Speaker Nancy Pelosi (D-Calif.) is facing pushback from some members of her own party for defending the practice of members of Congress trading stocks while in office.
When asked about a Business Insider report finding that dozens of lawmakers and staff had violated a law to prevent insider trading, Pelosi last week said that they should all abide by disclosure laws but maintained: “We are a free-market economy. They should be able to participate in that.”
In response, Rep. Abigail Spanberger (D-Va.) tweeted: “No. It cannot be a perk of the job for Members to trade on access to information.”
Rep. Dean Phillips (D-Minn.) – one of the wealthiest members of Congress thanks to his business career that included leading his family’s distillery as well as the gelato brand Talenti – echoed: “I disagree with the Speaker.”
And Rep. Andy Kim (D-N.J.), who represents one of the most competitive districts in the nation, wrote that “I disagree strongly” with Pelosi’s stance. “Americans are losing trust in government and we need to show we serve the people, not our personal/political self-interest.”
Rep. Alexandria Ocasio-Cortez (D-N.Y.), who has said that she doesn’t hold individual stocks or digital assets, reiterated late Friday that she thinks letting members of Congress trade individual stocks is a bad look.
“There is no reason members of Congress should hold and trade individual stock when we write major policy and have access to sensitive information,” Ocasio-Cortez said. “There are many ways members can invest w/o creating actual or appeared conflict of interest, like thrift savings plans or index funds.”
Spanberger introduced a bill earlier this year that would require lawmakers, as well as their spouses and dependent children, to place assets in a blind trust while they’re in office. But lawmakers would still be allowed to own and trade common investments like mutual funds.
“I’ve done it, and believe we all should,” Phillips, a co-sponsor of the bill, said of putting investments into a blind trust.
Pelosi herself also ranks as one of the wealthiest members of Congress, largely because of the real estate and venture capital fortune amassed by her husband, Paul. And while financial disclosures show that her husband engages in stock trades, the Speaker does not own any stocks and her office has stressed that she does not have any involvement.
Spanberger’s legislation has drawn support from colleagues across the spectrum who usually don’t agree on much of anything. But from the far left to the far right, lawmakers of a variety of stripes are behind the idea that members of Congress shouldn’t get to trade stocks when their positions inherently can give them access to market information unavailable to most people.
The 15 co-sponsors of Spanberger’s bill include fellow moderate Democrats, progressives, and even the incoming chairman of the House Freedom Caucus, Rep. Scott Perry (R-Pa.).
Rep. Chip Roy (R-Texas), an original co-sponsor of the measure, reiterated his support for the measure in response to Walter Shaub, a former director of the Office of Government Ethics during the Obama and Trump administrations, saying that Pelosi’s stance was “ridiculous.”
“Actually, Members of Congress SHOULD NOT be trading stocks themselves while in office,” Roy, one of the most conservative members of the House GOP conference, tweeted.
And earlier this month, Ocasio-Cortez clarified that she does not hold individual stocks or digital assets in response to a question on Instagram, citing her seat on the House Financial Services Committee.
“It is absolutely ludicrous that members of Congress can hold and trade individual stock while in office,” Ocasio-Cortez later tweeted. “The access and influence we have should be exercised for the public interest, not our profit. It shouldn’t be legal for us to trade individual stock with the info we have.”
Lawmakers have been subject to stricter disclosure rules in recent years under a 2012 law, known as the Stop Trading on Congressional Knowledge Act, that explicitly prohibits them from using non-public information gained from their official duties for profit. It further requires them to report stock transactions within 30 days after they become aware of a reportable stock transaction and no later than 45 days after the transaction.
But numerous members of Congress have been accused of running afoul of the law, either from alleged insider trading or failing to timely report stock transactions.
Last year, Sen. Richard Burr (R-N.C.) stepped down as chairman of the Senate Intelligence Committee after he was accused of engaging in insider trading in the early days of the COVID-19 pandemic. The Justice Department ultimately decided earlier this year not to pursue charges against him.
Three other senators at the time had also sold substantial amounts of stock in late January and early February 2020 as members of Congress were receiving private briefings on the virus: Sens. James Inhofe (R-Okla.), Dianne Feinstein (D-Calif.) and Kelly Loeffler (R-Ga.). The Justice Department similarly opted not to pursue charges against them either, but the accusations nevertheless became an issue in Loeffler’s Senate runoff campaign, which she ultimately lost.
And this year, two House members have been the subject of ethics investigations.
Following a Business Insider report in March, Rep. Tom Malinowski (D-N.J.) acknowledged that he had failed to file regular reports on stock transactions worth at least $671,000. He has since placed his assets into a blind trust and signed on as a co-sponsor of Spanberger’s bill in June, five months after it was introduced.
The House Ethics Committee is also reviewing allegations that Rep. Mike Kelly’s (R-Pa.) wife purchased stock — worth between $15,000 to $50,000 — in an iron ore mining company last year based on information the lawmaker would have learned from his official duties.
At the time, Kelly had called on the Trump administration to investigate foreign steel imports that threatened the company, which is located in his district. The Office of Congressional Ethics, which investigates allegations of lawmaker wrongdoing and makes referrals to the House Ethics Committee, found that Kelly’s wife purchased the stock a day after her husband was told that the Commerce Department would begin an investigation.
Kelly has maintained that his wife “made a small investment to show her support for the workers and management of this 100-year bedrock of their hometown.” The case remains under review by the Ethics Committee.
While Pelosi defended the practice of lawmakers and their spouses engaging in stock trades, she stressed that they should abide by transparency laws.
“We have a responsibility to report on the stock,” Pelosi said, “If the people aren’t reporting, they should be.”