Congressional challenger Howard Swint says that Congresswoman Shelley Moore Capito (R-West Virginia) engaged in insider trading on November 18, 2008.
Swint says that if Capito were the CFO of Citigroup and traded the way she did, she would be criminally prosecuted.
But because she was a member of Congress, she got off.
Congresswoman Capito denies any wrongdoing. But check a report released by the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).
The report is titled Extraordinary Financial Assistance Provided to Citigroup Inc.
It was released on January 13, 2011.
According to the report, in October 2008, government officials were reassuring the markets and the American people that Citigroup and eight other financial institutions that received TARP funds were fundamentally healthy.
For example, on October 14, 2008, Treasury Secretary Hank Paulson, Federal Reserve Board Chairman Ben Bernanke, and FDIC Chairman Sheila Bair issued a statement saying that “these healthy institutions are taking these steps to strengthen their own positions and to enhance the overall performance of the U.S. economy.”
But that the report found that “Citigroup’s health would soon come into question.”
“Indeed, Citigroup suffered significant instability shortly after receiving the initial $25 billion TARP investment,” the report noted. “Citigroup would lose $27.68 billion in 2008, and by November 19, 2008, its stock price had dropped precipitously.”
“In the view of Secretary Paulson, the company was teetering on the brink of failure. The company’s survival was in doubt, and the government, through TARP and other means, stepped in to save one of the world’s largest financial institutions.”
Swint said that the report “corroborates beyond a shadow of a doubt that members of Congress on the House Financial Services Committee – including Congresswoman Capito – knew that not only was Citigroup not healthy, but that a new massive second bailout was on its way to keep Citigroup from going into bankruptcy.”
“So when Congresswoman Capito and her broker husband Charles dumped their stock on November 18, they also knew that that bailout was coming,” Swint said. “The whole nation thought that Citigroup was healthy, but Capito knew it wasn’t, that the stock would tank, and that it would rebound after the bailout.” “So she dumped Citigroup stock and bought call options, knowing that the bailout of Wall Street and Citigroup was on the way.”