EXCLUSIVE — Senate Democrats are set to unveil a sweeping proposal to ban members of Congress from trading in the stock market, according to a source involved with the effort and draft legislation obtained by the Washington Examiner.
The bill, dubbed the Ending Trading and Holdings in Congressional Stocks Act, would immediately prohibit lawmakers from buying or selling stocks. It would also require them and their spouses and dependents to divest from certain assets or place holdings into a “qualified blind trust,” a proposal that wouldn’t apply to lawmakers who were only recently elected this Congress until their next reelection.
The ETHICS Act’s introduction will come on the heels of a bipartisan swath of House members, including Reps. Pramila Jayapal (D-WA), Matt Rosendale (R-MT), and Ken Buck (R-CO), putting forth legislation in March that would similarly prohibit lawmakers and their spouses from trading or owning stocks.
A source familiar with the situation told the Washington Examiner that the ETHICS Act will be unveiled outside the Capitol on Tuesday morning by its leads — Sens. Jeff Merkley (D-OR), Sherrod Brown (D-OH), and John Fetterman (D-PA).
“This is the strongest and most well-thought-out stock trading ban bill that anyone has introduced yet,” the source, who is not authorized to speak publicly, said. “It’s long past overdue for Congress to end this corrupt practice, and the ETHICS Act is the best way to do it. Maybe then Congress could slowly begin regaining all of the trust and faith it has lost with the public over the years.”
Congress has increasingly weighed various proposals that aim to tackle potential conflicts of interest in connection to lawmakers trading stocks, including a measure reintroduced by Sen. Josh Hawley (R-MO) in January that would impose a ban and also make lawmakers and their spouses in violation of it “forfeit any investment profits to the American people via the U.S. Treasury,” according to a press release. In March, Hawley notably put forth a bill that would ban members of the executive branch from owning or trading stocks.
Under the ETHICS Act, lawmakers would be subject to civil penalties if they do not comply that are equal to one month’s pay or “an amount equal to 10 percent of the value of each covered investment that was not divested or placed into a qualified blind trust,” according to the draft bill. Further, the bill outlines that the attorney general would have to file a civil action and impose penalties.
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Merkley sought to earn Hawley’s support for the ETHICS Act, but the Republican does not think the measure goes far enough in cracking down on trading, a source familiar with Hawley’s thinking said. Particularly, Hawley raised concerns with the fact that sitting senators and their spouses would not have to divest holdings until their reelection, which is every six years, the source said.
The Washington Examiner has reached out to spokespeople for Merkley, Fetterman, and Brown.
