Democrats trying to ban individual stock ownership among members of Congress say they finally have enough support to push forward a bill following its hard-won backing by House Speaker Nancy Pelosi.
The Ban Conflicted Trading Act, Democrats said during a Thursday press call, will restore public trust in members of Congress at a time when over 70% of voters support a resolution to curb stock trading for lawmakers and top staff who might put their own interests above the public’s.
The legislation gained traction this week after Pelosi, D-Calif., on Wednesday announced her support for the measure following months of resistance.
“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, D-N.Y., said Thursday on the virtual 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 in January still seemed resistant to the ban, though she had relaxed the hard-line approach she took a month earlier.
“We’re a free-market economy,” Pelosi told reporters in December.
But Senate Majority Leader Chuck Schumer, D-N.Y., has backed the idea of banning members of Congress from trading individual stocks.
“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.
Fourteen members of Congress introduced the act in the House, including Reps. Matt Gaetz, R-Fla., and Michael Cloud, R-Texas.
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 over 11 years, said one of the legislation’s champions, Sen. Jeff Merkley, D-Ore. The lawmaker recently introduced a similar bill in the Senate along with Sen. Elizabeth Warren, D-Mass.
“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, R-N.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 heightened 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.
Democrats say they’re hoping to get the bill to the floor for a vote in the coming months, with room for debate and amendments, including a clause that would also bar the spouses of members of Congress from individual trading.