WASHINGTON, D.C. – Congressional members are slated to vote on a bill that would restrict members of Congress on trading stocks but ethics groups argue the bill has too many exceptions. There’s no single law that prohibits members of Congress from trading stock but it’s become a hot topic on Capitol Hill following increased scrutiny for members on both sides of the aisle.
There are several proposals surrounding the issue. The House this week takes under consideration the “Stop Insider Trading Act”. It’s a GOP-backed bill with some Democrats co-sponsoring it. In the bill summary, it generally prohibits members of Congress and their spouses and dependent children from purchasing stocks and requires public notice before they can sell stocks. However it also says specifically, it would prohibit these people from purchasing covered investments, which is a security issued by a publicly traded company or a comparable economic interest.
“This section ensures lawmakers will not be able to profit off insider information they may garner while serving in Congress,” said Rep. Bryan Steil (R- WI), Chairman of the Committee on House Administration. “The legislation I believe is critical to restoring trust in this institution. Nearly 15 years ago Congress passed the Stock Act which required lawmakers to publicly disclose stock trades. However, disclosure rules like detail and can be filed a month after a transaction. This coupled with increased attention to members’ trade and social media accounts has fueled public frustration. I believe it’s time for members to stop from buying new stock.”
But some Democrats and organizations like the Campaign Legal Center, a nonpartisan legal organization, said the bill does not go far enough to address the issues surrounding stock trading. The CLC said “this bill would not actually ban lawmakers from trading stocks or stop members from unduly profiting from their official positions.” They add the bill contains exceptions that “regrettably swallow the few new rules it does try to enact” and add “as a whole, it fails to solve the core ethical problems that have eroded confidence in congress for years.”
“This bill would still allow members of Congress to continue to own and trade individual stocks,” said Rep. Joe Morelle (D- NY), Ranking Member on the Committee on House Administration. “The bill would let members of Congress keep every single share of stock they currently own. The bill would allow members to liquidate their holdings at any time, profiting years of ballooning investment portfolios. There is no divestiture under this bill.”
He also airs his frustration the bill does not extend to the executive branch. “I welcome any chance to stop insider trading in Washington including at the White House but again that is not what this bill does,” said Rep. Morelle.
To make things more complicated on this, House Republicans grouped this stock trading bill and a voter id bill in a combined legislative package for the floor vote. That additional language includes the President’s push to require voters to produce photo ID at the polls.
