By Victor Reklaitis
Critics of a ban say it would discourage people from running for office, or it would be difficult to implement, especially with blind trusts being considered. Another argument is that U.S. lawmakers should understand what it’s like to invest in stocks given that they decide policy about the equity market.
Rep. Spanberger’s take, President Biden’s role
One House lawmaker who has co-sponsored one of the bills that would end congressional trading in individual stocks sounded somewhat discouraged in an interview this week, even as she seemed excited by Schumer’s comment about a Senate vote in 2022.
“Hopefully we’ll see them lead by example — faster than we might see action in the House, which is sad to me since we’re supposed to be the people’s House,” said Democratic Rep. Abigail Spanberger of Virginia, referring to the Senate.
“But if that’s the reality, then I look forward to them doing the right thing, and then ideally, hopefully, the House will follow suit.”
The Senate is dealing with “too many competing ideas,” but the problem in the House “is not coalescing around legislation,” she said. “The issue is House leadership doesn’t want to move this. That’s the problem in the House.”
House Speaker Nancy Pelosi, the California Democrat, defended stock trading by lawmakers and their spouses in December, but then in January reversed herself to some extent, asking the House Administration Committee to look into a possible ban on congressional trading and saying: “I just don’t buy into that. But if members want to do that, I’m OK with that.”
Pelosi ranked as the eighth-biggest trader last year among Congress’s more than 500 members, with $12 million in buys and no sells. That’s according to MarketWatch’s January report , which used a Capitol Trades analysis of disclosures filed by members of Congress for their trading activity or for their family members’ buys and sells.
When asked what she’s doing to win over Pelosi, Spanberger said: “Getting more co-sponsors.” Her bill, introduced with Republican Rep. Chip Roy of Texas, has attracted more than 60 co-sponsors — “quite a lot of co-sponsors for a bill that’s not imminently coming for a vote,” she said.
The Virginia Democrat decried seeing fellow lawmakers buy shares in pharmaceutical or cleaning-supply companies during the onset of the COVID pandemic, as well as buying stock in a defense company that’s “going to be producing massive amounts of specific weaponry for a war in Ukraine that we knew was coming.”
“The fact that there are members of Congress who think they’re ‘right’ to be able to buy stocks, which equates to profiting off that information, is to me just unconscionable,” Spanberger said.
“I’m continuing to build up a coalition of people who believe that this reform is necessary. But I can’t change everybody’s minds. And sadly there’s numbers behind why some people might not be inclined to support it.”
An additional hurdle could be the 50-50 Senate’s filibuster rule, in which 60 votes are required to end debate on most items, so the minority party is able to stymie the majority’s efforts. But some Republican senators have backed bills focused on congressional trading, including Tennessee’s Marsha Blackburn, Montana’s Steve Daines, South Carolina’s Lindsey Graham and Missouri’s Josh Hawley .
Another watchdog group that’s pushing for a ban is planning to get President Joe Biden involved, hoping that could spark action.
“We will send a letter requesting that he push this through and basically follow his campaign promise to push for laws where Congress is not influenced by their personal financial holdings,” said Kedric Payne, senior director of ethics and general counsel at the Campaign Legal Center (CLC). That refers to a Biden campaign pledge to work with Congress to enact laws that would stop lawmakers from being influenced by those holdings.
That letter, with signatures from a range of groups, is likely to go out this week or next week, according to Payne.
The CLC expert ties passage of 2012’s STOCK Act to a strong nudge from then-President Barack Obama during a State of the Union address. That law requires disclosures of stock trades by lawmakers, and it aims to help prevent politicians from insider trading, but it’s viewed as insufficient by some watchdog groups.
“It was recognized” a decade ago that the president could deliver “a push from outside of the legislature, and that’s what needs to happen now,” Payne said.
“This problem of perceived conflicts of interest with stock trading is not going away, and it will get worse unless Congress acts right away,” he added.
This is an updated version of a report that was first published on May 19, 2022.