Capitol Hill is brimming with millionaires, but if you think that most of the richest members of Congress got that way from working hard, guess again.
When you browse through the list of the richest members of Congress, one of the most common themes is that many of them married into wealth, regardless of gender.
The best-known beneficiary of spousal wealth is former Sen. John Kerry, D-MA, who recently left the Senate to serve as Secretary of State in the Obama administration.
Kerry’s massive wealth, estimated at somewhere around $200 million, derives almost entirely from the extensive holdings of his wife, Teresa Heinz Kerry, in the H.J. Heinz Company (NYSE: HNZ).
Others, like Rep. Jay Rockefeller, D-WV, and freshman Sen. Joe Kennedy III, D-MA, inherited parts of family fortunes built up by wealthy forebears.
Some have become millionaires while serving in Congress. While a generous salary of $174,500 per year certainly helps grow one’s wealth, many savvy lawmakers are able to use their positions to make very rewarding investments that can add hundreds of thousands, if not millions, to their net worth.
In fact, the richest members of Congress do better than even other wealthy Americans. An investigation by The New York Times found that the median net worth of U.S. lawmakers grew 15% from 2004 to 2010, while the growth in median net worth of the wealthiest 10% of Americans was negligible.
And during that same period, the median net worth of the average American decreased by 8%.
It’s little wonder that Congress has such a hard time relating to the financial struggles of the average American.
Here is a sampling of the richest members of Congress and where their wealth comes from:
Seven of the Richest Members of Congress
Rep. Michael McCaul, R-TX: According to the Center for Responsive Politics (CRP), McCaul has the greatest net worth among all the richest members of Congress, a fortune estimated at over $500 million. McCaul has risen from 25th place to first since he was first elected in 2005, helped in large part by the 2010 addition to his disclosure forms of “certain assets” that were gifts from the parents of his wife, Linda McCaul. Mrs. McCaul is the daughter of Clear Channel Communications CEO Lowry Mays.
Rep. Darrell Issa, R-CA: The Chairman of the House Oversight and Reform Committee made the kernel of his fortune by turning around a failing car alarm manufacturer, Steal Stopper. He has since built that into a fortune totaling $480 million. His money is managed by such big names as Blackrock, Alliance Bernstein, Goldman Sachs, Invesco and JPMorgan. Issa also owns significant amounts of real estate in California.
Rep. Jared Polis, D-CO: With an estimated net worth of about $215 million, Polis is like many of the richest members of Congress in that he has a large array of investments and real estate holdings. Before he was elected Polis founded two online businesses, Blue Mountain Arts and ProFlowers.com. He sold Blue Mountain in 1999 for $780 million and ProFlowers.com in 2006 for $477 million. He is a full or limited partner at several investment firms and venture capital funds.
Rep. John Delaney, D-MD: Delaney is one of the freshmen among the richest members of Congress, having been elected in November. Still, he is the sixth-wealthiest lawmaker with an estimated net worth of about $139 million. Delaney co-founded HealthCare Financial Partners Inc. in 1993, which was bought by Heller Financial Inc. in 1999 for $483 million. Delaney founded CapitalSource Inc. (NYSE: CSE), a commercial lender in Maryland, in 2000.
Sen. Richard Blumenthal, D-CT: Another wealthy member of Congress who married well, Blumenthal’s estimated net worth of just over $100 million puts him eighth. Cynthia Blumenthal, his wife, is the daughter of Peter Malkin, a real estate mogul in New York. Most of Mrs. Blumenthal’s assets are real-estate related and many are listed as worth over $1 million. That means the Blumenthal’s net worth could be far higher, as spousal assets listed as “over $1 million” could be worth much more.
Rep. Nancy Pelosi, D-CA: House Minority Leader Pelosi also married into wealth. Her husband, Paul, is a real estate investor and venture capitalist. The couple also owns a lot of real estate, including a vineyard in St. Helena, CA, worth between $5 million and $25 million. Her net worth soared by 62% in 2010. Pelosi’s purchase of 5,000 shares of Visa (NYSE: V) after its IPO in 2008 but during consideration of legislation concerning credit card companies landed her a prominent spot in “60 Minutes” segment on “soft corruption” in Washington.
Sen. Diane Feinstein, D-CA: Veteran lawmaker Feinstein married Richard Blum, president and CEO of private equity firm Blum Capital Partners LP. As is the case with Blumenthal’s wife, many of the assets listed as Blum’s fall into the “over $1 million” category, so her net worth could be well above the $71 million estimate by the CRP. Blum’s wealth includes investment partnerships, limited liability corporations and a stake in health club chain OZ Fitness Inc.
If you think Congress is just a collection of fat cats who have let the middle class down, make sure you vote here in our Money Morning poll: Should Congress Live Like the Rest of Us?
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