A bipartisan group of more than two dozen lawmakers in the House is demanding that Speaker of the House Nancy Pelosi (D-Calif.) allow a vote on a bill that would bar members of Congress from trading on the stock market, which critics say is inappropriate due to Congress’ inside knowledge on financial and political affairs.
The demand was made in a Jan. 24 letter spearheaded by Rep. Jared Golden (D-Maine). A total of 27 lawmakers signed Golden’s petition, including 25 Democrats and two Republicans.
In the letter’s opening line, the coalition demands that Pelosi “swiftly bring legislation to prohibit members of Congress from owning or trading stocks.” Two bills that would do just that, the “Ban Conflicted Trading Act” and the “TRUST In Congress Act,” have been sitting in congressional limbo.
The responsibility to bring them out of this limbo lies largely with Speaker Pelosi, but she has thus far made no effort to bring either bill to the floor for a vote.
Golden argued that such a ban would be a “common sense measure” that is “supported by Americans across the political spectrum.”
A recent poll vindicates this latter claim.
The poll, conducted by the conservative group Convention for States Action in conjunction with Trafalgar, found that more than three-fourths of Americans believe that lawmakers have an “unfair advantage” over others in the stock market.
Speaking on the poll results, Mark Meckler, president of Convention of States Action, said, “Congress has a history of passing laws that make it appear as if they are behaving ethically, while continuing to do things that are not honest nor ethical. This issue has received a lot of attention, and this data verifies the American people want this practice to end once and for all.”
This issue has a storied history in Congress.
In 2012, Congress passed the STOCK Act, a bill that required members of Congress to publicly disclose their financial transactions. However, a recent investigation by Insider found that a laundry list of lawmakers in both the House and Senate had violated the provisions of that law.
In view of this, the lawmakers write, “It’s clear the current rules are not working.”
In another recent example of potential insider trading, several members of Congress allegedly sold off stock ahead of the crash precipitated by the CCP (Chinese Communist Party) virus. These members had received nonpublic briefings on the developing virus, leading many to believe that their sudden stock sales were carried out on the basis of this knowledge.
“The law prohibits only those stock trades that members of Congress make or direct because of their nonpublic knowledge,” Golden explains in his letter.
“But it can be nearly impossible to determine what counts as ‘nonpublic knowledge’ or how personally involved members are in their stock trades.”
“Instead,” the lawmakers demand, “Congress should close these loopholes by simply banning members from owning or trading individual stocks while in office.”
“We came to Congress to serve our country, not turn a quick buck,” the lawmakers continue.
“While there are many difficult questions facing Congress, this is an easy one,” the letter concludes. “Members of Congress should not be allowed to own or trade individual stocks. Let’s get this done.”
The letter is a rare show of bipartisanship, including a very unlikely alliance of America First conservatives and left-wing progressives.
The Democrat roster includes prominent progressives like Reps. Rashida Tlaib (D-Mich.) and Pramilla Jayapal (D-Wash.), who have both been outspoken in favor of sweeping institutional reforms and pricey social spending bills.
The two Republican signatories are Rep. Matt Gaetz (R-Fla.), a Trump-adjacent Floridian who has fought against government measures that give an unfair advantage to major corporations or the ultra-wealthy, and Rep, Brian Fitzpatrick (R-Pa.), a longtime moderate who joined Democrats in passing the $1.2 trillion infrastructure bill in late 2021.
Speaking on the letter, Gaetz quipped that “Rashida Tlaib and I don’t often agree. But when we do,” he added, “America should totally go that direction.”
However, not all lawmakers feel the same way about a stock market ban.
Most prominently, Speaker Pelosi made it recently clear that she thinks lawmakers should have access to the market.
During a mid-December press conference, just after Insider released its report on violations of the 2012 STOCK Act among members of Congress from both parties, Pelosi was asked whether a stock ban for members of Congress would be appropriate.
“No,” Pelosi responded quickly. “We have a responsibility to report [our trades] … [and] if people aren’t reporting, they should be.”
Further pressed to explain her “no,” Pelosi argued, “Because we’re a free market economy. [Members of Congress] should be able to participate in that.”
Pelosi has had her own scandals in regards to trading by her husband Paul Pelosi.
In 2008, Paul Pelosi bought $2 million of stock in Visa at the same time that Congress was considering a bill that would have seriously undercut the debit and credit card giant’s profits. Though the bill had gained momentum, it inexplicably stalled and died in the House.
Because Pelosi was speaker at the time many, including NBC’s 60 Minutes in a 2011 episode, speculated that there was a connection between Pelosi’s trade and the bill’s sudden collapse.
More recently, Paul Pelosi made a bullish bet in favor of Google parent company Alphabet, just as a bill designed to undercut tech monopolies was gaining significant momentum in the House. While others pulled out over fears about the antimonopoly bill, Pelosi’s unlikely bet paid off, netting the Pelosis a cool $5 million.
In fact, Pelosi’s portfolio has seen such spectacular returns that would-be investors on the Chinese-owned social media platform TikTok began to follow Pelosi’s releases and emulate his trades.
Rep. Dan Crenshaw (R-Texas) has also defended stock trading by sitting members of Congress.
According to a report by Unusual Whales, Crenshaw received the fifth-highest returns of any member of Congress for his stock trading in fiscal year 2021. During an appearance on the All American Savage Show podcast, Crenshaw discussed the returns and his position on congressmen trading on the stock market.
The host asked Crenshaw whether he thought that sitting members of Congress should be allowed to go into the stock market.
“I think it would be fine if you banned individual stock trading,” Crenshaw said, before clarifying, “Notice I said ‘individual stocks.’”
The Texas Republican explained that while he would accept bans on buying and selling individual stocks, he thinks that congressmen should still be allowed to invest in ETFs and similar stock collections.
“I’m kinda neutral on it,” Crenshaw continued. But if such a ban were put in place, Crenshaw claimed, “no one would run for Congress because you have no way to better yourself.”
Ultimately, the decision to bring a stock trading ban to the floor lies with Speaker Pelosi.
Still, the bipartisan support for Golden’s Monday letter indicates that members on both sides of the aisle remain committed to moving the agenda forward.
If brought to the floor, either of the two bills proposed to address the situation would represent the most substantial stock market reforms for a decade.
However, the coalition behind the reforms remains small, and more support in both the House and Senate, plus Pelosi’s acquiescence to bring either bill to the floor, will be needed for the reform to have a shot at making it to President Joe Biden’s desk.