A a growing number of Democrats are calling for a ban on individual stock trading between members of Congress, their spouses, and their top aides.
The movement – still in its infancy in Congress – marks the first major attempt to tighten the rules governing the financial operations of Congress in more than a decade. Democratic candidates and consultants, who have largely ignored the issue in previous electoral cycles, hope the party will send a strong anti-corruption signal in November, but caution against the prospect of co-opting Republicans if Democrats don’t act fast enough.
The latest lawmakers to join the case are Democratic Senators John Ossoff, Georgia and Mark Kelly, Arizona, who on Wednesday introduced legislation to bar members of Congress, their spouses, and dependent children from trading in individual shares.
“Members of Congress should not play the stock market as long as we conduct federal policy and have exclusive access to confidential information,” Ossoff said in a statement.
In the interests of transparency regarding potential conflicts of interest, federal law currently requires members of Congress and their spouses to report individual share transactions, but does not prohibit trading itself. This opens up opportunities for lawmakers to de facto engage in “insider trading” by taking advantage of the as yet undisclosed information they receive to make trade decisions, or simply allow lawmakers to develop financial conflicts of interest when it comes to decision making. , supporters of the government say well.
Pennsylvania Lt. Gov. John Fetterman, who is running for Democratic Senator for his state, announced his support for the ban on Wednesday, calling current trade practices “a clear conflict of interest.”
“Legislators should not profit from the same companies they are supposed to regulate based on non-public information,” the statement said.
Fetterman is blocked in the controversial Senate primary, and one of his top rivals, Rep. Conor Lamb (Democrat from Pennsylvania), is co-founder a law prohibiting the trading of shares by members of Congress and their senior aides. A spokesman for Lamb told HuffPost that Lamb also supports a ban on the sale of spouses or dependents.
Following Fetterman’s statement, Durham County Commissioner Nida Allam (D), who is running for North Carolina’s Open 6th Congressional District, expressed its consent on Twitter.
And Illinois Rep. Delia Ramirez (D), who is running for Illinois’s new 3rd congressional district, also supported the ban on Tuesday.
These new endorsements of a ban on trading in Congress shares came after he appeared on monday that Ossoff was planning to introduce a new law to the Senate banning the practice.
Ossoff won his second round of the 2021 election thanks in part to attacks on his opponent, incumbent Republican David Purdue, for suspicious stock trading in the early days of the coronavirus pandemic.
Ossoff’s bill consolidates several existing bills that would prohibit legislators from trading in stocks.
His bill complements Virginia Rep. Abigail Spahnberger’s bipartisan bill, the Transparent Representation Act supporting service and the credibility of Congress (CONFIDENCE Act), which will prohibit trading in shares of members of Congress, their spouses and dependent children. The bill that Spahnberger introduced in January 2021, total 15 coauthorsbut a third of those who support him are Republicans.
Her bill also received the support of a wide range of liberal and conservative groups of good government. Organizations from the latter camp include libertarian organizations Americans for Prosperity, FreedomWorks, and the National Taxpayers Union.
Spanberger’s spokesman said the bill has picked up momentum on Capitol Hill in recent days.
“Just today, she spoke to members of the House of Representatives – on both sides of the aisle – who are interested in preventing insider trading in the halls of Congress and joining her bill,” the spokesman said in a statement. “She does not think this legislation is a matter of bias – it is a matter of good governance, a matter of eliminating perceptions of corruption, and a matter of putting civil service above stock portfolios.”
The spokesperson added that Spahnberger, a moderate Democrat in his seat, is refusing to accept donations from corporate PACs for the same reason.
“If you really think that Kevin McCarthy will do something about it if he becomes a speaker, I have a bridge to sell to you.”
In addition, Rep. Raja Krishnamurti (Illinois) and Senator Jeff Merkley (Oregon) introduced the Conflict Trade Ban Act in March. The Krishnamurti House bill boasts bipartisan support with co-sponsors, ranging from Alexandria Rep. Ocasio-Cortez (DN.Y.) on the left to Rep. Matt Goetz (R-Fla.) On the right. Unlike the Ossoff and Spahnberger bill, the Conflict Trading Ban Act prohibits only lawmakers and senior aides from trading in stock, but allows their spouses and dependent children to trade however they please.
Both proposed laws will continue to allow members of Congress to invest in blind trust and their own mutual funds and index funds.
But some say the claims of blind trusts are not enough. Lucas Koons, a populist Democrat running for the Missouri Senate, called blind trusts “bullshit” in the United States. tweet Wednesday afternoon.
“Prohibit Congress from owning shares,” he wrote. “If they break the law, lock them up.”
While these bills have garnered high-level attention, they are not expected to be considered in the House of Representatives or Senate anytime soon.
Speaker Nancy Pelosi, Calif., Whose husband is a venture and real estate investor and a prominent stock trader, rejected the idea of banning lawmakers from owning or trading shares at a December 15 press conference.
“We have a free market economy,” Pelosi said. “They should be able to participate in this.”
Pelosi’s response came in response to a question about an insider investigation into lawmakers’ failure to properly file the stock trading information required under the Congress Knowledge Trade Stop (STOCK) Act 2012. An investigation found that 49 lawmakers and 182 high-ranking congressional officials covered by the law failed to submit their disclosures of the Stocks Act in time.
House Democratic Group Chairman Hakeem Jeffries (DN.Y.), widely regarded as Pelosi’s heir apparent, was also reluctant to bring the bill up for discussion in a recent interview with Insider. He told the publication that he was “not familiar” with the accounts.
Congressional Republican leaders, who tend to oppose additional rules of ethics more than Democrats, felt an opportunity to capitalize on Democratic internal divisions.
House Republican leader Kevin McCarthy, Calif., Said he is considering a ban on individual commerce if Republicans lead the House in November. He focused on the volume of transactions conducted by Pelosi’s husband.
“I just think that if you are the speaker of the chamber, you control what comes into the hall, what goes through the committee, you have full authority to do whatever you want – you cannot trade millions of dollars,” he said. This was announced on Tuesday by the New York Post.
Several Democratic strategists stressed that while they do not take McCarthy’s flirtation with the ban seriously, it is still good policy – and good policy for Democrats – to support a trade ban. More than three-quarters of Americans support a trade ban on members of Congress, according to a poll by a conservative group earlier this month.
“If you really think that Kevin McCarthy will do something about it if he becomes the speaker, I have a reason to talk you into it,” said the Democratic consultant, who asked to remain anonymous for professional reasons. “But it makes it more important than ever for Democrats to take a clear line by passing a law prohibiting it and getting the GOP to vote no.”
A similar assessment was expressed by Eric Koch, a Democratic strategist from New York. “It’s a no brainer,” said Koch. “Of course, Democrats and Democratic candidates must support Senator Ossoff’s bill.”
Progressive candidates, stuck in competitive Democratic primaries, are already signaling that they plan to use support for the ban as a contrast to more moderate rivals. Fetterman, Allam, and Ramirez are running as progressives in races with more than one Democratic candidate.
The Workers’ Families Party, which has supported nine congressional candidates in this cycle, is encouraging the ban.
“Democratic lawmakers should rein in Wall Street, not try to get rich off privileged information and access,” Joe Dinkin, WFP’s director of campaigns, said in a statement. “We must end this practice, and we urge our approved candidates to do the same.”
According to Craig Holman, an ethics, lobbying and campaign finance lobbyist, while current congressional stock-trading legislation currently appears to be stalled, the same was said for STOCK in the fall of 2011, when it had everything. nine coauthors. rules for the nonprofit consumer group Public Citizen.
An episode of “60 Minutes,” in November 2011, about the trading of congressional stocks and the DC’s political intelligence industry, brought the issue to the attention of the entire country. Reporter Steve Croft even told Pelosi about her husband’s stock trading at a press conference. The STOCK Act, a protracted bill first introduced in 2006, expanded its co-sponsorship list from nine to over 180 in the week following the 60 Minutes report.
“We are now seeing the same public insider trading scandal in Congress due to the pandemic,” Holman said, noting the dubious deals of Senators Purdue, Leffler, Richard Burr (RN.C.), Dianne Feinstein (D.-California) and Jim Inhof (RR, Oklahoma) who spurred the investigation. “This legislation has the same legs as the RESERVES Act. As soon as the public intervenes, it becomes embarrassing for Congress to do the right thing. “
As for Pelosi’s public opposition, Holman hopes she will change her mind.
“I worked hand in hand with Nancy Pelosi for many years,” Holman said. “When she came out and declared her disagreement with this attempt, I was very stunned. I hope that the public pressure we are now seeing will force her to change course. I have a feeling that it will go away with or without her. “