WASHINGTON — Members of Congress would be prohibited from trading individual stocks and so would their spouses if a bill introduced by Georgia U.S. Sen. Jon Ossoff were to become law.
His proposal is among several filed by lawmakers, including some with bipartisan support, to address concerns that members of Congress benefit financially from information they receive in office.
Ossoff said his bill is a continuation of promises he made on the campaign trail at a time when both incumbent Georgia senators, David Perdue and Kelly Loeffler, were being criticized for stock trading during the early stages of the coronavirus pandemic.
“Members of Congress should not be playing the stock market while we make federal policy and when we have extraordinary access to privileged confidential information, as a matter of basic integrity and ethics in government,” Ossoff, an Atlanta Democrat, said recently.
Loeffler and Perdue were both among Congress’ most wealthy members and most active in the stock market. Critics accused them of using information they gleaned from private Senate briefings to make a profit during the pandemic.
It became a major issue on the campaign trail during the 2020 general election and January 2021 runoffs, which Loeffler and Perdue both lost.
Both senators said at the time that they had done nothing wrong and that their financial portfolios were handled by advisers acting independently. Ultimately, they both decided to put most of their wealth into mutual funds and similar collections of securities called exchange-traded funds.
Neither was ever accused of wrongdoing by law enforcement, financial regulators or the Senate Ethics Committee.
Ossoff in particular went after Perdue hard on the topic, calling him a “crook” in a viral exchange during their only debate. He also said he would put his own net worth into a blind trust if elected, which he did a few months after taking office.
Ossoff’s proposal would require every senator and U.S. representative, their spouses and dependent children to put their stock shares into a qualified blind trust. The legislation is similar to a bill filed last year in the U.S. House by Virginia Democratic U.S. Rep. Abigail Spanberger and Texas Republican U.S. Rep. Chip Roy.
But Ossoff’s bill takes it a step further by outlining financial penalties for those who violate the new rules: a fine equal to one year of their congressional salary. Arizona U.S. Sen. Mark Kelly, a fellow Democrat, is his partner on the legislation.
Craig Holman is a lobbyist for Public Citizen, a consumer advocacy group and federal government watchdog. He has also been an outspoken critic of laws that allow members of Congress to trade stocks despite their involvement in legislation that could affect a corporation’s’ profitability.
Transparency laws that require members of Congress to disclose their assets and stock transactions mean that blind trusts are never completely blind, Holman said. He said it would be better to require members of Congress to put their assets into mutual funds that include stocks from a wide variety of companies and industries, making it harder for lawmakers’ decisions to have a direct impact on their wealth.
Still, proposals such as Ossoff’s are improvements from the status quo, he said.
“Qualified blind trust is better than what we’ve got now,” Holman said. “What we have now is members of Congress can buy and sell individual stocks at whim.”
There are other proposals on the table. House Republican Leader Kevin McCarthy has told allies he would consider a ban on stock trading if his party gains control of the chamber after the November midterms and he becomes speaker.
Two Democrats, U.S. Sen. Jeff Merkley of Oregon and U.S. Rep. Raja Krishnamoorthi of Illinois, have introduced a bill that would bar members of Congress and senior congressional staff from buying or selling individual stocks and from serving on any corporate boards while in office. Georgia U.S. Sen. Raphael Warnock, who defeated Loeffler, is among the co-sponsors of that bill.
Republican U.S. Sen. Josh Hawley of Missouri introduced a bill recently that would prohibit members of Congress and their spouses from holding, purchasing or selling stocks. Those found in violation would be required to forfeit any profits to the federal government and could face additional fines.
None of these proposals have been scheduled for committee hearings. House Speaker Nancy Pelosi has backed stiffer penalties for lawmakers who fail to comply with existing laws requiring lawmakers to report stock trades of more than $1,000 within 45 days.
Pelosi’s husband has an active portfolio, and she routinely is listed as one of the richest members of Congress. Although she recently expressed an openness to listening to efforts to ban stock trading, she said in December that she supports lawmakers managing their own portfolios.
“This is a free market and people — we are a free-market economy,” she said. “They should be able to participate in that.”
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