Jerri-Lynn here: I’m inherently suspicious of legislative proposals being heavily touted by the core of the current Democratic leadership, particularly Chuck Schumer – even though pushback from Nancy Pelosi’s almost certainly a welcome sign. Nonetheless, there’s no doubt that current rules are too lax. As with so much financial regulation, the devil’s in the details. And as happened in the Dodd-Frank fiasco, I fear any reform current Congresscritters can agree will be overly complex and riddled with loopholes, so when all’s said and done, one wonders, what was the point?
Yet recall, we once knew how to enact toothsome reforms. Look at New Deal legislation, particularly the securities regulatory framework. So, I’ll just say here, the situation deserves careful scrutiny.
By Jake Johnson. Originally published at Common Dreams
The momentum behind a widely popular effort to ban stock trading by members of Congress is growing, with Senate Majority Leader Chuck Schumer reportedly instructing fellow Democrats to unite behind a specific legislative proposal.
“After weeks of silence, Senate Democratic leaders have asked lawmakers to propose improvements on rules governing congressional stock trading,” Insider reports. “In a call Friday, Democratic leadership staff told legislative directors for Democratic senators about their aspirations for bringing a congressional stock-trading ban bill to the floor of the U.S. Senate.”
The development comes weeks after Sen. Jon Ossoff (D-Ga.) ignored pushback from prominent Democratic leaders—including House Speaker Nancy Pelosi (D-Calif.)—and unveiled legislation that would bar members of Congress, their spouses, and their children from buying and selling stock while in office.
“It’s working. Keep pushing,” Ossoff tweeted Sunday, highlighting the Senate Democratic leadership’s openness to the proposed ban.
Thus far, just eight Senate Democrats have officially signed on as co-sponsors of Ossoff’s bill (S.3494), which he introduced alongside Sen. Mark Kelly (D-Ariz.) last month.
“It’s time for Congress to act and ban members from trading stocks while they’re in office,” Sean Eldridge, founder and president of Stand Up America, said Sunday.
Despite broad support from the public and growing backing from rank-and-file lawmakers, some Democratic leaders remain opposed to a prohibition on stock trading. House Majority Leader Steny Hoyer (D-Md.) said last week that he’s “not sure that it’s necessary” to enact such a ban given existing rules against insider trading—rules that critics say are far too lax and seldom enforced.
Schumer, for his part, said last month that he doesn’t “own any stocks” and that banning individual trading by sitting lawmakers would be “the right thing to do.”
It’s unclear where Sen. Joe Manchin (D-W.Va.), a key swing vote who owns a stake in his son’s West Virginia coal business, stands on the proposal.
“I don’t own any stocks, and I think that’s the right thing to do.”
Majority Leader Chuck Schumer comments on the recent push to bar members of Congress from trading individual stocks. pic.twitter.com/pZ3V7EE4pm
— Forbes (@Forbes) January 11, 2022
A recent analysis of financial documents by Capitol Trades and reporting from MarketWatch found that congressional lawmakers or members of their families traded an estimated $355 million worth of stock in 2021, a year in which the coronavirus pandemic killed hundreds of thousands of people across the U.S. and pushed many into financial ruin.
While insider trading has long been commonplace on Capitol Hill, suspiciously timed transactions during the pandemic—particularly soon after Covid-19 was detected in the U.S.—brought fresh attention to lawmakers’ use of secret information to buy and sell stock.
Former Sen. David Perdue (R-Ga.), Ossoff’s Republican opponent in the 2021 U.S. Senate runoff in Georgia, was a prolific stock trader, and he was accused of using insider information to buy shares of companies that stood to benefit from the pandemic.
“Recent revelations about stock trades at the outset of the Covid-19 pandemic and economic downturn, increasingly prevalent violations of the STOCK Act’s reporting requirements, and investigations and even convictions of members of Congress pertaining to insider trading have all served to galvanize public interest and media scrutiny around real and perceived corruption in Congress,” a coalition of 14 advocacy groups wrote in a letter endorsing Ossoff’s legislation last month.
“The public needs to know that Congress recognizes the issue of insider trading as a problem that undermines its own legitimacy and erodes the trust of voters,” the coalition added. “The good news is that Congress is able to respond to this concern in a meaningful way by advancing S. 3494 and sending it to President Biden’s desk for his signature.”
Yeah sure, right, they are going to take away one of their most lucrative money streams. All of this is just a show. They will have a loop hole. And they will continue in other various ways to leave public service with more than they had before.
Agreed, and besides, why would we believe ANYTHING these people say.
What needs traded is them. 535 out, and a different 535 in. Someone find me a phone book and a dart.
Phone book? Dating ourselves aren’t we? If you found one, half of the folks listed in it have probably passed on by now. And they would STILL probably be more honest legislators from the afterlife than these crooks in DC right now
I agree completely with your sentiment.
If the stiffs can vote, they can legislate
I agree that it is posturing, but seeing as how it is a fairly obscure issue, this raises the question of who is it directed at?
I do not think that it is directed at the general public. I actually think that it is directed at the relentlessly corrupt (without breaking the law) Nancy Pelosi.
It’s a brush-back pitch thrown at her head should she decide to run for Speaker again.
There was a report I read a while back about congressional stock trades. It had list of the people and how much they traded. Pelosi was near the top, but there were many others on the list and quite partisan as well.
I don’t know about this knocking Shark Nancy to the dirt beside home plate to send a message, as I don’t think messages or rules matter one iota to her. But you never know I suppose, especially with these scum.
This should be simple IMO. None of these people, or their families (any), or any broker or business make trades in their behalf – ever – under any circumstances (Like Wall St. Chuck saying he doesn’t buy individual stocks so he doesn’t care – while loading up on mutual funds or options via a Goldman broker).
In other words, write the rules so no congressional person, staff, family, etc., can make one slim dime via the Grand Casino. Period, end of story.
If they don’t like those rules, don’t run, and if you do, you will sign a form that says if you do, and get caught, you go straight to the Graybar Hotel, and you don’t even get to pass Go.
I have to wonder if they don’t mind entertaining the idea at that this time – now the the stock market appears to be on a more downward trajectory. The congress critters have dumped their bags at the highs.
Since this is the Unites States of Amnesia, it could all be reversed at the time of the next inexplicable pump up.
The STOCK Act was modified and some aspects repealed in April 2013, I believe around the same timeframe as the Boston Marathon bombing, which meant there was little discussion in the media (with exception to Jon Stewart).
I’m in favor of the Congressional ban on stock trading. However, for the members of Congress who understand how to navigate financial secrecy jurisdictions (or pay lawyers & accounting firms to do so on their behalf), would this be a non issue? If that’s the case, then I assume this is a law that just adds a cost of doing business without addressing the underlying problem. I generally think that until there are laws that 1. address financial secrecy and tax havens, and 2. address lobbying, junkets, campaign contributions, and Super PACs, we’ll continue trying to extinguish a forest fire of corruption with a garden hose. Thus, I end up in the same place again, thinking nothing significant will happen until people take to the streets, protest, strike, and engage in other civil disobedience that causes political decision makers (i.e., politicians and their paymasters) to feel the need to act.
I like that you mention the Super PACs. When I read the article, my first though was that this was another distraction to keep a discussion of campaign finance out of the limelight.
In any case, unless you change the broader environment as you advocate, nothing much will change.
In a system of legalized bribery, we have to make rules for what have been common functions of government, however, Imho, it’s the proverbial day late. We’ve been operating with the “it may be immoral, but it’s not illegal” for so long now, the corruption and huge conflicts of interest are deeply embedded. I wish I were more optimistic.
I’d be willing for the doors to be bolted closed as they can, one at a time, if necessary. There’s no reason why public servants’ investment portfolios shouldn’t be maintained or managed by blind trusts, or independent investment advisers during their term in office.
I work in the financial industry, and my ability to trade for my own account is significantly limited (and I don’t even have access to information that would allow me to trade ahead, or inside trade). I’m supposed to be using information for the company’s benefit, not mine. They pay me well to do so. Elected officials are supposed to be working for their constituents, not themselves. They are also well paid to do so.
This is an important point, albeit surely one appreciated widely by this audience: if you work for a bank or financial services firm, your investment activities are heavily scrutinized, and you simply can’t buy certain stocks or securities. But these private sector rules apparently don’t apply to Congress. Nancy Pelosi and her family is Exhibit One (this pic in unusualwhales.com). The entire game has gone on for so long, MoC apparently feel entitled to such activities.
Somedays I feel the only real fix for Congress is to say ‘Sorry, game’s over, the public has endured your corruption long enough’. Kick them all out on the street, make all of Capitol Hill a museum, start over. The rest of the federal bureaucracy can continue to function on autopilot. In a year, hold publicly-funded elections, and bar all former office holders and their relatives from running. First task, write a new Constitution: of, by, and for the people.
Is there a precedent for imposing such a restriction on adult children of officials?