Taking STOCK of pipelines, politicians, energy ownership
The proposed STOCK Act (Stop Trading on Congressional Knowledge), passed by the U.S. Senate Thursday, appears to be little more than an election-year ploy. The proposed act has been introduced and reintroduced over the past six years, and it’s now on its way to the House.
There’s been a ban on insider trading by members of Congress in place since 1934, thanks to the creation of the Securities Exchange Act. The STOCK Act, with a projected cost of $9 million over five years, would amend the 1934 act to make insider trading by members of Congress and their staff illegal rather than banned. Odd, since congressional members and their staff are not now — nor have they ever been — exempt from federal securities laws.
Insider trading is a bad thing, no argument there, but I am more concerned about real conflicts of interest our lawmakers may have when pushing for specific legislation.
Take the Keystone XL Pipeline project, for example, since it too has captured headlines and national attention lately.
Texas-based Valero Energy and its sister company NuStar already have contracts with their customers for the Keystone XL Pipeline fuels that includes Valero’s domestic retail gas stations, as well as its customers throughout the world. With big deals in place, that would certainly explain the company’s frustration and sense of urgency when it comes to White House approvals.
I’m all about job creation, but I can’t help but wonder how many politicians and saber-rattlers pushing for the pipeline own shares in Valero, including any interests in broad-based mutual funds secured by BlackRock, Fidelity, Vanguard and other major shareholders of Valero.
Of course, knowing whether members of Congress and their staff have financial stakes in the project doesn’t provide insight into any deals or benefits the project has for Norway’s state-owned Government Pension Fund, which is another major shareholder in Valero. Nor does it reveal any personal connections congressional folks might have with NuStar and its plan to issue $250 million in 10-year notes underwritten by Citigroup Global Markets, Mizuho Securities, RBS Securities and others.
Clearly, the driving message to gain citizen support of the pipeline is construction jobs, just as concerns for the environment in Nebraska are fueling opposition. As important as both positions are, I confess to being far more interested in the long-term benefit and sustainable job growth that come with supporting our own U.S.-based multinational companies as responsible leaders against the rising tide of dictatorship and socialist state-owned enterprises, known as SOEs. That’s state-owned, as in government-owned.
SOEs own and control nearly 75 percent of the world’s oil and gas reserves. The largest are Saudi Arabia, Russia, China, Iran, Venezuela (our nation’s fourth-largest importer of oil), Brazil and Malaysia. Multinational energy companies as a whole comprise barely 10 percent ownership.
Through their national energy companies, banks and sovereign wealth funds, SOEs are able to move huge amounts of national resources — money — to their investments with essentially the wave of a wand, often with complete secrecy.
Not surprisingly, more than a few SOEs already have stakes in our Rocky Mountain and neighboring states’ natural resources.
The rise of SOEs should be a serious concern for all Americans, as those companies have unfair competitive advantages that multinationals like Valero and NuStar, based in free-market capitalist nations with checks and balances, can never have. Nor should they.
Our congressional leaders in Washington need to stop with the redundant STOCK Act distractions and focus on championing the needs of our free markets; talk to, not at, one another and promote an environment that encourages innovation, job growth, and education — real and sustainable job growth born of necessity and opportunity rather than the same old fear-and-loathing routine we’ve come to expect from too many politicians.
If our nation and its issues have grown too big, too diverse, and too complex for our Washington leaders to handle, then they need to admit it and return a chunk of our federal tax dollars back to our states.
Shucks, even a small portion of the U.S. military’s $667 million advertising budget alone could go a long way to fund support for education in our home states in securing our nation’s future. We sure could use it here in western Colorado, no doubt about that.
The STOCK Act. Really? Curious that the one thing both sides of the aisle can agree on these days happens to be about themselves.