Reviews | Congress can negotiate stocks or maintain the public trust. Not both.
Most Americans believe that most politicians are corrupt. How depressing – not to mention how terrible it is for the health of democracy. After all, if the system is broken and everyone is a crook anyway, why not elect a reality TV crook with a broken ethical compass to be president?
Sensitive to this problem, Congress generally responds to scandals in its ranks with fits of reform fever. This is what we see now with bills – so numerous bills – aimed at preventing lawmakers from trading stocks while in office.
The question of how to prevent members of Congress from taking unfair advantage of their positions has long been tricky. Legislators have access to information inaccessible to the general public and the power to shape policy in a direction that could prove personally lucrative. In 2012, Congress passed the Stock Act, which prohibits members from trading on the basis of their inside information.
Progressives, like Senator Elizabeth Warren, have argued for years that much more needs to be done.
The issue has drawn renewed attention over the past two years after questions arose about whether some lawmakers made stock trades based on their inside knowledge of the Covid pandemic. Senator Richard Burr, a Republican from North Carolina, earned particular attention from the Securities and Exchange Commission for selling a bunch of stocks in the hospitality industry in February 2020.
Will the Democrats face midterm annihilation?
Last month, an Insider investigation found that dozens of members of Congress violated trading reporting requirements. The report also found that Congress tends to be lax in punishing offenders and publishing information about them. (Policing has never been the institution’s forte.)
Just like that, Congressional stock trading has once again become a hot topic. Lawmakers from both sides are racing to offer their solutions, some tougher than others. Punchbowl News did a roundup last week of the early contenders, with more expectations:
Sen. Jeff Merkley of Oregon and Rep. Raja Krishnamoorthi of Illinois, both Democrats, are championing a bill that would ban lawmakers and top executives from trading individual stocks and require them to place all stocks in a blind trust.
Sen. Josh Hawley, a Republican from Missouri, would require lawmakers and their spouses to use a blind trust — and require lawmakers to return all stock profits to the Treasury Department.
Democratic Senators Jon Ossoff of Georgia and Mark Kelly of Arizona would expand the trust requirement even further, to include dependent children of lawmakers, as would a bill by Representative Abigail Spanberger, a Democrat from Virginia.
Specifics aside, it’s hard to say whether this issue will receive serious consideration in either chamber. The Democratic majority already has a lot to do. It is an election year. The partisan posture will be in full bloom. And currently – and rather awkwardly – House Speaker Nancy Pelosi is opposing major reform.
“The speaker thinks sunlight is the best disinfectant,” said Drew Hammill, her deputy chief of staff, noting that she asked Rep. Zoe Lofgren, who chairs the House Administration Committee. , to examine “unacceptable non-compliance with member reporting requirements”. and consider “the possibility of toughening the sanctions”.
But on the question of whether to restrict trade by lawmakers, the speaker decidedly disagrees. Asked about the issue last month, she dismissed the idea. “We are a free market economy. They should be able to participate. »
It is indeed a free market economy. It’s also one that a growing number of Americans feel isn’t working for them. Combine that with the public’s aforementioned gloomy view of politicians, and you can see where Ms Pelosi’s remark could be seen as a tiny bit out of place.
House Democrats would do well to work to change their leader’s mind. Not just because it’s the right thing to do. But also because the party risks being overwhelmed by the Republicans on the issue.
Make no mistake: GOP leaders know there is a political opening when they see one. Last week, House Minority Leader Kevin McCarthy said he would consider limiting or banning stock trading by members if his party won control of the House in November.
Did you see what he was doing there?
You can bet this problem will come back – and again – as the midterm elections heat up. Democrats need to put themselves in a position to own this debate.
Even lawmakers who follow the straight path understand that America faces a crisis of confidence in its political system and its elected leaders. Legislators can be obsessed with making money once they leave office. Until then, they must remain focused on the public interest, which includes taking steps to reassure the public that they are not all a bunch of corrupt, selfish, money-hungry, greedy crooks. to be able to.