Congressional Conflicts: Like Pelosi, NJ Rep. has made tens of millions from Wall Street

By Mark Stricherz
The Center Square

To the dismay of her critics, U.S. Rep. Nancy Pelosi has made millions from Wall Street while in Congress, but the California Democrat is not alone. U.S. Rep. Josh Gottheimer, a New Jersey Democrat, has also made a fortune, pursuing an aggressive and sophisticated investment strategy similar to Pelosi’s. It is one that may have benefited from a perch on Capitol Hill, a family member with venture capital expertise, and extensive use of a financial tool known as call options, an investigation by The Center Square found.

Gottheimer’s net worth increased by almost $40 million in two years, according to Quiver Quantitative, a website that tracks members of Congress’s financial dealings. He saw his wealth skyrocket from $11.05 million in 2019 to $50.5 million in 2021. Despite a dip in his net worth, the 50-year-old lawmaker is the 36th-richest on Capitol Hill and one of its most frequent traders.The Center Square looked at Gottheimer’s House financial disclosure reports from 2017, his first year in office, to last year. Gottheimer made much of his fortune through the purchase of call options, a sophisticated financial security that can act like lottery tickets or premium, refundable concert tickets.Gottheimer first made extensive use of them in 2019, when he bought 47 call options worth $1.3 million to $3.4 million. Each call was for stock in Microsoft Corp, the Redmond, Washington-based computer giant. The year was notable because Microsoft was competing with rival Amazon for a $10 billion cloud-computing contract from the Pentagon.In mid-to-late March 2019, Gottheimer bought six out-of-the-money or at-the-money options in Microsoft worth as much as $140,000 with various expiration dates, the largest amount he had purchased in a single month. On April 10, The New York Times reported that Microsoft and Amazon were the two finalists for the contract. In addition to being a former Microsoft employee, Gottheimer served on the House Committee on Financial Services. The panel oversees public companies such as Microsoft, which, with a market capitalization of almost $1 trillion in 2019, was the largest in the country. In no other year has Gottheimer’s net worth increased the most in relative terms, from $11.05 million to $28.3 million.Gottheimer’s office in Washington did not return multiple voicemails asking for comment. Legislation to limit trading

Lawmakers’ investments are likely to come under greater scrutiny in the coming months.

House members have circulated several bills to ban stock trading by federal elected officials. One legislative proposal from U.S. Representatives Chip Roy, a Texas Republican, and Seth Magaziner, a Rhode Island Democrat, would bar members of Congress and their immediate family members from purchasing or selling stocks, but not the President or Vice President.

Craig Holman, a lobbyist for Public Citizen, a non-profit advocacy organization, said in an interview that the time for a ban is propitious.“We’re going to pass a bill this year,” Holman said in an interview, adding that he expects the House to do so in March or April. Despite neither the House nor the Senate ever bringing up a bill for a vote, polls show that the public overwhelmingly supports a prohibition, and the Senate Committee on Homeland Security and Governmental Affairs has approved a legislative ban in each of the past two years.

On Jan. 14, the House Administration Committee approved a stripped-down bill that would prohibit members of Congress from buying stock, but it would permit them to sell stock and their spouses to trade stock.

Despite public perception that lawmakers day-trade on the job, most members of Congress avoid the stock market. In the last year, only 135 U.S. representatives and senators reported investing in securities, one-quarter of the 535 overall, according to capitoltrades.com, an online site that tracks lawmakers’ investments.

Of those who invest, some lose money. U.S. Rep. Marjorie Taylor Greene, a Georgia Republican who resigned Jan. 5, saw her fortune dip to $25.02 million in 2024 from $34.46 million in 2020, the year she was elected to Congress, according to Quiver Quantitative.

Of those who make money while in office, most do so from investing in real estate, and then only gradually. U.S. Rep. Donald S. Beyer Jr., a Virginia Democrat, increased his net worth from $97.55 million in 2015, the year he entered Congress, to $106.91 million in 2024, a fortune based almost entirely in real estate investments, according to Quiver Quantitative.Even lawmakers who get rich quickly don’t do so through the stock market. U.S. Rep. Byron Donalds, a Florida Republican, has gotten rich while in Congress, from the $81,000 he and his wife had in 2020, the year he was elected, to $4.4 million today, according to Quiver Quantitative. Yet, $3.8 million of his fortune comes from ownership interests in business. Donalds’s wife, Erika, is founder and chairwoman of OptimaEd, an education firm.

Of lawmakers who make money mainly from the stock market, former House Speaker Pelosi is the best known. When she entered Congress, in 1987, her net worth was roughly $1 million to $3 million, according to published reports. Today her fortune is $275.6 million, according to Quiver Quantitative. Roughly half of her portfolio is invested in stocks and options.HEEDING THE CALL

Gottheimer invests even more heavily in Wall Street. Of his estimated net worth of $40.8 million, nearly three-quarters are in stocks and options. His financial portfolio is similar to Pelosi’s in one way, though: frequent purchases of call options.

The sophisticated financial tools are akin to renting stock rather than buying it: the investor pays a premium for the right, but not the obligation, to buy it at a fixed price before it expires. That makes them riskier than stocks, but they can make more money because the investor spends less money to benefit from the same stock move. A one-call option is worth 100 shares, so a move in the stock price magnifies the payoff.

After the Times’ story in April 2019, Gottheimer increased his purchases of call options in Microsoft. He bought ten call options in April worth as much as $290,000, eight in May worth a maximum of $330,000, and two in September worth as much as $500,000. On October 25, 2019, the Pentagon announced that Microsoft would receive the $10 billion contract. Wedbush securities analyst Daniel Ives called the contract a “paradigm changer” and predicted Microsoft’s stock value would increase by $10.On November 18, 2019, Gottheimer bought six deep-in-the-money call options on Microsoft stock, with premiums ranging from $100,001 to $250,000. Deep-in-the-money options are like buying nonrefundable tickets to a concert, even though the band members might get sick and cancel the show. The investor is unlikely to lose the whole investment and may make money if demand increases, such as the ban announcing this will be their farewell tour.

Holman, the lobbyist for Public Citizen, said Gottheimer’s trades raise the question of undue influence peddling.

“Anyone who uses call options is very bullish and quite confident that the stock market value will go up significantly,” Holman said in an interview. “This raises a lot of questions. The amount of money he gained alone is suspicious. That he did much of it through call options shows he was very confident and secure in the knowledge that his stock would increase significantly through a call option.”

Like Pelosi, whose husband, Paul, is the founder of a real estate and venture capital firm, Financial Leasing Services, Gottheimer keeps his assets jointly held with his spouse, Marla Tusk. She is general counsel at Tusk Strategies, a political consulting firm founded by her brother, Bradley. Bradley Tusk is also the co-founder and managing partner of Tusk Venture Partners, an early-stage venture capital firm that specializes in businesses in industries overseen and controlled by government, such as the online gambling site FanDuel.

“We understand regulatory risk better than any other venture capital firm…” Tusk Ventures company said on its website.

Gottheimer has not disclosed who manages his finances.“I’ve got an investment firm; it’s literally handed over,” he said in an interview on CNBC in January 2022. “I have literally no idea what they do, so that’s up to them what they buy and sell.”

Congress does not require members or staff to disclose key details of their trades, such as the date of the sale or the security price, so determining how much Gottheimer earned from his investments is unclear.

However, Professor Mahendrarajah Nimalendran, chair of the Department of Finance at the University of Florida, concluded that Gottheimer may have earned $300,000 on a call option in Microsoft stock he purchased on January 2, 2020. Gottheimer may have bought 100 call option contracts with a $140 strike price on stock trading at $152 a share. If he sold the option when it expired on January 15, 2021, when stock was $212 a share, the value of his option would have been $30, since the premium was likely $30. With 10,000 shares of Microsoft stock worth $30 a share, he would have earned $300,000.