Rep. Eric Cantor Will Profit in Stock Market if U.S. Goes into Default
House Democrats have accused House Majority Leader Eric Cantor (R-VA) of a conflict of interest in the debt ceiling debate.
Rep. Cantor has an investment in ProShares Trust Ultrashort 20+ Year Treasury ETF, a fund which has a short (a bet) against U.S. government bonds, reports Salon.com.
If the U.S. debt ceiling is not raised and the United States defaults on its debts, then Rep. Cantor will profit from the ProShares trust fund.
In response, House Democrats are circulating a resolution, which states that Rep. Cantor "stands to profit from U.S. treasury default, which thereby raises the appearance of a conflict of interest," and "may be sabotaging [debt ceiling] negotiations for his own personal gain."
"Majority Leader Cantor has compromised the dignity and integrity of the Members of the House by raising the appearance of a conflict of interest in negotiations with the executive branch over raising the debt ceiling."
Last year the Wall Street Journal reported that Rep. Cantor had between $1,000 and $15,000 invested in ProShares Trust. According to Rep. Cantor's latest financial disclosure statement, which covers the year 2010, he still has up to $15,000 in the same fund.
Cantor spokesman Brad Dayspring claims that Rep. Cantor owns $3,327 in the ProShares trust, but his congressional pension is invested in the G Fund of government bonds and is valued at over $263,000.
Dayspring said: "For the conspiracy theorists, they would have to believe that Eric would want to lose hundreds of thousands of dollars to make a few thousands in return. Putting aside the lunacy of it all, he would lose hundreds of thousands of dollars if he did what they suggest."
"The insinuation is so outrageous that it shows a fundamental lack of understanding about how the markets work, how the U.S. economy works. Any member of Congress who would seriously identify themselves with this would reveal a complete inability to understand the United States economy and basic investing."