Push to ban members of Congress from trading stocks is gaining momentum: NPR
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Almost 10 years ago, Congress overwhelmingly passed the STOCK Act – requiring members and their spouses to disclose when they buy or sell stock. The rare bipartisan bill swept through both houses after a series of national news reports raised questions about whether lawmakers were profiting from their work.
Now there’s a bipartisan push again — this time to ban lawmakers from trading individual stocks. Supporters say it is important to take steps to remove any doubts or accusations of conflicts of interest that may arise from members using information from classified briefings or committee meetings to gain advantage. money in the market.
House Speaker Nancy Pelosi, D-California, doesn’t personally trade stocks — her husband does, and the trades are reported regularly.
Asked earlier this month about new efforts to change the law to ban members of Congress from trading, the speaker backed the current system.
“We are a free market economy. They should be able to participate,” she said.
But the current law has a mixed record. Reports filed by lawmakers revealed trades by members of both parties in 2020 that generated profits after briefings on the severity of the pandemic. The Department of Justice reviewed several cases but ultimately did not file charges.
And a host of critics say too many members of Congress are not filing the reports required under the rules, or filing them months late, and there are no real consequences.
Kedric Payne, general counsel for the Campaign Legal Center, said polls overwhelmingly show support for the law change.
“Members of Congress are finally seeing that the public wants to know they’re not acting in their self-interest when making official decisions,” Payne told NPR. His group has filed complaints with the Congressional Ethics Office and the Senate Ethics Committee detailing violations of the current law. Payne says there have been more than 50 cases in the past year where members have failed to disclose their stock trades within the required time frame.
The desire to further restrict how members can invest has united members from all political walks of life, from liberals like New York Democratic Rep. Alexandria Ocasio-Cortez to conservative Texas Republican Chip Roy.
Bills introduced in the House and Senate would ban the trade for lawmakers; others extend the prohibition to spouses and other family members.
Pelosi is a good example. NPR recently reported that investors are tracking Pelosi’s husband’s trades — even when spouses comply with disclosure rules, investors believe they may have an inside track.
Top House Republican is a new voice in reform, but GOP members are splitting
House Minority Leader Kevin McCarthy, R-California, thinks it’s now time for lawmakers to stop buying and selling individual stocks.
“I can’t imagine being a Speaker of the House with the power of what can come before the committee, you name them and what can come to the ground and trade millions of dollars worth of options. I just don’t think that the American people think it’s true,” McCarthy told NPR earlier this month. He noted that he is not currently trading individual stocks.
McCarthy is in line to be president if his party takes control of the chamber in November. He said he was still working out the details of who would be covered and whether he would advance his own bill or consider changing House rules if the GOP wins a majority after the midterms.
But as McCarthy adds her voice to a new push to change the law, her own members are divided.
Colorado Republican Ken Buck told NPR, “I think it’s a good idea” to ban members from trading stocks. He doesn’t think the members are abusing the system or acting inappropriately, but said it was an appearance issue.
“I don’t know of anyone who took advantage of it. But I know members of the public are wondering if we’re getting inside information,” Buck said.
Texas GOP Rep. Pete Sessions disagrees with the need for a new law. “I don’t believe it’s necessary,” he said. Still, he agreed with Buck that it is important to demonstrate to the public that there is no conflict of interest and pointed out that current law requires timely filing of reports or to be liable to a fine.
Sessions, yet, admitted to failing to disclose a transaction within the required time.
“I should have registered it, but I didn’t have the papers on it or something. So I think I asked for a waiver at least once, maybe twice. But I reported it within a reasonable time,” Sessions mentioned.
Nebraska GOP Rep. Don Bacon is torn about whether a new law is needed.
“I have mixed feelings. I don’t have any myself. I do mutual funds. I think there’s a risk if you have stocks. A lot of the laws we’re working on could have an impact. Committee hearings, you hear things. So I think I would be very careful if you have any actions,” he said.
Spousal Rules Debate
California Republican Representative Darrell Issa, one of the wealthiest members of Congress, stopped trading stocks once he was elected. “I made this decision because it showed abundant simplicity in that there are no conflicts – other than the vast conflict of I want the country to be well.”
He said it was time to update the law. He added members of the judiciary must also be covered. But he said there were practical issues to be resolved in implementing an “outright ban” related to when new members are sworn in and transitioning to any eventual new rules. He pointed to the personal assets of some legislators that they held before taking office and the situation of many spouses.
“We have spouses who are CEOs of public companies, we have many who are employees of companies who grant stock options which they then sell,” Issa told NPR.
Facing pressure on the issue, Pelosi asked the panel overseeing the House last week to investigate the workings of the current law and consider increasing the fines.
“The Speaker believes that sunlight is the best disinfectant and has asked House Administration Committee Chair Zoe Lofgren to look into the issue of MPs’ unacceptable non-compliance with the reporting requirements of the STOCK Act, including the possibility of harsher penalties,” Pelosi spokesman Drew Hammill said. noted. He added, “To be clear, insider trading is already a serious federal criminal and civil offense and the President strongly supports strong enforcement of relevant laws by the Department of Justice and the Securities and Exchange Commission.”
pelosi supports extending the law to federal judges, but faces growing calls from its own members in an election year to go further.
Talk about making the rules consistent between the 3 branches of government
White House Economics Director Brian Deese told CNBC last week that the idea of a ban on lawmakers matching restrictions for executive power “certainly makes sense.”
“One of the things we need to do at all levels is to restore trust in our institutions — whether it’s Congress and the legislature or whether it’s the Fed and other. And so anything we can do to try to restore that faith, I think, makes a lot of sense,” Deese said.
White House press secretary Jen Psaki dodged a question on Tuesday when asked about the president’s stance on allowing lawmakers to swap stocks. She noted that President Biden did not trade stocks while serving in the Senate.
PSAki said Biden “believes everyone should be held to the highest standard.” But she added, “He will let members of the leadership of Congress and members of Congress determine what the rules should be.”
Recently, the Federal Reserve added restrictions following an investment controversy from two officials. Fed Chairman Jerome Powell was pressed last week about emerging disputes by Sen. Jon Ossoff, D-Ga., who last week introduced trade ban legislation for lawmakers and their spouses. Powell noted that his agency’s new rule will “effectively terminate any ability to actively negotiate of any senior Fed official.”
“I absolutely agree that public confidence that we are working for its benefits is absolutely essential,” Powell said.
Push to ban members of Congress from trading stocks is gaining momentum: NPR
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