By now, many Americans are aware of the bombshell series of reports from Business Insider which accused members of Congress and their staffers of violating the 2012 STOCK Act, which regulates congressional securities trading. If there has been a figurehead for these reports, it has been none other than Speaker of the House Nancy Pelosi, who infamously defended members’ ability to sell individual stocks despite their access to non-public information that directly affects the market. However, after witnessing public disapproval and universal dissent within both major political parties, and even from former President Donald Trump, it would seem Pelosi has started to publicly backtrack from her prior views and is now publicly entertaining restrictions on congressional trading.
At her weekly news conference last week, Pelosi said that she could accept a ban on the ownership of individual stocks by lawmakers so long as the new rules also applied to the judicial branch.
Of course, her support is tepid, but it sure is a big change from the, “We’re a free market economy…” position she took just a little over two months ago. Presumably, the spotlight will now shift to the multiple proposals that are floating around to regulate this issue, many of which are backed by bipartisan sponsorship.
One of the higher-profile bipartisan proposals gaining traction, the TRUST in Congress Act, brought by Reps. Abigail Spanberger (D-VA) and Chip Roy (R-TX), would ban congressional members and their immediate family members from trading securities individually but would allow them to own securities held solely within a blind trust. Another bipartisan proposal from Sens. Elizabeth Warren (D-MA) and Steve Daines (R-MT), the Bipartisan Ban on Congressional Stock Ownership Act, goes a step further and bans members of Congress and their spouses from owning and trading individual stocks completely. These are just two of the proposals on the table but there are many others coming from both sides of the aisle.
We may be witnessing the first consequential shift in how congressional members can participate in the stock market. Unlike some of our elected officials, the American public is not ignorant of the elephant in the room; stock trading by congressional members is a rather glaring conflict of interest. With the large swaths of information gleaned from congressional committees, members of Congress can take advantage of market-moving insider information.
Depending on which poll you prefer, American voters are between 67 percent and 76 percent in favor of banning sitting congressional members from trading securities, with majority support from registered Republicans, Democrats, and Independents alike. This is a rare instance of complete bipartisan agreement and is one that makes sense regardless of where you stand on other issues.
Despite majority support amongst the American public and politicians for implementing restrictions, there are some rather loud detractors. Perhaps the most notable is Sen. Tommy Tuberville (R-AL), who called the proposals for banning congressional trading “ridiculous.” Notably, from Business Insider’s reports, Tuberville had one of the most egregious records of violating the STOCK Act, with over 132 stock disclosures being weeks to months late, totaling at least $894,000 in trades. To make matters worse, Tuberville justified his critique by saying, “I think it would really cut back on the amount of people that would want to come up here and serve, I really do … We don’t need that.” Perhaps Tuberville missed the memo that being a public official is not about trading stocks but instead is about promoting and protecting the interests of the American people. His comments are not only tone-deaf but his trading conduct is a slap in the face to the American people who do not have the luxury of sitting in on multiple committees that directly correlate to the stocks they buy and sell.
Thankfully, congressional members like Tuberville are in the minority, but that doesn’t mean they still cannot cause damage. In 2013, for instance, Congress quietly removed parts of the STOCK Act before passing it.
Trust in government is nearing an all-time low, but addressing this issue would be a positive step towards mending that wound.
Addison Hosner is a licensed Florida attorney and solo practitioner based in Orlando, FL. Addison holds a Juris Doctor, M.S. Negotiation & Conflict Resolution, and a M.S. Government Organization & Leadership degree from Creighton University School of Law. He is a Young Voices commentator, speaker, and writer.