Stock market trading is back in the spotlight after a New York Times analysis found that 97 members of Congress were involved in stock market transactions that could be considered a conflict of interest.
The findings, which revealed the trading of 49 Republicans and 47 Democrats, are the latest report highlighting an ongoing issue in politics of elected leaders being accused of possible insider trading.
Rep. Abigail Spanberger (D-VA), an outspoken critic of stock market members in Congress, said it only weakens the trust Americans have in their elected representatives.
“What we want to make sure is that in January 2020, when we had secret briefings about a potential pandemic, nobody can leave, call their stockbroker and say, ‘I want you to put money into Pfizer. and Clorox and dump these other stocks,” Spanberger said on Yahoo Finance Live (video above). “Whether it was ill-intentioned or not, those examples are real.”
Spanberger added that the “perception even that those actions that followed briefing 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 significant wealth that they elected to have in individual stocks that have already chosen to abide by the legislation Congressman Roy and I lead along with 65 other members of Congress.”
‘We even remove the perception’
That proposed legislation — the TRUST in Congress Act — would require “members of Congress and their spouses and dependent children to place certain assets in blind trusts and for other purposes.” The bill was first introduced by Spanberger and Rep. Chip Roy (R-TX) and now has a total of 65 additional co-sponsors from both political parties.
Spanberger stated that she and Roy came up with the idea for the legislation after the Justice Department announced in March 2020 that it would investigate certain senators to determine whether they were acting ahead of the stock market crash caused by the coronavirus pandemic.
Former Senator Richard Burr (R-NC), who at the time chaired the Senate Intelligence Committee and received confidential briefings about the emerging threat of the coronavirus pandemic, and his wife sold numerous shares after those briefings, according to an investigation by ProPublica and The Center. for Responsive Politics.
Although Burr denied the charges and the Justice Department closed its investigation into his trade actions in January 2021, the damage had already been done.
“That motivated Texas Republican Chip Roy and I to write this legislation to say, ‘Let’s eliminate any opportunity for inappropriate behavior or the perception of conflicting trade,'” Spanberger said. “So we said, it’s very simple. You can’t own individual stocks and you can’t buy or sell. You leave that to a professional so that every time we vote, the American people make sure there is no conflict and we even take away the perception.”
A similar bill to Spanberger and Roy’s proposal – sponsored by Sens. Jon Ossoff (D-GA) and Mark Kelly (D-AZ) – was filed with the Senate earlier this year. It would prohibit members of Congress and their immediate family members from transacting stock transactions while in office and take the entire legislature’s salary if they break the rules.
As it stands, the STOCK Act, passed in 2012, was intended to provide transparency in stock transactions by lawmakers, who were required to report those transactions within 45 days of the transactions. But apart from the New York Times analysis, an ongoing Insider investigation has found that 72 members of Congress have broken that law.
“There is report after report of lawmakers buying or selling various stocks that certainly seem to be related to the issues of the day, often issues of the day that we receive briefings about,” Spanberger said. “The heist is that it affects members of Congress, and I think there may be a hesitation for change.”
While House Speaker Nancy Pelosi (D-CA) is not a name on that list, she is among those who have previously expressed reservations about passing an updated bill, with some attributing her stance to her husband’s job as a participating venture capitalist. to the stock market. In February 2022, Pelosi finally changed her stance and stated that a vote could take place sometime this year.
A bill ‘the American people want to see overwhelming’
Spanberger stressed that the intent of her and Roy’s bill is not to affect the financial security of those elected to serve in Congress, but rather to prevent them from being elected for the sole purpose of getting rid of the role. to benefit.
“We absolutely do not want to prevent someone from saving for retirement,” says Spanberger. “We want to be absolutely sure that the choice to run for Congress must be one of commitment to service to the country. It shouldn’t be one that gives a legislator another chance to make money in the stock market.”
Her bill would allow members of Congress to invest in mutual funds and ETFs rather than individual stocks.
“What is not allowed is that we go to a briefing where members of the intelligence community say that Russia will invade Ukraine and then members leave that secret briefing… we know that we are going to send US-made weapons and weapons systems to Ukraine.” (According to Insider, at least 20 lawmakers or their spouses own shares in arms makers Raytheon Technologies and Lockheed Martin, two companies that supply Western allies with weapons sent to aid Ukraine in its war against Russia.)
Evidence shows that Americans support the idea of excluding elected officials and their spouses from stock trading. A Morning Consult/Politico Poll found that 63% of all voters support a ban (69% of Democrats, 58% of Republicans), while 57% of all voters also support a ban on the families of lawmakers (59% of the Democrats, 54% of Republicans).
“It’s one that the American people overwhelmingly 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 have a make a decision or every time we enter a meeting with the CEO of a potential company that we are there because it is important to our constituents and our country, not because there might be any benefit to our stock portfolio.”
Adriana Belmonte is a reporter and editor on politics and health care policy for Yahoo Finance. You can follow her on Twitter @adrianambells and reach her at email@example.com.
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