Rep. Bachus denies new book's claim that he took part in insider trading

House Financial Services Committee Chairman Spencer BachusSpencer Thomas BachusManufacturing group leads coalition to urge Congress to reauthorize Ex-Im Bank Biz groups take victory lap on Ex-Im Bank On The Money: White House files notice of China tariff hikes | Dems cite NYT report in push for Trump tax returns | Trump hits Iran with new sanctions | Trump praises GM for selling shuttered Ohio factory | Ex-Im Bank back at full strength MORE (R-Ala.) fired back against a book that claims he engaged in insider trading, calling it rife with "serious untruths."

The pushback comes on the heels of the publication of Throw Them All Out, a new book by the Hoover Institution's Peter Schweizer.


The book by the conservative author details several examples he claims are proofs that lawmakers are using their positions as members of Congress to turn a personal profit in the financial markets.

The issue of potential insider trading by members of Congress re-entered the spotlight this week, following a '60 Minutes' piece on the matter, where Schweizer was interviewed.

Bachus was one of a number of lawmakers singled out in the book, alongside House Speaker John BoehnerJohn Andrew BoehnerDemocrats eager to fill power vacuum after Pelosi exit Stopping the next insurrection Biden, lawmakers mourn Harry Reid MORE (R-Ohio) and Minority Leader Nancy Pelosi (D-Calif.).

But Bachus said in a letter sent Wednesday to the book's publisher that several of the claims against him are "absolutely false and incorrect."

"There is nothing a member of Congress can do that is more important than uphold the public trust," he wrote. "That is why it is so disappointing and disturbing to have my character impugned so recklessly and falsely as this book does."

In his letter, he breaks down several of the examples used to depict him as an inside trader, maintaining that the claims are based on major factual errors.

For example, he says the book asserts that Bachus shorted the stock of General Electric four times in a single day, based on inside information the company was in trouble. But Bachus says he did the exact opposite, purchasing call options on the company's stock — a move one makes if they expect the investment to rise in value.

"If I somehow had 'inside information' that GE was in dire straits, why on earth would I have purchased call options in the hope that the company's stock price would increase?" he wrote.

One major claim that Bachus calls a "total lie" is the assertion that, after a "secretive" meeting with members of Congress and top federal officials at the height of the financial crisis, the lawmaker turned around and used that information to adjust his own investments. Rather, he argued that the meeting was not nearly as clandestine as the book suggests.

"This meeting was so 'secretive' that members of the press knew about it beforehand, were waiting outside the door, and a press conference was held immediately after," he wrote.

Furthermore, he maintained that it is "laughable" to suggest that that private meeting was necessary to learn that financial markets were in trouble.

"You would have had to be living under a rock not to know by September 18, 2008 that the economy was in bad shape," he said.

The book alleges that the day after that meeting, Bachus purchased contract options in an index fund that seeks results that are 200 percent of the inverse of the NASDAQ 100 index, and was able to sell them a few days later to nearly double his investment. Bachus did not press back against that particular detail.

He did take issue with a claim that he once purchased options for a fund that represents the entire financial sector, a seemingly questionable investment given Bachus's high ranking position on the House panel overseeing that sector. But the lawmaker said those investments were in the energy sector, and he has a "personal policy" of not investing in financial companies given his committee position.

The book and news report have rejuvenated calls within the halls of Congress to crack down on lawmaker investments. Sens. Scott Brown (R-Mass.) and Kristen Gillibrand (D-N.Y.) are both introducing bills to prohibit the practice. Reps. Louise Slaughter (D-N.Y.) and Tim Walz (D-Minn.) introduced similar legislation earlier this session in the House.

The Senate Homeland Security and Government Affairs Committee announced Wednesday it would be holding a hearing on potential insider trading by members of Congress.