As House Democrats reportedly prepare to introduce legislation prohibiting members of Congress and their spouses from trading stocks, some lawmakers from their own party are raising questions about the bill and downplaying its chances of being enacted.
Top House Democrats, led by House Administration Committee Chairwoman Zoe Lofgren (D-CA), are set to unveil a sweeping bill as soon as next week that would compel members of Congress to place their assets in blind trusts and relinquish personal control over investment decisions. Similar restrictions would also apply to lawmakers’ spouses and some senior congressional aides. The legislation, which is supported in principle by House Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Chuck Schumer (D-NY), was reported on Thursday by Punchbowl News.
The Washington Examiner spoke with several Democratic lawmakers supportive of the bill’s initial framework, including Reps. Mark Takano (D-CA), Annie Kuster (D-NH), and Al Green (D-TX). But not all House Democrats are on board with their party’s attempt to crack down on lawmakers’ stock trading, a practice that has long raised serious ethical concerns and led to accusations of — and, at times, criminal convictions for — insider trading.
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Rep. Brenda Lawrence (D-MI) said in an interview that she was “very” skeptical of any legislation that would impose additional ethics rules on members of Congress, arguing that the restrictions lawmakers already face are disproportionate to comparatively lax ethics requirements binding justices of the Supreme Court.
“If you don’t have the courage to put ethical standards on the Supreme Court, and we have all these ethics requirements and limitations, including reporting and being transparent, then I don’t understand,” Lawrence said.
“We have so many ethical requirements,” she continued. “I don’t understand the premise behind this. It’s like, you’re writing a bill to do what?”
Rep. Donald Payne Jr. (D-NJ) told the Washington Examiner that while any new law would not “apply” to him since does not own any stock, he was hesitant to back any legislation that would impose a trading ban on his colleagues who do.
“We’re American citizens too and, you know, have the need to take care of our families and invest also,” Payne argued.
Rep. Terri Sewell (D-AL), a close ally of Democratic leadership, also expressed skepticism toward the bill and suggested that her constituents were more focused on addressing inflation and economic concerns than on banning their representatives from trading stocks.
“I have to think about it,” Sewell said in an interview. “I mean, the reality is that we finally have insider trading [laws], and so we can’t trade on information, which is good. [But] this would actually be a total ban against any trading.”
“I’m a free market person,” she continued. “I have been very responsible as a lawmaker in terms of my [trades]. I have a managed account that someone else runs for me. And so, if I do that, then I’m not the one making the daily decisions about my stock. How does that work in this [bill]?”
Rep. Lou Correa (D-CA) added that the specifics of any ban on stock trading needed to be clarified by the bill’s sponsors.
“Does that mean index fund trading? What does it mean? I’m going to look at it carefully, what the purpose is, and what the issue is,” he said.
Even members of House Democratic leadership seemed to take diverging positions on the issue. Asked by the Washington Examiner whether or not he backs banning stock trading by members of Congress, House Majority Leader Steny Hoyer (D-MD) declined to answer the question directly, instead saying that he favors “holding people accountable who violate insider trading laws.” But Rep. Katherine Clark (D-MA), the assistant speaker, said she strongly supports restricting lawmaker trading, telling the Washington Examiner in an interview that “we want to make sure that we are encouraging transparency and confidence of the people in America that we are not profiting off of our jobs.”
Republicans largely dismissed the bill as an attempt by Pelosi to divert public attention from ethical questions surrounding her own family’s investment activities.
“We should not pass a law because the speaker is trading actively. We should not have 435 members of the House have a set of rules apply to them because the speaker of the House is dealing for her own wealth,” Rep. Patrick McHenry (R-NC), the ranking member of the House Financial Services Committee, told the Washington Examiner. House Minority Leader Kevin McCarthy (R-CA) added that the “only reason” a stock trading ban hadn’t already received a floor vote in the House is because the speaker “has held it up so her husband can trade options.”
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Pelosi’s reported support for the bill is notable given her previous opposition to a congressional stock trading ban. In January, she told reporters that she backed continuing to allow lawmakers to trade stocks because she “come[s] down always in favor of trusting our members.”
“To give a blanket attitude of ‘We can’t do this and we can’t do that because we can’t be trusted,’ I just don’t buy into that,” the speaker said at the time.
