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Almost 10 years ago, Congress has overwhelmingly passed the Stock Act — which requires members and their spouses to disclose when they buy or sell shares. The rare bipartisan bill was passed in both houses after a string of national news raised questions about whether lawmakers are profiting from their jobs.
Now there is bipartisan pressure again — this time to prevent lawmakers from trading individual stocks at all. Proponents say it is important to take the step to remove all suspicion or allegations of conflict of interest that may arise from members using information from confidential briefings or committee meetings to make money in the market.
House Speaker Nancy Pelosi, D-Calif., doesn’t trade stocks personally — her husband does and the transactions are reported regularly.
When asked earlier this month about new efforts to change the law to ban deliberation for members of Congress, the speaker backed the current system.
“We are a free market economy,” she said. “They should be able to participate in that.”
But the current law has a mixed record. Reports provided by lawmakers revealed deals made by members of both parties in 2020 that yielded profits after briefings on the severity of the pandemic. The Ministry of Justice reviewed several cases but ultimately did not file any charges.
Many critics say many members of Congress fail to submit reports required by the rules, or delay them for months, with no real consequences.
Cedric Payne, general counsel for the Campaign’s Legal Center, said polls show overwhelming support for changing the law.
“Members of Congress are finally seeing that the public wants to know that they are not acting in their own best interest when they make official decisions,” Payne told NPR. His group filed complaints with the Congressional Ethics Office and the Senate Ethics Committee detailing violations of existing law. Payne says there have been more than 50 cases in the past year of members not disclosing their stock trades in the required time period.
Efforts have been made to restrict how members can invest Members come from across the political spectrum, from liberals like New York Democratic Rep. Alexandria Ocasio-Cortez, to conservative Texas Republican Chip Roy.
Bills introduced in the House and Senate would prohibit lawmakers from deliberating; Others are extending the ban to spouses and other family members.
Pelosi is an example. NPR recently reported that investors are following Pelosi’s husband’s deals — even when the pair complies with disclosure rules, investors believe they can have an inside track.
The Republican House is a new voice in the reform campaign, but GOP members are divided
House Minority Leader Kevin McCarthy, California, believes that now It’s time for lawmakers to stop buying and selling individual stocks.
“I can’t imagine being a Speaker of the House with the authority of what would come before a committee, you could name it and what could be put to the floor and trade off options for millions of dollars. I don’t think the American people think that’s true,” McCarthy told NPR earlier. from this month. He indicated that he is not currently trading in individual stocks.
McCarthy is on the verge of being House Speaker if his party wins control of the chamber in November. He said he’s still tinkering with details on who he’ll cover, and whether he’ll introduce his own bill or consider making a change to House rules if the Republican Party gains a majority after the midterms.
But as McCarthy adds his voice to a new campaign to change the law, its members are divided.
“I think it’s a good idea” to ban members from trading stocks, Ken Buck, Republican of Colorado, told NPR. He doesn’t think the members are abusing the system or behaving inappropriately, but he said it’s an appearance problem.
“I don’t know anyone who has benefited,” Buck said. “But I know members of the public are wondering if we’re getting inside information.”
Texas Republican Representative Pete Sessions disagrees with the need for a new law. “I don’t think it’s necessary,” he said. He still agreed with Buck that it was important to show the public that there was no conflict of interest and noted that current law mandates timely reporting or a fine.
sessionsAnd However, He admitted that he failed to disclose the transaction within the required period.
“I should have registered it, but I didn’t have the paperwork or something. So I think I asked for a waiver at least once, maybe twice. But I reported it within a reasonable time,” Sessions said.
Nebraska Republican Representative Don Bacon is torn about whether a new law is needed.
“I have mixed feelings. I don’t have anyone myself. I have mutual funds. I think there are risks if you have stock. A lot of the legislation we’re working on could affect it. Committee hearings, you hear things. So I think I’d be really careful.” If you have stock.
Controversy over the rules of the couple
California Republican Representative Daryl Issa, one of the richest members of Congress, stopped trading stocks as soon as he was elected. “I made this decision because it brought so much simplicity that you don’t have any conflicts – other than the broad conflict I want the country to do well.”
He said it was time to update the law. Added members of the judiciary It must also be covered. But he said there are some practical issues that need to be worked out to implement a “total ban” regarding when new members will be sworn in and move to any New laws. He referred to the personal belongings of some deputies before they took office, and to the status of several spouses.
“We have pairs of CEOs with public companies, and we have a lot of them who are employees of companies that give stock options and then sell them,” Issa told NPR.
Facing pressure over the issue, Pelosi asked the House oversight committee last week to investigate how the current law works and consider increasing fines.
“The spokesperson believes sunlight is the best disinfectant and has asked House Governance Committee Chairman Zoe Lofgren to examine the issue of members’ unacceptable non-compliance with stock law reporting requirements, including the possibility of tougher penalties,” Pelosi spokesman Drew Hamill said. “To be clear, insider trading is indeed a serious federal civil and criminal violation, and the Speaker strongly supports the robust enforcement of relevant laws by the Department of Justice and the Securities and Exchange Commission,” he added.
Pelosi It does not support extending the law to federal judges, but faces increasing calls from its members in an election year to move forward.
Talk about making the rules consistent across 3 branches of government
The idea of a ban on lawmakers to match restrictions on the executive branch is “certainly reasonable,” White House economic director Brian Dees said on CNBC last week.
“One of the things we have to do across the board is to restore confidence in our institutions – Whether it is Congress and the legislature or whether this is the Federal Reserve and others. And so I think anything we can do to try to restore that faith is very logical.”
White House Press Secretary Jen Psaki sidestepped a question on Tuesday when asked about the president’s position on whether lawmakers should be able to trade stocks. She noted that President Biden did not trade stocks when he served in the Senate.
Psaki said Biden “believes that everyone should adhere to the highest standards.” But, she added, “It will allow members of the leadership in Congress and members of Congress to set the rules.”
Recently, the Federal Reserve added restrictions after controversy over the investments of two officials. Federal Reserve Chairman Jerome Powell was pressed last week about the emergence of conflicts by Senator John Osoff, a Democrat from Georgia, who introduced trading-ban legislation to lawmakers and their spouses last week. Powell noted that his agency’s new rule would “effectively terminate any active trading ability of any senior Federal Reserve official.”
“I totally agree that the public’s belief that we are working in their best interest is critical,” Powell said.