A Stitch in Haste

Senatorial stock gymnastics appear to be bipartisan:

Democratic gubernatorial candidate Sen. Jon Corzine [D-NJ] no longer holds shares in Goldman Sachs, his former employer, according to his campaign.

The disclosure regarding Corzine's finances came Tuesday after two lawyers alleged the senator had potential conflicts of interest because the Wall Street firm does business with the state.

In response to media inquiries about the allegations, Corzine spokesman Tom Shea said the senator had directed the trustees of his blind trust to immediately divest Goldman Sachs shares from his portfolio.

The campaign then learned, Shea said, that Corzine's trust had already been divested of the stock.

When that was done is not certain, but it may have been earlier this year, because such a sale was not listed on Corzine's 2004 tax returns.

Okay fine, Corzine seems to have avoided the "good market timing equals bad political timing" conundrum that Senate Majority Leader Bill Frist fell into. But the underlying dysfunctionality of the whole Congressional stock-trading framework is no less befuddling in Corzine's case:

--Why shouldn't he have been required to fully divest his Goldman Sachs holdings before taking office in the Senate in the first place?

--Alternatively, why doesn't "blind" truly mean blind in the case of Congressional "blind trusts"? What exactly is the logic of allowing senators to give sell orders to (what claims to be) a "blind trust" simply because the investment was owned beforehand? How is this exception to the rules not a potential conflict of interest different from any other buy or sell order?

--As another alternative, why can't members of Congress who face potential investment conflicts be limited instead to "auto-pilot" divestments, comparable to 10b5-1 trading plans for corporate insiders, under which a fixed quantity of the security is sold each month or each quarter regardless of price or corporate news?

--Finally, would it be so onerous to limit politicians to trading in conflict-free investments such as mutual funds and government bonds?

It makes no sense whatsoever that our seniormost politicians have less restrictions on trading than do corporate or Wall Street insiders. They certainly face the same, if not greater, potential conflicts of interest.

They are, most of them, already too power hungry to be trusted. Must they also be allowed every opportunity to satisfy their petty greed as well?

More thoughts from PoliBlog.