Stock trading ban in Congress gains traction
WASHINGTON » More than a year since Rep. Abigail Spanberger, D-Va., first put forth legislation that would ban members of Congress from trading stock, a flurry of action in the Senate in recent days has injected some momentum into the proposal.
While it’s traditionally tough to get Congress to police itself, Spanberger and her co-lead on the legislation, Rep. Chip Roy, RTex. — an odd couple, no doubt — have built a bipartisan coalition around the issue spanning the ideological spectrum after several stock-trading controversies during the pandemic raised eyebrows.
Now, Sen. Jon Ossoff, D-Ga., has introduced a similar bill with Sen. Mark Kelly, D-Ariz., to prevent lawmakers from buying and selling stocks while they are in office, giving Spanberger and Roy a Senate champion to move the needle on the legislation.
The bills would require members of Congress, their spouses and dependent children to place their stocks in a blind trust while the member is in office — intended to prevent insider trading, or the appearance of it, given that lawmakers can have access to privileged information.
Sen. Josh Hawley, R-Mo., introduced a competing proposal last week, excluding dependents and with different enforcement mechanisms — more evidence to Spanberger of the bipartisan energy surrounding the idea, even if some differences may need to be ironed out.
“If placing limitations on how we can buy and sell stock makes it so that someone trusts us a bit more — Congress doesn’t have a great approval rating — I think that is a quote-unquote sacrifice we should make to positively affirm we are deserving of that trust, or to positively affirm we are working for the American people and not our pocketbooks,” Spanberger said.
The issue has gained traction in recent weeks on the heels of an investigation by Business Insider finding that dozens of members of Congress violated the Stock Act’s reporting requirements, which requires members of Congress to disclose stock trades within 45 days of the transaction.
When asked by Business Insider shortly thereafter about whether members and their spouses should be banned from trading stock, House Speaker Nancy Pelosi, D-Calif., appeared to reject the idea — which Roy and Spanberger said incidentally galvanized interest in the issue.
“The news of the speaker’s comments blew the lid off the issue,” Roy said.
Pelosi — whose spouse has been highly active in the stock market, Business Insider has reported, citing her financial disclosures — noted that “we’re a free-market economy, and [lawmakers] should be able to participate in that.”
“Even if she disagrees or thinks it’s unnecessary, I think there was a dismissiveness of the question that I think caught a lot of attention and certainly has propelled this issue a bit more,” Spanberger said.
In a statement Friday, a spokesman for Pelosi said that the speaker “believes that sunlight is the best disinfectant and has asked Committee on House Administration Chair Zoe Lofgren [of California] to examine the issue of Members’ unacceptable noncompliance with the reporting requirements in the Stock Act, including the possibility of stiffening penalties.”
“To be clear, insider trading is already a serious federal criminal and civil violation and the Speaker strongly supports robust enforcement of the relevant statutes by the Department of Justice and the Securities and Exchange Commission,” said the spokesman, Drew Hammill.