to go through financial disclosure forms and look through all this stuff. it takes a lot of work. and, you know, what you find is sort of this collaboration between the two. one example that i noticed is when the book came out, people universeally outraged. one of the groups that was not and sort of poo-pooed the episode and the idea for nancy pelosi was the huffington post

which took the position, oh, this is kind of a nonstory. well, a couple days later the huffington post was sponsoring a tea with nancy pelosi. if they had said this was a real story, she probably would not have shown up. so there's this collaboration. a lot of reporters and people who own media outlets want to socialize with people in power, and for that reason they may go after a individual congressman, but what i'm really talking about here is a compromised system. they don't want to touch that because that's going to sort of undermine their source for access and their source for information. do you want to add something to that, andrew? >> well, i would say credit where credit is due, i don't think we would be in this position that we find ourselves having this discussion and having hearings on the hill on this very subject matter but for the fact that the mainstream media in "60 minutes "-- >> yep. >> and tina brown -- >> "newsweek".

>> "newsweek" worked with an avowed conservative in peter schweitzer who tried to approach this from a bipartisan level. and so while the new media often acts as an insurgency and acts as the sticks part of the, you know, carrots and sticks back and forth, there is a carrots part of this, and the media has done a pretty good job up to this point. but when you were using the analogy of the major league baseball team and a reporter telling the truth ant what's going -- about what's going on, it's happening to you right now. i mean, you are a boy scout in all people's eyes. everybody knows that peter schweitzer's a good guy. you have created a firestorm on the hill that has caused them to react. there's multiple pieces of legislation that are being pushed in an emergency fashion, there are hearings that are going on right thousand, and there's one elephant in the

room, and that is the fact that peter schweitzer has not been asked to testify. >> right. >> and the reason why is because you are the reporter who has named names and said the reason why this team isn't working well is because our pitcher is juiced up. or something like that. [laughter] and that's what -- and the problem is there's, this is an incestuous town. they don't like that there are people down in tallahassee or in los angeles who are not part of this tiny little incestuous place. robert f. kennedy, you said his company spends all this money on marketing. i said, also, the marketing that comes with the kennedy brand, the marketing that comes with him having charity ski events where bob woodward of abc spends his time at an environmental charity run by, you know, robert f. kennedy jr. these people are married to each other. they do their investments together, and the media is as

corrupt as the political class and are benefiting as well. >> i think that's very well said. i think, steve, did you have a comment to make here? i think what andrew said is true, by the way. yes, i have to say "60 minutes" was completely and totally fair and above board with me, they knew where i was coming from politically, they retraced my research steps, and they were put under a lot of political pressure on this story. they did a fabulous job. and peter boyar at "newsweek" was just fabulous. yes, you are right, there are good guys out there, and in my pessimism i should have mentioned that, so thanks for reminding me. >> but, peter, lets be specific, the scale of this is incomprehensive. but let's be very specific. there were hearings this week in the house controlled by the republicans where you reached out to, and why were you not allowed to testify? i think we've got to get very specific about this. you unearthed people talk

theoretically about, but you actually went back and laid out a very compelling, factual case that drove legislation. why were you not called to testify and put in this the public record? >> well, i was contacted by both the senate and house committee staffs who asked me for input and ideas, but i was told early on that i was in their words, quote, politically toxic because i had named names. and that means on the senate side, for example, there were three members of that committee who are mentioned in my book involving stock trades and the timing of those stock trades. and on the house side, actually, congressman spencer bachus who i mentioned doing the options trading during the financial crisis, and as i lay out in the book, he's done massive amounts of trading throughout his congressional career. of when he was on the transportation committee, he was shorting united airlines stock where he has oversight. the point is he was the chairman of that committee, and i think it's pretty doubtful that he would want me the show up. this is, to my mind, what's so

curious. so much in this town is partisan. there is bipartisan circling in the wagons of this. this is something they can agree on, that this -- no, in this really is illegal. that's the positional thing. this is really illegal. but then when you say has the securities and exchange commission ever gone after a member of congress for this insider trading, no, they can't think of an example. and let's face it, the sec, its budget is set by congress. and look what happened when the fbi got a federal judge to give them a search warrant to search congress william jefferson's office, jefferson, the guy that had the money in the freezer. the fbi had a wiretap that said this guy was taking bribes, and both sides of the aisle were outraged saying this was a breach of congressional authority, and there were threats to cut the fbi budget. so really, honestly, is the sec going to do anything about in the? come on, they're not. yes, question up here. >> rick trader from the

conservative commanders radio show, and since i've been up since 4 this morning, i haven't been this excited since my first amway meeting. [laughter] short of being elected to congress, how can i get in on this before it becomes illegal? [laughter] >> well, if you don't want to get elected to congress, you need to marry into a congressional family. that would be the best. one of the things i highlight in the book is how members of congress from both parties will have kids. they get into a position of power, and their son, you know, will be a manager of a pizza restaurant. and when they suddenly take a senior leadership role, that kid comes to washington, d.c. and becomes the most popular lobbyist in the entire country. i'm sure it's because of their expertise for governance. so my advice to you would be if you don't want to run for office and get on the gravy train, marry into it -- >> [inaudible] >> two wives at one time, i don't know about that. you'll have to take that up with somebody else. [laughter]

yes, question right here. >> steven ford, hillsdale college. i'm wondering if, what role the staff of a congressional office plays in this. this that oftentimes congressional leaders don't seem to be the brightest bulbs. [laughter] and their staff are the ones pulling the strings, writing the legislation, ultimately controlling things, writing the rules that are passed on to committees that then are passed on to agencies. what kind of reforms can be put in place to limit their transactions, to cast light on their actions and shortcomings as well? >> no, that's a great question because congressional staff as well, they're in the same position. they're free to trade stock as aggressively as they want to. actually, "the wall street journal" has done a couple of stories on this where, again, they found staffers from both parties who, you know, were involved in writing legislation for alternative energy, bought stock in a company and that, you know, the value of that company, you know, went up 100%, and the staffers will say, well, you know, i did my research.

you know, i'm sorry. the problem that i have, the problem that i have is that, um, that sort of excuse would never work for anybody else. i mean, could you imagine, other official here from political officials is, well, i didn't make that trade, my broker made that trade. okay, that's fine, but if you were a corporate executive and sec saw a pattern of trades and the sec knocked on your door and said, hey, mr. ceo, we noticed this curious pattern of trades, and you say my broker did, is the sec just going to go away? okay, we believe you. no, their not, they're going to investigate it. and that's why i think we need to have blind trusts. they're not deaf, but they're blind, and they at least provide an added barrier, and i think we need to have somewhat similar reforms. perhaps there need to be very tight restrictions on congressional staff because they are free to trade as well, and they get access to an enormous amount of information and details of information that,

again, can dramatically move markets. in an era where, you know, from health care to finance to defense to these huge sectors a couple of lines in a piece of legislation can, you know, increase or decrease the value of a stock by 20%. we need to be watching what government insiders are doing. and it's interesting that there is a libertarian line of arguments that says insider trading laws are stupid, that they, that they, you know, insider trading really reflects market efficiencies. i'm not sure i would agree with that, but what's interesting is that those who are opposed to insider trading laws on wall street like professor henry manny at george mason, he will say i still want them on government officials. because government officials don't add any value to the market. it's all about extraction influence. so even the libertarian position seems to draw the line and says we can't have government officials doing that. so i would agree with you, congressional staff as well. yes, right here.

>> josh -- [inaudible] with the heritage foundation. the title. title of your book is "throw them all out" with the capitol in front. does it, is it only affecting the capitol and the congress, or is this throughout washington? i assume it's just symbolic. >> yeah, it is symbolic. the title of the book does not mean every single member of congress. what it means is, and i discuss this in the book, i firmly believe that both sides need to have an absolute zero tolerance policy. and what that means is i am a conservative, i tend to, you know, as a result of that vote republican. but i can't have the attitude anymore that, well, in this guy's really good. i mean, he's got a really high conservative rating, and i agree with him on all the issues. if he's enriching himself doing this stuff, i need to not support hip. you know -- him. you know, this notion that he's our guy so it's okay that he does it i just don't think works anymore.

it's part of this whole sort of incestuous system of the permanent political class, and they play to that, you know? democrats and republicans, when they get attacked on personal ethical issues, charlie rankle did this, it's a witch hunt. my opponents are out to get me. both sides do it. and my view is if they are enriching themselves through this legal graph, we need to have a zero tolerance policy on both sides. that's the only way we're going to clean et up -- clean it up. so long as we insist that the other side do it, it's not going to make a difference. and, yes, it is a widespread washington problem. it involves segments of the executive branch, it involves the lobbying community, it involves the legislature. i guess the only thing is the supreme court, i didn't find anything on the supreme court. yes, sir, over here. >> craig snyder with the david horowitz freedom center. this very low bar for ethical conduct in congress is troubling. not only only do they do it, but

it's sanctioned. >> yeah. >> what concerns me, and my question to you is, with such a low bar for ethical behavior, the first time or the second time a staffer or a congressman or senator does this, it really opens the door to any other kind of behavior. and i'm wondering behind the curtain how much additional approved graft, if you will, of this kind goes on? because one thing is that the patriot class, the new citizen that looks at this says we need a higher standard for our public officials. and whether it's term limits or other kinds of things, how much is behind the curtain? >> i think it's a good question. um, i think that there is a huge problem. i mean, the way that the, that the government has been established and set up and i think a lot of it but not all of it is based on constitutional principles is that congress is

basically supposed to govern itself and set it own -- well, they've done a great job of that, haven't they? charlie rangel is in congress. had you and i done what he had done this terms of failing to disclose, we'd probably go to jail. we wouldn't be serve anything congress. and, you know, a censure doesn't have a tangible effect on him. so i'm not convinced congress can police itself anymore, and i think you honestly have -- i'm trying to think of sort of a proper parallel. this might not be exactly the right one, but it's a little bit like the circumstance at penn state, you know? with jerry sandusky and what was going on there. i mean, you had potentially horrible things done by an individual, and you had other people that might not or might or somewhat or a little bit were aware of it, but nobody did anything about it. and that's part of the problem too. there is a club mentality. and it's also, by the way, codified in the law. we have a dodd-frank reform bill

on finance that you may be familiar with, a lot of debate about that. one of the clauses in there was a whistleblower clause which says if you work for the private sector or the federal government and you know of somebody committing a financial crime who is your boss -- insider trading, embezzlement, you know, taking bribes, whatever finish if you report them to a law enforcement agency, your job is protected. you have whistleblower protection. congress is exempt from that lieu. [laughter] so there's no whistleblower protection. if you see your boss on capitol hill doing something and you report it, great for you reporting it, you may very well, and i bet you probably will lose your job. these are the sorts of exemptions that they are allowed. i am a firm believer in transparency. i don't thinkoff to, um, do things in terms of make things complex. i don't think that having them police themselves makes sense. because it hasn't been very effective. i think the greater the

transparency the were better. so one of the thing i talk about in the book, it would have to be done in a modified format, is congress is except from the freedom of information act. so literally your chance of getting access to cia documents is hutch higher than it is to any sort of private congressional correspondence or phone records or meeting records was you can apply to the cia and they might deny you for 20 years, but you'll eventually get access. congress is exempt. i think congress should not be exempt from the freedom of information act. certainly, we don't want people using anytime a political way to hurt congressional offices, but there needs to be greater transparency into who they're talking to. same thing with who writes amendments. you know, when amendments are written, we don't know who discloses it. in the florida legislature when an amendment is introduced, you have to sign and write out the name of the person who wrote that piece of legislation. so if it was a lobbyist that

handed it to you to introduce as an amendment, you know that because it's written on the amendment. i'm a big bleer in transparency because i believe the republic is about self-gore nance, and i think we can the american people to make wise decisions in this case. so i agree with you, there's a lot more. andrew. >> i'll ask a question this time. >> yeah. >> we talked about priestly that you have not been -- previously that you have not been asked to testify, that you are toxic right now on the hill for naming names. you are the whistleblower that they don't want to protect, they want to marginalize you. >> uh-huh. >> and the way that it's manifesting itself is you are not part of the hearings that you have, in many essence, be a one-man creation therein. have any of the named names done anything in a punitive sense to try and thwart the promotion of your book or the publication of your book or, you know, or -- to

get the word out? >> yes. there was, actually, when the book was about to come out a, a couple of weeks before "60 minutes" was working on the story, some word was getting around that this book was out here and, yeah, there were efforts to stop the publication of the book, there were threats of legal action, there were demands of retractions. senator kennedy -- sorry, senator kerry was, literally made a call to the chairman of my publishing company and demanded to see a copy of the book before publication. that was not granted. he talked to people that work for my publisher, making demands about retractions to which our response was you can't retract facts. all we're doing is showing your legislative behavior and the stock transactions and investment funds you benefit from. there were also, um, let's say disparaging things said by nancy pelosi to