Democrats trying to ban members of Congress from owning or trading individual stocks say they now have a path forward after House Speaker Nancy Pelosi this week said she would be open to the idea after months of resistance.
During a call with reporters Thursday, they said the effort would restore public trust in Congress at a time when over 70% of voters support curbing the practice for lawmakers and top staff who might put their own interests above the public’s.
“When we get caught up and even have the ability to individually trade stock, it erodes public trust in government. And right now, whether it is media, government, or any sort of institution, we are having a crisis of public faith in many institutions that are very critical to the well-being of society,” Rep. Alexandria Ocasio-Cortez, DN.Y., said Thursday on the call, joined also by Sens. Jeff Merkley, D-Ore., Sherrod Brown, D- Ohio, and Reps. Raja Krishnamoorthi, D-Ill., and Joe Neguse, D-Colo.
“When we have access to classified information, we should not be trading on that information, whether it’s consciously or unconsciously, we shouldn’t appear to even really advance the appearance of that,” Ocasio-Cortez said.
Pelosi has been under pressure to drop her opposition from members of both parties inside Congress and from outside critics of her husband’s stock trades.
There are several different proposals — both in the House and Senate — and while Pelosi on Wednesday didn’t endorse any specific proposal, she did indicate she could now go along with the general concept — with qualifications.
“It has to be government-wide,” she said, adding that she thought the judicial branch should be included. “The Supreme Court has no disclosure. It has no reporting of stock transactions, and it makes important decisions every day.”
Even with that, it’s a change from the hard-line she voiced two months ago.
“We’re a free-market economy,” Pelosi told reporters in December.
“I think that the speaker’s openness on this position is really a testament to the fact that public attention and pressure can move public policy from the bottom all the way to the top, and I applaud the speaker’s openness and her willingness to listen to the caucus on this issue,” Ocasio-Cortez said.
Some sort of restriction appears to have support among leaders of both parties but leaders in both chambers have not shown support for any particular measure.
In the same week Pelosi expressed new openness, Senate Majority Leader Chuck Schumer, DN.Y., said he, too, backed the general idea of banning members of Congress from trading individual stocks.
One proposal is The Ban Conflicted Trading Act, which would explicitly bar members of Congress and their top staff members from trading stocks.
Fourteen members of Congress introduced the act in the House, including Reps. Matt Gaetz, R-Fla., and Michael Cloud, R-Texas.
A bipartisan effort to ban congressional stock trading is the Trust in Congress Act, proposed by Reps. Chip Roy, R-Texas, and Abigail Spanberger, D-Va., which would stop both individual lawmakers and their immediate family from owning stocks.
But not all members of Congress support the ban.
Rep. Elaine Luria, D-Va., pushed back in an interview with Punchbowl News that was published on Wednesday.
“Why would you assume that members of Congress are going to be inherently bad or corrupt?” she asked.
Senate Minority Leader Mitch McConnell said on Tuesday he hadn’t given the matter “serious thought” because his assets are in mutual funds, not stocks.
“That’s what I advise members to do because I think it prevents such suggestions that you are engaged in insider trading,” he said.
Efforts to ban stock trading among members of Congress have been going on for more than 11 years, said Merkley, one of the Democrats leading the effort.
“This is the moment we need to get it. We don’t need to just discuss it,” he said Thursday, adding, “And we’re building the momentum to make that happen.”
Congress enacted the Stop Trading on Congressional Knowledge Act in 2012, requiring members to disclose their stock ownerships and rates. They often find loopholes to that law, however, triggering a number of public trading scandals, said Krishnamoorthi, who called the legislation “wholly inadequate” in addressing problems of insider trading.
“Fifty-four members of Congress violated the Stock Act in terms of not disclosing their trades, but for the hundreds who actually abided by the Stock Act and disclosed their trades, they created the appearance of insider trading,” Krishnamoorthi said, referring to an Analysis by Business Insider published earlier this year.
In 2017, after it was revealed that former Rep. Tom Price, R-Ga., famously traded more than $300,000 of shares in medical companies while deeply involved in health care policy, pressure to tighten trading procedures increased.
Sen. Richard Burr, RN.C., in 2020 stepped down as chair of the high-profile Senate Intelligence Committee while the Justice Department investigated stock trades he made at the dawn of the pandemic, including tens of thousands of dollars in trades made in the hospitality industry.
Serious questions of conflicts of interest also arose during the COVID-19 pandemic when members of Congress came under scrutiny for purchasing stock in vaccine companies.
“Basically, people assume that when these members say, come out of a COVID hearing and start to buy Pfizer stock, that somehow they knew something about COVID when they bought the Pfizer stock that the rest of the country does not know,” Krishnamoorthi said .
Sen. Jon Ossoff, D-Ga., said on thursday that stock trading during the pandemic highlighted the issue on the national stage.
“The high-profile scandals of stock trading during the COVID-19 pandemic, around confidential briefings that members were receiving, brought this issue to public consciousness,” Ossoff said.
Ossoff, along with Sen. Mark Kelly, D-Ariz., put forth their own proposal to ban members and their immediate families from holding individual stocks — the Ban Congressional Stock Trading Act.
Editor’s note: This story has been updated to reflect that House Speaker Nancy Pelosi has not endorsed any specific legislation.
George is Digismak’s reported cum editor with 13 years of experience in Journalism