Tuesday, April 18, 2023

By:  Bryan Metzger

Business Insider

  • A group of Democratic senators reintroduced a bill to ban members of Congress from trading stocks.
  • Lawmakers have long been pushing to enact a ban, but the effort stalled late last year.
  • The bill, dubbed the ETHICS Act, includes changes that came out of a working group formed last year.

Democratic lawmakers on Tuesday introduced a new bill that would ban members of Congress – as well as their immediate family members – from owning or trading stocks while serving in office.

“Members of Congress are held to serve the people, not their portfolios,” said Sen. Jeff Merkley of Oregon, the lead Senate sponsor of the bill, at a press conference with fellow Democrats outside the Capitol. “That’s why we need to end the corrupt trading in individual stocks.”

The ETHICS Act — short for “Ending Trading and Holdings in Congressional Stocks” — includes new provisions that emerged out of a working group of Democratic senators that was established over a year ago. Talks among those senators dragged on for months, and ultimately did not result in any legislation before the end of the previous Congress. 

But now, the bill has 21 Democratic cosponsors in the Senate, and a companion House bill will be introduced by Democratic Rep. Raja Krishnamoorthi of Illinois and Republican Rep. Michael Cloud of Texas.

“To now have, for the first time, a fifth of the Senate on a single bill is a real accomplishment,” said Merkley.

Specifically, the ETHICS Act would prohibit members of Congress, their spouses, and their dependent children from owning or trading stocks while in office by requiring them to sell off the stocks or place them into a blind trust.

It would also require lawmakers to file their financial disclosures electronically, allowing for the creation of a searchable online database, and imposes steeper penalties for violations of the Stop Trading on Congressional Knowledge (STOCK) Act.

The bill does not include new restrictions on the Supreme Court, and in contrast to previous bills from Merkley, does not include restrictions on stock trading or ownership by staff.

Furthermore, the bill also includes a new provision that would allow lawmakers and their families to hold onto — though not trade — their current stock holdings for the remainder of their term, allowing them to factor the ban into whether they choose to seek re-election.

That provision addresses concerns from some lawmakers that a potential stock trading ban would be disruptive to lawmakers’ family financial planning.

“It turns out that it’s fairly complicated when you do something involving family finances,” said Merkley.

But Republican Sen. Josh Hawley of Missouri, who’s introduced his own stock trading ban bill named after former House Speaker Nancy Pelosi, blasted that provision.

“This looks like Obamacare, where they write a law and every member of Congress is exempt from it,” said Hawley. “It’s like, ‘oh, it’s a stock trading ban,’ except we’ve exempted all of ourselves from it.”

Merkley said outside the Capitol that he welcomed efforts from Hawley and other lawmakers to address the issue, while claiming that Senate Minority Leader Mitch McConnell had discouraged his conference from pushing for a stock trading ban. Publicly, McConnell has remained noncommittal on stock trading legislation.

Among the Democrats who spoke on Tuesday was Sen. John Fetterman of Pennsylvania, who returned to the Senate on Monday following an extended absence as he sought treatment for clinical depression.

“Lawmakers should not be able to profit off of the same companies that they are regulating,” said Fetterman during a brief appearance. “It’s just that simple.”

The Pennsylvania senator became a proponent of banning congressional stock trading during his 2022 campaign for Senate, calling for a ban in the weeks after then-House Speaker Nancy Pelosi infamously declared that lawmakers “should be able to participate” in the free-market economy.

Insider’s “Conflicted Congress” investigation found last year that dozens of members of Congress had violated the STOCK Act, a federal law that requires members of Congress to disclose their stock trades in a timely manner. Furthermore, enforcement of the law is severely lacking.

Lawmakers also may have a number of conflicts of interest stemming from their stock holdings and committee seats.

In the House, lawmakers have also re-introduced other bills to ban congressional stock trading. House Democratic leadership in September abruptly aborted a scheduled vote on a hastily-drafted stock trading ban bill that was cast by some as a sham effort.