Congressional stock trading is back in the public eye following a New York Times analysis that found 97 members of Congress engaged in stock market transactions that could be seen as conflicts of interest.
The results, which highlighted the trading of 49 Republicans and 47 Democrats, are the latest report to highlight an ongoing issue in politics of elected leaders being accused of possible insider trading.
Representative Abigail Spanberger (D-VA), an outspoken critic of stock-trading members of Congress, said it only undermines the confidence Americans have in their elected representatives.
“What we want to make sure back in January 2020, when we had classified briefings about a potential pandemic, is that no one can go, call their stockbroker, and say ‘I want you put money into Pfizer and Clorox and dump these other stocks,’” Spanberger said on Yahoo Finance Live (video above). “Whether it was malicious or not, those are real examples.”
Spanberger said that this attitude, even though those actions were following that information, made this choice – which continues to erode the confidence of the American people. We have examples of members of Congress who came to Congress with substantial wealth that they chose to have. in individual stocks that have already chosen to comply with the legislation led by Congressman Roy and myself and 65 other members of Congress.”
‘We’re getting even the attitude’
That proposed legislation – the TRUST in Congress Act – would “compel members of Congress and their spouses and dependent children to place certain assets in blind trusts, and for other purposes.” Spanberger and Rep. The bill was first introduced by Chip Roy (R-TX) and now has a total of 65 additional co-sponsors from both political parties.
Spanberger said she and Roy came up with the idea for the legislation after the Justice Department announced in March 2020 that it would be investigating certain senators to determine whether they traded before the stock market crash that triggered the coronavirus pandemic.
Former Senator Richard Burr (R-NC), who was then chairman of the Senate Intelligence Committee and received secret briefings about the emerging threat from the coronavirus pandemic, and his wife sold a lot stock shares after those briefings, according to an investigation. by ProPublica and the Center for Responsive Politics.
Although Burr denied the allegations and the Justice Department ended its investigation into his trading actions in January 2021, the damage was done.
“That’s what prompted Chip Roy, Republican of Texas, and I to write this legislation to say ‘Let’s remove any opportunity for inappropriate behavior or adverse trade perception,'” Spanberger said “So we said: Yes it’s very simple. You cannot own individual stocks and you cannot buy or sell them. Whether you put your money into a diversified fund or roll your money into a blind trust, what’s there is left. You leave it up to the professional to handle that so every time we’re taking a vote, the American people are assured there’s no conflict and we’re even removing the perception.”
A bill similar to the one proposed by Spanberger and Roy – sponsored by Sens. Jon Ossoff (D-GA) and Mark Kelly (D-AZ) – entered the Senate earlier this year. It would prohibit members of Congress and their immediate family members from making any stock transactions while serving in office and would confiscate a lawmaker’s entire salary if they violate the rules.
As it stands, the STOCK Act, passed in 2012, aimed to provide transparency in stock trading by regulators, who were required to report those trades within 45 days of the transactions. But, separate from the New York Times analysis, an ongoing investigation by Insider revealed that 72 members of Congress violated that law.
“There’s been report after report of legislators buying or selling different different stocks that seem to be related to the issues of the day, often the issues of the day that we’re getting information on,” Spanberger said. “The problem is that it affects members of Congress, and I think there is perhaps a reluctance to change.”
While House Speaker Nancy Pelosi (D-CA) is not on that list, she is among those who have previously expressed reservations about passing an updated law, some of whom attributed her position to her husband’s position as a venture capitalist who participates in the stock. market. In February 2022, Pelosi finally reversed her position and said a vote could happen sometime this year.
Bill ‘the American people really want to see’
Spanberger emphasized that the intent of her and Roy’s bill is not to affect the financial security of those elected to serve in Congress but to prevent them from being elected solely to profit from the role.
“We don’t want anyone to be deterred from saving for retirement,” Spanberger said. “We want to ensure that the choice to run for Congress will be one of commitment to service to the country. A legislator should not have a new opportunity to make money on the stock market.”
Her proposed bill would allow members of Congress to invest in mutual funds and ETFs instead of individual stocks.
“What is not allowed is for us to go to a briefing where we have members of the intelligence community saying that Russia is going to invade Ukraine and then have members leave that classified briefing … we know we’re going to sending US-made weapons and weapons systems to Ukraine.” (According to Insider, at least 20 lawmakers or their spouses own stock in arms manufacturers Raytheon Technologies and Lockheed Martin, two companies that supply weapons to Western allies sent to help Ukraine in its war against Russia.)
Data shows that Americans support the idea of banning elected officials and their spouses from stock trading. A Council/Politico Morning Poll found that 63% of all voters support a ban (69% of Democrats, 58% of Republicans) and 57% of all voters support a ban. also on families of lawmakers (59% of Democrats, 54% of Republicans).
“It’s one that the American people really want to see,” Spanberger said, “and it’s one that bipartisan lawmakers across the political spectrum recognize the need to make this change to ensure that every time we are making a decision or every time we come in. meeting with a potential CEO of a company, that we are there because it concerns our constituents and our country, and not because there might be some benefit to our stock portfolio.”
Adriana Belmonte is a reporter and editor covering health care politics and policy for Yahoo Finance. You can follow her on Twitter @adrianambells and you can reach her at firstname.lastname@example.org.
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