More lawmakers are rallying behind legislation to ban stock trading by members of Congress.
Twenty-seven lawmakers recently wrote a letter urging House leaders to act quickly to bring “commonsense, bipartisan” legislation to the floor banning members of Congress from owning or trading stocks.
And while Rep. Jake Auchincloss (D-MA) was not one of the signees, he still signaled support for passing such legislation, which he said “should” happen sometime this year.
“I think that the public’s perception that members of Congress or other federal officials might have insider knowledge, that might be able to gain on that insider knowledge, is an unacceptable diminution of the trust that they could have in this institution,” Auchincloss said on Yahoo Finance Live (video above). “And right now, trust is the most important currency in our political sphere.”
The STOCK Act, which was passed in 2012, was intended to provide transparency in stock trades by lawmakers, who were required to report these trades within 45 days of the transactions.
However, a September 2021 report by Insider found that 54 members of Congress have failed to properly report their transactions.
“I’ve been clear from the beginning that to supplement the already rigorous disclosure requirements that members of Congress have for their individual holdings,” Auchincloss added, “we should also have a ban on members of Congress owning or trading individual public equities.”
‘We’re voting on this stuff every single day’
The coronavirus pandemic and its economic impact only magnified this issue in Congress.
Following the COVID-induced stock market crash in March 2020, an investigation by ProPublica and The Center for Responsive Politics revealed that Sen. Richard Burr (R-NC), who was chairman of the Senate Intelligence Committee at the time and received confidential briefings about the emerging threat of the coronavirus pandemic, and his wife sold numerous stock shares following those briefings. (Burr denied the allegations, though the Securities and Exchanges Commission (SEC) is reportedly still investigating.)
Three other senators — Dianne Feinstein (D-CA), Jim Inhofe (R-OK), and Kelly Loeffler (R-GA) — were also scrutinized for stock transactions ahead of the market crash.
“I certainly agree that people who hold tremendous public trust, whether they’re Supreme Court justices or senior administration officials or members of Congress, should be held to a higher standard,” Auchincloss said. “And part of that comes with sacrificing your ability to own public equities. I think that’s fully appropriate.”
One of the bills being considered — by Sen. Jon Ossoff (D-GA) and Sen. Mark Kelly (D-AZ) — would prohibit members of Congress and their immediate family members from conducting any stock transactions while serving in office and confiscate the lawmaker’s entire salary if they break the rules. U.S. Representatives Abigail Spanberger (D-VA) and Chip Roy (R-TX) unveiled a similar proposal to be passed in the House.
“We’re voting on this stuff every single day,” Roy told NBC News. “And yet people are buying and selling stocks or buying and selling Pfizer while we’re in the middle of the pandemic, like, how is that OK?”
Another proposal from Sen. Josh Hawley (R-MO) would bar members of Congress and their spouses from holding or trading individual stocks. If they are found to violate the law, they would be required to “return their profits to the American people.”
Initially, House Speaker Nancy Pelosi (D-CA) was among politicians who objected to such a ban but was met with fierce scrutiny and finally altered her stance this month.
“It is a confidence issue,” she said during a press conference. “And if that’s what the members want to do, then that’s what we will do,”
According to Auchincloss, at the end of the day, it all “comes back to trust.”
“Unfortunately, the public’s trust in our critical democratic institutions is really at an all-time, or at least, a post-war low,” he said. “And that makes it so much harder for us to pass policy. That makes it harder for us to address issues in public health or climate change. It makes it harder for us to lead on the world stage. Anything that we can do that will increase the public’s trust in the federal government I think is an important step forward for us as a country, and a bipartisan one, I would add.”
Read the latest financial and business news from Yahoo Finance