Last month, Salon reported that House Majority Leader Eric Cantor (R-VA) is personally invested in a fund that “aggressively ‘shorts’ long-term U.S. Treasury bonds, meaning that it performs well when U.S. debt is undesirable.” Cantor owns up to $15,000 in the fund, which is called the ProShares Trust Ultrashort 20+ Year Treasury ETF. Cantor, who leads the House GOP’s debt ceiling negotiations, would see his ETF rise dramatically in value if Republicans allow the country to default on its debt. And as Salon notes, Cantor recently broke off negotiations over raising the debt ceiling.
Yesterday, ThinkProgress interviewed a number of congressmen regarding ongoing debt negotiations. Asked about Cantor’s incentive to allow U.S. Treasury bonds to go into default, Rep. Pete Olson (R-TX) expressed disbelief in the story. Olson refused to believe that Cantor would do such a thing, and called into question Salon’s reporting. Olson condemned the ETF, saying Cantor does not have it in his “character” to make that type of cynical investment:
FANG: Salon, the online newspaper, has reported that Congressman Cantor is invested in an ETF that basically shorts U.S. Treasury notes, meaning that if there is a default because negotiations break down or for whatever reason, he makes a lot of money. Do you think that’s an ethical thing to do?
OLSON: I can’t give any comment to that, I have no knowledge of that. Eric Cantor is a great guy, he has the highest ethics. I suspect, I have a lot of doubts about the veracity of that report out of Salon.
FANG: So you haven’t heard that he’s invested in an ETF that shorts U.S. Treasury notes? [...] If that is true, do you think that’s a responsible thing to do?
OLSON: I’m not going to go down that road because I don’t think its true. The Eric Cantor I know is one of the most ethical members of Congress. I mean, I’m not going to comment on that Salon thing because I don’t feel — I have no knowledge of it again. It’s not the man’s character, its not the Eric Cantor I know.
If Olson questions the “veracity” of Salon’s reporting, he could read similar reports from the Wall Street Journal, or just simply check out the personal finance disclosure revealing Cantor’s investments. A copy of Cantor’s most recent disclosure filing can be found here, and a screen shot of the ProShares investment is below:
Cantor does have some history with conflicts between his duties as a public servant and his own financial fortune. Last year, ThinkProgress reported that Cantor ran to the defense of mortgage companies and pushed back against efforts to solve the mortgage crisis. As he opposed efforts to stop “robo-signing” abuses and implement foreclosure mitigation strategies, Cantor never disclosed that much of his wealth is rooted in his family’s mortgage business. Cantor owns stake in a Virginia mortgage company worth hundreds of thousands of dollars. During this time period, Cantor’s wife was the head of a bank that had a mortgage business with one of the highest foreclosure rates in the country. (She has since left the company.)