Senator Jeff Merkley (D-OR) speaks alongside members of the U.S. Senate Banking, Housing, and Urban Affairs Committee during a news conference to discuss the details of the Ending Trading and Holdings in Congressional Stocks (ETHICS) Act at the U.S. Capitol in Washington, D.C., U.S., April 18, 2023.
Sarah Silbiger | Reuters
A bipartisan group of senators on Wednesday launched a renewed effort to ban members of Congress from trading stock.
“Congress should not be here to make a buck,” Sen. Josh Hawley, R-Mo., said at a press conference Wednesday on Capitol Hill. “There is no reason why members of Congress ought to be profiting off of the information that only they get.”
The proposal is the latest chapter in a yearslong saga in Congress to pass regulations that limit lawmakers’ ability to buy and sell stocks, and the first one to get formal consideration by a Senate committee — in this case the Homeland Security & Governmental Affairs Committee on July 24.
Ethics experts say that legislators’ access to the kind of information they receive gives them the potential of having an unfair advantage to the investing public.
Wednesday’s amendment to an existing stock trading ban bill would immediately forbid members of Congress, the president and the vice president from purchasing stocks and other covered investments. It would also give lawmakers 90 days to sell their stocks.
Sens. Hawley, Jon Ossoff, D-Ga., Jeff Merkley, D-Ore., and Gary Peters, D-Mich., negotiated and announced the new details.
If passed, the bill would also prohibit lawmakers’ spouses and dependent children from trading stocks, beginning March 2027. Also starting that year, the U.S. president, vice president and all members of Congress would have to divest from any covered investments.
The penalty for violating the divestment mandate, as proposed by the senators, would cost a lawmaker the greater amount of either their monthly salary, or 10% of the value of each covered asset in violation.
The effort to bar members of Congress from trading stocks has been an uphill battle since at least the start of the Biden administration.
Ossoff first introduced a ban in 2021 and put his own stock portfolio in a blind trust as an example.
The effort was turbocharged by disclosures that several senators made very profitable trades in the early days of the Covid-19 pandemic, when members of Congress were getting classified briefings that warned of how disastrous the virus could be for the U.S. economy. The FBI launched insider trading investigations into three senators, but eventually ended the probe without making any charges.
The effort picked up more steam ahead of the 2022 midterm elections, after former Democratic House Speaker Nancy Pelosi dropped her opposition to it.
Pelosi’s husband is a multimillionaire investor Paul Pelosi, who regularly makes large and profitable stock trades. The then-speaker had previously written off the trading ban as a misguided effort to prevent lawmakers from participating in the “free market economy.”
