Berkley spouse investments scrutinized

An analysis by the Wall Street Journal this week turned up 13 members of Congress or their spouses who made risky personal investments during the 2008 financial crisis, hedging that stock values would fall.

One of them was Dr. Larry Lehrner, the husband of Rep Shelley Berkley, D-Nev.

The story is here. It makes clear the practice is legal and there is no evidence of anything wrong. It said the transactions were duly reported as required by Congress.

But coming in an atmosphere where a number of members of Congress have criticized risky Wall Street practices that contributed to the nation's economic near-collapse, the Journal quotes former House ethics committee chairman Joel Hefley as saying such trading by lawmakers "doesn't look great."

A followup story in the Washington Post said the investments "underscore the potential conflicts on Capitol Hill between public policy and personal investments that have accompanied a sharp rise in stock market investing by lawmakers over the last two decades."

In an interview Wednesday, Berkley said she is generally unaware of how her husband's money is invested. Lehrner is a kidney specialist who was wealthy before they married in 1999 and who continues to hold many of his investments in his own name and trades them actively.

"It is not my money to make that determination," Berkley said. "It is Larry's money. It is not my money to control."

In a statement Berkley gave to the Wall Street Journal, she said "all trades were done by a licensed money manager without any input from my husband or me. This is exactly the way many people handle whatever monies they may have in the stock market."

Berkley aide David Cherry added that of Lehrner's investments, "the vast majority made when all accounts are examined were based on the market going up, not down."

Lawmakers are required to report the financial holdings by themselves and spouses each May. The Center for Responsive Politics at this website has summaries of the information reported by Berkley last year.

In the interview Wednesday, Berkley also said she sees a distinction between her husband's investments and the Wall Street mess, which she has criticized. In a February 23 speech, she said investment houses have acted "irresponsibly and recklessly," and should be "ashamed."

Lehrner was risking his own money through an exchange-traded fund, and knew the rules, she said.

"What people do in their individual portfolios is their business, as long as it is not harming anybody but themselves, or doing good for themselves," Berkley said. "As long as people know the rules of the game going into it, that is a different story."

Regarding Wall Street, "what we are talking about is giant financial institutions bundling thousands of toxic assets they knew were crap, selling them for a profit and then betting against them and making money by doing that, and paying their executive outrageous bonuses."

"When I rail against Wall Street excesses what I am talking about is there has to be some regulation of the unregulated, the derivatives, the exotic instruments that most of Wall Street can't explain, much less members of Congress.

"They are playing a very dangerous game with other people's money," Berkley said of investment firms. "That is what I want to regulate. I am not interested in exerting congressional authority over every 'put' on Wall Street."