WASHINGTON — Rep. Spencer Bachus strongly denied Wednesday using classified regulatory information to make his own stock decisions and disputed other allegations raised in a new book about lawmakers' trading habits.
In a letter to the publisher of "Throw Them All Out," by Peter Schweizer, which was the basis for a 60 Minutes report Sunday, the Alabama Republican cited what he called "several major and serious untruths and outright factual errors about me in this book."
"There is nothing a Member of Congress can do that is more important than uphold the public trust, and that is what I have done throughout my service in Congress," Bachus, the chairman of the House Financial Services Committee, said in the letter to Linda Zecher, president and chief executive officer of Houghton Mifflin Harcourt. "That is why it is so disappointing and disturbing to have my character impugned so recklessly and falsely as this book does."
Featured in the 60 Minutes segment, Schweizer, a conservative former speechwriter and now a fellow at the Hoover Institution, alleged Bachus used access to regulators in 2008 while investing in funds meant to enjoy gains when the overall market fell. The suggestion was he based the trades on non-public information derived from a meeting with Federal Reserve Board Chairman Ben Bernanke and former Treasury Secretary Henry Paulson.
But Bachus said all of the information he used was public, noting that threats to the economy and the financial sector were then common knowledge.
"Above all, the book's insidious allegation that I personally profited from non-public information is a total lie," the congressman wrote. "The author dramatically refers to a 'secretive' meeting on September 18, 2008 I attended along with several other members of Congress and alleges I used information from that meeting in making investments the next day.
"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 the meeting to inform the public about what we discussed," Bachus continued. "The idea that I or anyone else needed this meeting to know our financial markets were in trouble is just laughable. You would have had to be living under a rock not to know by September 18, 2008 that the economy was in bad shape."
Bachus refuted other assertions in the book, including the nature of the lawmaker's investment in General Electric. "The book is absolutely false and factually incorrect when it states that I 'shorted General Electric options' and did so 'four times in a single day'," he said in the letter. "The truth is I bought call options on General Electric stock, which is an investment made when one thinks a stock will rise. … 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?"
The lawmaker also challenged the book's claim that Bachus made an investment focused on the financial services industry while a senior member of the Financial Services Committee. (In 2008, when the GOP was in the minority, Bachus was the panel's ranking Republican member.)
"The book contends that I bought options in" an exchange-traded "fund on July 14, 2008 'representing the entire financial sector' of the stock market," Bachus said in the letter. "This, too, is absolutely false and incorrect. The options I purchased were in the energy sector, as were subsequent options I purchased on August 15 and 22.
"I have a personal policy of not investing in financial companies under the jurisdiction of the Financial Services Committee and it is unfair and untrue for the book to insinuate or claim otherwise."