- Congress often talks about reining in Wall Street. But now there is increasing pressure on Capitol Hill from lawmakers to curb their business.
- Sen. John Osoff, D-Ga., plans to introduce legislation by the end of the week that would require members of Congress to hold their assets in a blind trust.
- Osoff is not alone. There is some bipartisan support in Congress to limit members’ trading activity.
- “It’s about accountability, but it’s also about making sure that perception, and the ability of our constituents to trust us, is much easier because they don’t have to wonder about our motivations,” said Representative Abigail. Spanberger, D-VA said.
Congress often talks about reining in Wall Street. But now there is increasing pressure on Capitol Hill from lawmakers to curb their business.
Sen. John Osoff, D-Ga., who has emerged as a leading voice on the issue, plans to introduce legislation by the end of the week that would require members of Congress — along with their spouses and dependents — to – A blind faith to put your wealth in it. But he is not alone. There is some bipartisan support in Congress to limit members’ trading activity.
The push came after several lawmakers raised controversy over financial transactions as COVID-19 was widespread in the country, including censors Diane Feinstein, D-Calif., and Jim Inhoff, R-Okla. The Securities and Exchange Commission is investigating whether a stock sale by GOP Sen. Richard Burr of North Carolina just before the 2020 lockdown began was insider trading. The Justice Department dropped its investigation into Burr, Feinstein and Inhofe.
According to Capital Trades, which tracks disclosures of lawmakers, members of Congress and their immediate family bought and sold $515 million in stock and other assets over the past year. The top traders were Reps Josh Gottheimer, DNJ, Ro Khanna, D-California, and Clifford Franklin, R-Fla. Capital Trades’ analysis showed that the most active sectors were technology, energy and telecommunications and media.
Osoff’s bill will provide for penalties for MPs who do not comply with rules. A person familiar with the proposal said Osoff is seeking a GOP senator to co-sponsor the bill.
“I am an advocate for a ban on stock trading by members of Congress who make policy, who have access to information and economic forecasts,” Osoff said during a Senate hearing on Tuesday.
Osoff, who previously ran a documentary film studio, has estimated his net worth to be several million dollars. In March, he put his wealth into a blind trust, after then-senators from Georgia, Republicans David Perdue and Kelly Loeffler, delivered on a 2020 campaign promise amid allegations of profiteering from the pandemic. Osoff defeated Perdue in his election, while fellow Democrat Rafael Warnock defeated Loeffler, whose husband is chairman of the New York Stock Exchange. Perdue and Loeffler denied wrongdoing, and the DOJ dropped the investigation into Loeffler’s activity.
Democratic Representative Abigail Spanberger of Virginia said she was disappointed by the allegations of insider trading on Hill. She expressed her frustration with Rep. Chip Roy, R-Texas while on the house floor. They decided to start working together on a proposal that would require lawmakers, spouses and dependents to exercise a blind faith while in office.
Spanberger and Roy initially introduced the Trust in Congress Act in June 2020. It was reintroduced for this session of Congress, and has been co-sponsored by 14 other lawmakers – Republicans and Democrats.
Spanberger told CNBC in an interview on Tuesday, “It’s about accountability, but it’s also about making sure that perception, and the ability of our constituents to trust us, is much easier than they should be about our motivations.” I don’t need to be surprised.” “We’ve left that room for doubt.”
Other lawmakers have called for stricter rules that would still allow members of Congress to hold stock. The Ban Conflicted Trading Act, led by Sen. Jeff Merkle, D-Ore., would prohibit buying and selling while in office, but lawmakers can still choose to retain their assets. Members can also opt for disinvestment up to six months after their election.
Current law bars lawmakers from engaging in insider trading, but government watchdog groups argue the burden of proof is high. Spanberger said financial holdings can present a conflict of interest even if they are legal.
“There are many members of Congress who could be affected by this. I think it may cause some hesitation to support those members,” Spanberger said. “But it’s important, especially at this time, when we look at an American public that doesn’t have the strongest faith or belief in members of Congress.”
Members are also required to disclose transactions within 45 days, but the requirement is rarely enforced. The fine for a first offense is $200. A Business Insider investigation found that 52 lawmakers violated the rules last year.
The Campaign Legal Center, a nonpartisan government watchdog group, filed several complaints with the Congressional Office of Ethics. Only one – against Representative Tom Malinowski, DN.J., has been referred to the House Ethics Committee for further review. Malinowski has admitted that he missed the deadline to disclose his trades, but said they were executed by a third party without his knowledge. He has also established a blind trust for his investments since then.
“The law that prohibits Congressional stock trading is mission critical to our democracy,” said Delaney Marsko, Senior Legal Advisor, Campaign Legal Center. “Voters have a right to know that legislators are using valuable information received in office for the benefit of public interest.”
House Minority Leader Kevin McCarthy, R-Calif., has said he supports stricter rules. A source familiar with this thinking said he would push for sanctions if Republicans win a majority in November.
However, House Speaker Nancy Pelosi, D-Calif., has rejected the idea. to answer To a question from a reporter last month, he defended the transaction as part of a “free market economy.”