Bipartisan Bill Will Block Some D.C. Stock Buys

Senators Kirsten Gillibrand, a Democrat from New York, and Josh Hawley, a Republican from Missouri, will introduce bipartisan legislation this week to block legislators and members of the federal executive branch from owning stock in individual companies.

The bill, if it is passed, would allow the president and vice president, Capitol Hill aides, lawmakers, and employees of the executive branch to own index and broad industry funds, as well as mutual funds, but would prohibit the same group of individuals from owning stocks in individual companies as well as blind trusts, according to a report by the Wall Street Journal.

The legislation is the most recent in Congress to be introduced after the publication’s Capital Assets series last year, which uncovered that several employees in the executive branch owned stock in companies regulated by their agencies.

“It is critical that the American people know that their elected leaders are putting the public first, not looking for ways to line their own pockets,” said Gillibrand in a statement.

Employees of the executive branch are already subject to strict rules that ban them from owning or trading stocks in companies they oversee. Still, the rules contain several omissions and loopholes, according to the Journal series.

Violators of proposed legislation would face strict penalties

Under the proposed legislation, government officials determined to be violating the rules could face strict penalties. The bill calls for executive branch employees to forfeit their profits from stock trading and face fines of $10,000 and more.

Currently, legislators and aides are allowed to trade and own individual stocks if they aren’t making investment decisions based on any nonpublic information they receive in Congress. However, with the new bill, they would face penalties of at least 10% of the investments’ value.

The bipartisan legislation comes as voters increasingly support banning stock ownership by the executive branch, lawmakers, and Supreme Court justices and their families.

According to a poll released Wednesday of 2,625 registered voters by the University of Maryland’s Program for Public Consultation, 80% said they support a ban on stock ownership.

“While the prospect of a stock-trading ban is controversial within
Congress, public support approaches unanimity,” said the program’s director, Steven Kull.

This year, around a dozen bills have already been introduced in Congress concerning a stock trading rule overhaul for Congress and the executive branch.

A vote was scheduled Wednesday by the Senate Homeland Security and Governmental Affairs Committee on a bipartisan bill from Senators Chuck Grassley, a Republican from Iowa, and Gary Peters, a Democrat from Michigan, which would create a searchable online database of corporate stocks, mutual funds, and other assets senior officials in the executive branch own.

The bill presented by Hawley and Gillibrand would create a searchable database for transactions by Congressional members, their staff and employees, and executive branch members.