A small bipartisan group of House lawmakers is pressing to vote this month on legislation barring members of Congress from owning and trading stocks.
In a letter sent Thursday to leaders in both parties, the group, led by Reps. Raja Krishnamoorthi (D-Ill.) and Brian Fitzpatrick (R-Pa.), listed a number of legislative proposals that have already been introduced this Congress to do just that.
Rather than have those bills compete for predominance, the sponsors have combined forces in an effort to expedite the process, crunching the various proposals down to a series of seven baseline “principles” many of them share. The list includes the idea that the ban would cover not only all lawmakers, but also their spouses and dependents under the age of 18.
Whatever legislation the House considers, the lawmakers said, should feature those principles. And they’re pressing to stage the vote later this month when Congress returns to Washington after the long summer recess — the last window on the House calendar before the midterm elections.
“In the service of our constituents and to restore trust in our public institutions, we are working together to synthesize our respective legislation into a single, bipartisan legislative framework, and as part of that work, we have established a set of shared principles that have guided our own efforts to find consensus and develop a broader legislative framework,” the lawmakers wrote to Speaker Nancy Pelosi (D-Calif.), Minority Leader Kevin McCarthy (R-Calif.), and the bipartisan leaders of the House Administration Committee: Reps. Zoe Lofgren (D-Calif.) and Rodney Davis (R-Ill.).
Among the other stipulations outlined in the letter, the lawmakers want the legislation to ban the ownership and trade not only of stocks, but also of “securities, commodities, futures, derivatives, options, or other similar financial assets.”
They called for stiffer penalties “that are sufficient to ensure Member compliance.”
And they want the proposal to require lawmakers either to divest existing investments covered by the ban; shift their money into more neutral places like Treasury bonds or “widely held” mutual funds; or move those investments into “a Qualified Blind Trust.”
Blind trusts, they add, “must be truly blind.”
Joining Krishnamoorthi and Fitzpatrick on the letter are Democratic Reps. Angie Craig (Minn.), Jared Golden (Maine), Joe Neguse (Colo.), Alexandria Ocasio-Cortez (N.Y.), Katie Porter (Calif.) and Abigail Spanberger (Va.).
Once wildly unpopular on Capitol Hill, the stock ban has gained enormous momentum in the current Congress following revelations that scores of lawmakers have violated existing laws designed to eliminate conflicts of interest between legislators and the investments they make. Business Insider has been keeping a close tally, finding that the violations also extend to top staffers on Capitol Hill, often without any real penalty.
Supporters of the ban say that even if no laws are violated, the system can create the damaging perception that lawmakers are trading on information not available to the general public, or that they’re crafting legislation in order to boost their own portfolios.
Pelosi, for instance, has been forced this year to defend stock trades made by her wealthy husband, Paul Pelosi, saying she has no involvement in his financial transactions.
The Speaker and other Democratic leaders had initially resisted the stock ban, noting that there are already federal laws prohibiting insider trading. But the pressure from rank-and-file members has forced those leaders to reconsider, and Pelosi jumped on board earlier this year, directing Lofgren to draft a proposal based on “where the support is in our caucus.”
“I do come down always in favor of trusting our members,” Pelosi said in January, announcing her newfound support for the concept.
Pelosi stipulated that any stock ban covering Congress should extend also to the judicial branch, including the Supreme Court.
“It has to be government-wide,” Pelosi said at the time. “The Supreme Court has no disclosure, it has no reporting of stock transactions. And yet it makes important decisions every day.”
The lawmakers endorsing Thursday’s letter did not include the courts among their stipulations. But on the other principles, they appear to be digging in.
“I will reserve judgment until we have the full language,” Spanberger told reporters in the Capitol before the recess. “But a bill that does not include spouses is a bill that is not a serious effort to get at this issue.”
A spokesperson for the Administration Committee said Thursday that there is “no update to share” on the drafting or timing of the proposal under consideration.