Momentum Builds for Limiting Lawmakers’ Investments

Republicans and Democrats have filed bills to regulate stock trading.

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When politicians and reporters raised questions about Congress members and staffers trading individual stocks in December, House Speaker Nancy Pelosi was cold to calls to buckle down. “We are a free-market economy,” she told a reporter. “They should be able to participate in that.”

A December Business Insider report had showed hundreds of congressional members and staffers violated the Stop Trading on Congressional Knowledge (STOCK) Act of 2012 with little-to-no penalties and hard-to-come-by information on violators.

The report followed Justice Department investigations of Sens. Diane Feinstein, James Inhofe, Kelly Loeffler, and Richard Burr for allegedly dumping stocks after receiving briefings about COVID-19 and before the market tanked during the early stages of the pandemic. The DOJ closed the investigations of Inhofe, Feinstein, and Loeffler. But as of October its investigation of Burr remained open, CNN reported. (The Securities and Exchange Commission didn’t respond to The Dispatch’s request for comment). 

About two years ago, a federal judge sentenced former Rep. Chris Collins to 26 months in prison for insider trading and lying to the FBI after giving his son a stock tip on a drug company. (Former President Donald Trump pardoned him in December 2020). 

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  1. Avatar photo
    Ben Connelly

    “ This bill also would require members of Congress, their spouses, and dependent children to place investments in a blind trust within a certain time of taking office. ”

    This is exactly how it should be. The idea that they shouldn’t own any investments at all is stupid, because they should be allowed to have retirement accounts and a savings account is little better than cash.

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    Ben Connelly

    “ This bill also would require members of Congress, their spouses, and dependent children to place investments in a blind trust within a certain time of taking office. ”

    This is exactly how it should be. The idea that they shouldn’t own any investments at all is stupid, because they should be allowed to have retirement accounts and a savings account is little better than cash.

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    Jason Gibson

    Very informative. In indifferent however except that it shows democrats benefiting off of that horrible capitalist fat cat system

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  4. Avatar photo
    Narwhal

    It appears McCarthy has more political sense than Pelosi on this issue. Either party could make this part of their 2022 platform at this point.

    The penalties need to be larger than they currently are and enforcement needs to be removed from any political process. In addition to this, Congressional staffers and members of Congress need a raise. It is absurd that a senator earns less than the head coach of the worst Div. I football team.

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    Paul Britton

    Are we really ready to throw away the idea that regular people — farmers, professionals, people in the trades, people that have done well in business, in short the sort of people who invest in stocks for retirement or simply for income — are wanted in Congress? Wasn’t it the idea of the Founding Fathers that regular people should serve as our senators and representatives?

    I think this will simply encourage even more people to become professional politicians, a species we surely don’t want to encourage.

    If our representatives and senators are too dumb to understand what insider trading is and why it’s wrong and illegal, let them take the consequences. They can be replaced.

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  6. Avatar photo
    Bill Nelson

    Stocks only cover a part of the situation. What if the senator is from Montana and owns a large farm, such as Sen. Jon Tester, ag policy will effect him directly. A number of people will own businesses which cannot be put into blind trusts or otherwise separated from the owner.
    Pelosi’s wealth comes from her husband who is big in areas which are heavily impacted by government actions.
    And if you constrain the elected officials, does this reduce the pool of potential candidates who would be beneficial for the nation? Frankly, a candidate who is not successful in business concerns me. Sen Sanders has never held a real job. Biden not much different.

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    1. Avatar photo
      Narwhal

      Recusal from certain votes maybe?

      You’d still probably want them on related committees because of their knowledge and experience. Trickier issue.

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      1. Avatar photo
        Bill Nelson

        If there is a farm issue, I, and most farmers want Tester to vote on it.

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          Narwhal

          Understandable. He has relevant knowledge and experience.

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    2. Avatar photo
      Paul Hoover

      I agree that business owners are a thornier issue, e.g., Jon Tester as you have noted, and others as well like Joe Manchin, but can't owners divest or otherwise transfer their ownership during their terms in office? I'm sure some smart lawyer(s) have already figured out how to do that. Otherwise it seems to me that ownership of investment instruments has a simple solution. When a person is elected or appointed to public office, he or she (and immediate family) should be required to place all such instruments in a blind trust until leaving that office. If affected persons don't like that requirement, then they can stay out of public office. Further, success in business doesn't necessarily mean ownership, so we could still get competent (non-owner) executives into office. And frankly, people who haven't ever held a real job shouldn't get elected in the first place.

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        Bill Nelson

        “… but can't owners divest or otherwise transfer their ownership during their terms in office?”
        With a family business? No, and certainly not a farm. Such rules will keep a lot of people out of office.
        And the assumption is that the office holder, newly elected, will commit criminal acts. I don’t like that assumption. I favor letting voters decide who they want to vote for. Remember that George Washington was one of the top business people of his time.

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          Paul Hoover

          Good points. But I didn’t mean to imply that newly elected persons will commit criminal acts (if that’s what you thought). I think that what I suggested (other than transferring or divesting ownership) would help to create an environment where it would be harder to see politicians as conflicted by their financial interests. All that said, I agree with you that we should be able to vote for whom we choose … even if my/your choice looks like a scoundrel to you/me.

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    Nick H

    Can we have a bill that prevents members of Congress from introducing bills with a clumsy title just so that it can be referred to by an acronym? (Especially if it's a recursive acronym like the TRUST in Congress Act?) I suppose it's better than naming bills after the principal sponsors, but there needs to be some limits on how stupid/cute the names get.

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    1. Avatar photo
      Phil Pennington

      Beat me to it. I was going to call for a "Ban Bill Names That Patronize the Adult Public Act", aka the "B(an) BS Act".

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      Chris L

      The federal government *loves* acronyms. They would find a way to abbreviate The Derek Zoolander Center for Kids Who Can't Read Good and Wanna Learn to Do Other Stuff Good Too into an education bill if they so desired.

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    Synchronize Your Dogmas (Bill B)

    Hard to wrap my mind around the Pelosi quote. And hiding behind the "free market" to boot? She's well past her sell-by date.

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      John D. Wright

      Her defending the free market is a dead giveaway that something is not right.

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      1. Avatar photo
        Synchronize Your Dogmas (Bill B)

        Or that she has a ton of Google stock.

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