I found last night’s 60 Minutes story on insider trading in Congress to be uneven, partially underwhelming and at times outright misleading. That Congress has access to insider information and does not have to sequester off their stock trades in ways that would allow them to profit from this information is beyond dispute. The simple fix would be to force every member of Congress to put their holdings into blind trusts. But the most difficult thing to pass through Congress is rules that the institution would impose on its own members. Indeed, the STOCK Act, the vehicle that would ban insider trading by members of Congress, has a paltry 5 co-sponsors, and Steve Kroft couldn’t find many members who even knew of its existence.

But the actual evidence for insider trading among members of Congress in the story was fairly weak. The most damning story in the piece, which was based on a book by conservative activist Peter Schweizer (waiting for 60 Minutes to pick up a Greg Palast story) had nothing to do with insider trading, but just run-of-the-mill corruption through earmarking from former House Speaker Dennis Hastert, who steered a transportation project to benefit some of his land holdings.

The best evidence actually grounded in the story 60 Minutes was trying to tell concerned Spencer Bachus, who apparently bought options against the stock market – basically betting on the market to fail – after hearing privileged information from Hank Paulson and Ben Bernanke at the apex of the financial crisis in 2008.

On the evening of September 18, at 7 p.m., Bachus received [a] private briefing for congressional leaders by Hank Paulson and Federal Reserve Bank Chairman Ben Bernanke about the current state of the economy. They sat around a long table in the office of Nancy Pelosi, then the Speaker of the House. These briefings were secretive. Often, cell phones and Blackberrys had to be surrendered outside the room to avoid leaks.

What Bachus and his colleagues heard behind closed doors was stunning. As Paulson recounts, “Ben [Bernanke] emphasized how the financial crisis could spill into the real economy. As stocks dropped perhaps a further 20 percent, General Motors would go bankrupt, and unemployment would rise . . . if we did nothing.” The members of Congress around the table were, in Paulson’s words, “ashen-faced.” [...]

The meeting broke up. The next day, September 19, Congressman Bachus bought contract options on Proshares Ultra-Short QQQ, an index fund that seeks results that are 200% of the inverse of the Nasdaq 100 index. In other words, he was shorting the market. It was an inexpensive way to bet that the market would fall. He bought options for $7,846 on a day when the Dow Jones Industrial Average opened at 8,604. A few days later, on September 23, after the market had indeed fallen, he sold the options for over $13,000 and nearly doubled his money.

Definitely a lot of smoke there. But the rest of the story didn’t really connect. 60 Minutes clearly wanted to go after the big fish, John Boehner and Nancy Pelosi, so Kroft could confront them at their weekly press conferences. But the evidence they had just didn’t scan, as Ryan Grim points out. Boehner bought health insurance stocks before the public option died. But they were purchased by his financial advisor without his knowledge. And Boehner didn’t have much to do with the public option’s demise – that was reserved for Blue Dogs and Joe Lieberman.

The Pelosi hit was even worse. The story claims that Pelosi bought 5,000 shares of Visa in an IPO while legislation on credit card reform was before the House. I’ll give this one to Ryan:

“Former House Speaker Nancy Pelosi and her husband have participated in at least eight IPOs. One of those came in 2008, from Visa, just as a troublesome piece of legislation that would have hurt credit card companies began making its way through the House. Undisturbed by a potential conflict of interest, the Pelosis purchased 5,000 shares of Visa at the initial price of 44 dollars. Two days later it was trading at $64. The credit card legislation never made it to the floor of the House,” CBS reports.

But CBS leaves out that fact that the bill passed out of committee at the very end of the legislative session, as Congress was dealing with the Wall Street implosion and bailout, and that the chamber then adjourned until the election. More importantly, Democrats didn’t have the votes for it in the Senate and the notion that President Bush would have signed it if they did is far-fetched.

CBS goes on to report: “Congresswoman Pelosi pointed out that the tough credit card legislation eventually passed, but it was two years later and was initiated in the Senate.”

The implication is, apparently, that the Senate forced Pelosi’s hand. Throughout 2009 and 2010, the House consistently passed stronger and more progressive legislation than the Senate, but in the scenario laid down by CBS, it was the other way around when it came to credit card reform. But in 2008, before the stock transaction, the House had already passed the Credit Cardholders’ Bill of Rights over the objections of industry lobbyists.

The idea that the Senate were the real crusaders and fatcat Pelosi dragged her feet on the bill makes no sense at all, especially because the credit card reform didn’t have a chance to pass into law until George W. Bush left the White House.

The fact that Eric Cantor, who made lots of dodgy trades, including a short on US Treasuries during the debt limit debate, wasn’t mentioned at all in the piece, and that 60 Minutes is planning a profile of Cantor, tells you a lot about the story.

None of this means that insider trading isn’t a problem in Congress that needs to stop. But I’d rather hear what Jack Abramoff has to say about it over 60 Minutes.