Democrats in the U.S. House of Representatives recently released a framework for legislation that would restrict senior government officials and lawmakers, including members of the Supreme Court, from trading in stocks.
The bill would also restrict lawmakers’ dependent children and spouses from holding specific other investments and trading stock and require public officials to place holdings in a blind trust and divest from such holdings according to the bill’s framework.
The bill’s framework will toughen requirements for disclosure and bulk up penalties for officials failing to complete requirements in time. The new legislation comes after media scrutiny of conflicts of interest between government officials and their families.
“These stories undermine the American people’s faith and trust in the integrity of public officials and our federal government. Members of the public may ask, are our public officials acting in the public interest or their private financial interest?” asked the chairman of the House Administration Committee, Zoe Lofgren, in the text accompanying the framework. Lofgren also stated that the legislative text would be released “soon.”
The House may consider the legislation in the next couple of weeks according to the schedule announced by the House Majority Leader. It is unclear what the bill’s chance of passage in the Senate is. The White House said the president would leave it to Congress to decide on rules for members trading stocks.
Speaker of the House Nancy Pelosi said Democrats would bring legislation to the floor of the House that would place new restrictions on lawmakers’ ability to purchase and sell stocks. Pelosi’s announcement comes months after negotiations over how or if to stop personal financial activity by Congressional members, possibly creating perceived or actual conflicts of interest.
Pelosi’s announcement came only a day after The New York Times published an extensive analysis showing that 97 senators, representatives, or their immediate family members had reported trades of bonds, stocks, or other financial assets that could have influenced the committees they were serving on between 2019 and 2021.
The House Speaker declined to provide details of the proposal other than calling it “very strong.” “We believe we have a product that we can bring to the floor this month,” said Pelosi at her weekly news conference.
Action on legislation is slow-moving
“For months, House and Senate leadership have promised action,” said the lead sponsor of one of the bipartisan proposals designed to reign in lawmaker trading, Democrat Representative Abigail Spanberger of Virginia. “It’s long past time to move forward.”
The new legislation would mandate more detailed disclosures of transactions for the allowed investments to strengthen penalties on those who may try to skirt or break the law.
In a poll earlier this year, nearly two-thirds of respondents supported a complete ban on Congressional members trading individual stocks. With the public trust of members of Congress dropping to a low of 7 percent in June, many lawmakers cannot ignore the demands of their constituents.
According to Noah Bookbinder, president of the nonprofit group Citizens for Responsibility and Ethics in Washington, “Congress is mired in a crisis of institutional legitimacy, brought about in part by reports of members of both parties appearing to profit off their positions of public trust.” Bookbinder wrote the remark in a letter calling for limits on trading by members of Congress.
Oregon Democrat Senator Jeff Merkley has been working on one of the proposals and said, “I’m determined to get the ban on congressional stock trading across the finish line. I’ve been carrying this fight for a decade, and I will not let it die.”