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We’ve been optimistic for some time about the need to tighten rules on members of Congress and their ability to make individual stock trades. With yet another report of lawmakers and their family members conducting a variety of businesses in sectors related to their official work, there should be little doubt that the time has come to ban this activity.
Maine’s 2nd Congressional District Assemblyman Jared Golden has been advocating such a ban for some time, and the case is growing in strength.
Earlier in the month, Golden was part of a bipartisan group of members in the US House of Representatives who sent a letter to House leaders outlining their priorities for possible legislation to reform stock practices in Congress. These legislators have been involved in various efforts to address this issue that will hopefully be combined into a package that can pass both houses of Congress and be signed into law.
For a member of Congress to violate the STOCK Act, a 2012 law passed to prevent insider trading by legislators, a trade or trade must be made using non-public information obtained by their role obtained as an elected official. This can be difficult to prove, even in cases where the appearance of a conflict of interest is overwhelming.
There is perhaps no more prominent and blatant example of the limits of existing law than the husband of House Speaker Nancy Pelosi, Paul Pelosi, a venture capitalist who recently sold shares in a multimillion-dollar microchip company before in the House of Representatives a bill to be supported is voted on domestic chip manufacturing.
Spokeswoman Pelosi was previously dismissive of the idea of a stock trading ban until she was no longer. Now she says encouragingly that such a bill could come on the table later this month. The reasons for action are piling up.
This week, the New York Times published an analysis of congressional stock dealings between 2019 and 2021, which found that nearly 100 members (or their spouses or dependent children) conducted deals that could be linked to their committee work in Congress.
Maine Senator Angus King was on the list, and the Times noted that his wife “bought or sold shares in oil giants, a water company, and defense contractors, all of which fell within the purview of committees he served on.” King serves on the Energy and Natural Resources Committees and the Armed Forces Committee, among others.
According to King’s office, his wife has a financial advisor who is managing a portfolio without her direction.
“Senator King and his wife retain their own financial adviser and do not advise each other on investments,” King spokesman Matthew Felling said in a statement.
This aligns with many other legislative responses that we have observed in situations like this. The legislature and its offices often indicate that the transactions in question were made by her spouse or a financial advisor. And under current law, it all seems perfectly legitimate. But honestly it shouldn’t be.
We are neither lawyers nor financial analysts, but we wouldn’t be surprised if not one of the legislators on the New York Times list ended up in undeniably violating the STOCK Act. However, we don’t need to be legal or financial experts to see the corrosive effect that repeated stock controversies are having on public confidence in their government.
King’s office also told us that he is working with Oregon Sen. Jeff Merkley to strengthen congressional guidance on stock trading. That is a good thing. And it reminds us of a good point Merkley made last year.
“It’s a huge conflict of interest for someone who, for example, trades pharmaceutical stocks and at the same time sets guidelines for pharmaceutical companies,” Merkley told NPR in September 2021.
With repeated news stories about legislators (and their families) doing business in sectors where they are involved in legislative oversight and policy-making, there doesn’t even need to be real fires related to actual conflict or corruption. The smoke is bad enough. The proliferation of these apparent conflicts of interest in Congress proves that previous attempts to address this issue, such as the STOCK Act, have failed.
No more half measures. It’s time for a total ban.