WASHINGTON, D.C. – Oregon’s Senator Jeff Merkley and Senator Sherrod Brown (D-OH) today introduced the Ban Conflicted Trading Act, legislation that will prohibit members of Congress and senior congressional staff from abusing their positions for personal financial gain.
“Conflicted trading, in which legislators and top staff trade in stocks while making decisions affecting their value, is a blatant abuse of power,” said Merkley. “Members of Congress and their staffs should be working for the American people, not abusing their public office to get rich.”
“Members of Congress serve the American people, not their stock portfolios,” said Brown. “Elected officials have access to nonpublic information that can affect individual companies and entire industries. There must be more accountability and transparency to prevent members from using this information and abusing their positions for personal gain.”
This week, U.S. House of Representatives Ethics Chairman Ted Deutch (D-FL) announced that he will lead the investigative subcommittee inquiry into Representative Chris Collins (R-NY), who faces criminal insider trading charges for buying over $3 million in shares in Innate Immunotherapeutics, and writing bill language to expedite the Federal Drug Administration’s (FDA) approval process for drugs produced by the Australian biotech company. Collins served on the board of Innate, gave insider trading tips to his family, and used campaign funds to pay legal fees related to insider trading investigations. Collins is scheduled to appear in federal court in February 2020.
Collins’ case is not an anomaly. In January 2017, it came to light that then-Health and Human Services (HHS) Secretary nominee Tom Price (R-GA), who previously sat on the Ways and Means Committee and Health Subcommittee while in Congress, had made dozens of stock trades in the health industry. While serving as a top health care policy maker, he advocated for the interests of a company he was invested in, Amgen, without disclosing the conflict of interest. And less than a week after purchasing shares in Zimmer Biomet, a medical devices company, Price introduced legislation to delay a Centers for Medicare and Medicaid regulation until 2018—a move that would protect the company’s finances. After introducing the act, Price’s reelection campaign received a donation from Zimmer Biomet’s PAC. In total, Price held stock in more than 40 companies that created conflicts of interest for his position as Secretary of HHS.
The Ban Conflicted Trading Act would bar members of Congress and senior congressional staff from buying or selling individual stocks and other investments, and from serving on any corporate boards, while in office.
New members would be allowed to sell individual holdings within six months of being elected, and sitting members of Congress would be allowed to sell individual holdings within six months after enactment of the bill. Alternatively, members of Congress could choose to hold existing investments while in office—with no option for trading until they leave office—or transfer them to a blind trust. Members of Congress would still be allowed to hold widely-held investments, such as diversified mutual funds and exchange-traded funds.
A copy of the Ban Conflicted Trading Act can be found here.