How Politicians Grow Their Personal Wealth
Hint: It's Not From Their Government Salaries!
Correcting a Biased Trope
Alright, let’s get into the details of how members of Hunter’s Political Wealth Index actually expand their wealth.
But, first a misconception that we need to correct. No, most elected officials aren’t illegally taking bribes, getting extra income from lobbyists or raiding their campaign fundraising coffers for personal expenses. I said most, okay?
There are always outliers like New Jersey Democrat Bob Menedez, New York Republican George Santos, Texas Democrat Henry Cuellar, New York City Democrat Eric Adams and President-elect Donald J. Trump.
Fine, I can see why people are upset that “all politicians are crooks!”, but Citizens United opened the door for more “dark money” in politics. While rooted in valid complaints, the vitriol directed at the “media” and journalists — and the defunding of local reporting outlets — has also not helped the public trust our elected officials, become more educated about them or even track their finances and campaign donations.
Some countries like Australia have already implemented political donations caps from one individual and others like the United Kingdom have also recently been considering it. Maybe billionaires shouldn’t exist or at least not be able to spend over $200 million dollars in one election cycle to become a quasi-Cabinet member without being confirmed by an elected body.
Alright, what’s the point of all this, and what can realistically change? The Citizens United ruling isn’t likely to be overturned any time soon. Also, this newsletter is about the personal finances of politicians, so…
Even without illicit donations or political bribery, most U.S. officials are making way more than their base salaries per year in perfectly legal — albeit not necessarily moral — ways.
Let’s go over the numbers and reasons why.
1. Combined Net Worth: $2,398,603,853.06
The combined minimum net worth of all 551 Index members is $2.3 trillion. That’s a median net worth of $572k or nearly triple (297%) the median family net worth in the United States.
2. Net Worth Millionaires: 41%
At least 41% of the Index would be considered “net worth millionaires” i.e. people with at least $1 million in net worth — when excluding the value of their primary residence as an asset. That’s nearly double the Federal Reserve’s estimate (22%) for families in the United States. So, yes, collectively, members of Congress, the Supreme Court, the President and the Vice President are more wealthy than their constituency.
3. Asset-Driven Income: $180,642,265 to $750,131,809
In one year, the 551 Index members reported making between $180 million and $750 million solely on asset-driven income i.e. money off of their investments. That total does not include any of their salaries, direct compensation, speaking fees or that of their spouse or dependent children. That’s an average of an extra $327k in income per member per year or almost double the salary of a member of Congress ($174k).
Only 11% of members reported no asset-driven income but remember, the minimum value for a reportable asset is $1,000.
3. Minimum Stock-Driven Income: $22,997,576
Once again, in one year, at least 12.7% of Index members’ income came from publicly traded stock (options or corporate bonds) owned directly by them or their immediate family members (spouses or dependent children). Put simply, our elected officials made at least $23 million from stocks that you can trade. That averages to $41k per Index member.
Keep in mind that these figures are based on the minimum reported values and only include stocks directly held, not ones in their retirement accounts or trusts.
Only 21% of U.S. households directly owned stocks with a median portfolio value of only $15k in 2022. For as much as people fixate on “the markets,” not many families are actively trading stocks.
Why Does It Matter?
The main reason we started Hunter’s Political Wealth Index is to explore that extra $327k in average annual income. No other entity does this because it’s tedious work that involves hundreds of hours of manual data entry and fact-checking to ensure our exclusive database reflects the legally self-reported information of Index members to their various ethics offices.
We’d argue the $327k influences Index members’ decisions when it comes to policy-making, regulating and voting, at the very least on a subconscious level.
How often have you made decisions in your personal life that negatively affected your family’s financial wealth?
Would you make decisions to benefit the public good and the country even if they cost you money personally? That’s what we as voters in the United States ask of our public officials.
Would you vote to cut government spending if it meant you’d lose money on your stocks in government contractors?
We’ll also go beyond that 12.7% of income that people fixate on to explore how Index members grow their wealth through various means: real estate investing; privately-held stocks; government bonds; bank accounts; retirement accounts; business income; trusts; cryptocurrency; loans; deferred compensation; pensions; retirement accounts, etc.