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bipartisan restoring faith in government act
Most US House Incumbents Filed Financial Disclosure Extensions Amid Push for Stock Trading Ban
"It's a giant red flag when so many representatives are beating out the S&P 500 despite the most tumultuous market in years, raising questions whether some are taking advantage of their privileged positions," said one ethics advocate.
Jul 07, 2023
The government watchdog Accountable.US reported Friday that a majority of incumbent members in the U.S. House of Representatives filed extensions this year for their 2022 financial disclosures, a revelation that comes as congressional Democrats are leading multiple bills that would ban lawmakers and their relatives from stock trading and other self-dealing.
According to the Accountable.US analysis, 257 House incumbents—or nearly 60% of all lower chamber lawmakers—filed for financial disclosure extensions for last year. Of those 257 lawmakers, 140 were Republicans. Nine out of 10 House members filing for extensions sought the maximum 90-day postponement.
"It's a giant red flag when so many representatives are beating out the S&P 500 despite the most tumultuous market in years, raising questions whether some are taking advantage of their privileged positions," Liz Zelnick, who directs the economic security and corporate power program at Accountable.US, said in a statement.
The Ethics in Government Act of 1978 and the Stop Trading Congressional Knowledge (STOCK) Act of 2012 require annual financial disclosures by members of Congress in order to identify and take action when government officials use their positions of influence for personal gain.
However, critics have long called existing legislation "toothless," while calling for more stringent safeguards against self-dealing by members of Congress.
"The status quo has allowed many in Congress to trade in secret by kicking the can on public disclosure, which only invites corruption and conflicts of interest," Zelnick argued. "The less means and opportunity Congress has to use their influence to game the stock market for personal and family gain, the less it will happen."
Common Dreams noted last September that nearly 100 members of Congress reported trading stock in companies influenced by their committees.
Several proposed measures—including the Transparent Representation Upholding Service and Trust in Congress (TRUST) Act, the Ending Trading and Holdings in Congressional Stocks (ETHICS) Act, and the Bipartisan Restoring Faith in Government Act—would ban members of Congress and their families from owning or trading shares.
"If the MAGA House majority is unwilling to act on popular and bipartisan efforts to prevent self-dealing on Wall Street and restore public trust in government, it would only raise more questions about what they have to hide," said Zelnick.
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US House Members Unveil Stock Trading Ban: Bipartisan Restoring Faith in Government Act
"When members have access to classified information, we should not be trading in the stock market on it," said Rep. Alexandria Ocasio-Cortez. "It's really that simple."
May 02, 2023
Four members of the U.S. House of Representatives from across the political spectrum came together on Tuesday to introduce the Bipartisan Restoring Faith in Government Act, which would ban federal lawmakers and their immediate relatives from owning and trading stocks.
Momentum for such a ban has been growing in the wake of various investigations last year, but Democrats—who controlled both chambers of Congress in 2022, but now only have a slim majority in the Senate—failed to pass any of the related legislative proposals, despite their popularity among voters.
"The fact that members of the Progressive Caucus, the Freedom Caucus, and the Bipartisan Problem Solvers Caucus, reflecting the entirety of the political spectrum, can find common ground on key issues like this should send a powerful message to America," said Congressman Brian Fitzpatrick (R-Pa.), who is leading the new bill with Reps. Matt Gaetz (R-Fla.), Raja Krishnamoorthi (D-Ill.), and Alexandria Ocasio-Cortez (D-N.Y.).
"We all view this as a critical first step to return the House of Representatives back to the people."
"We must move forward on issues that unite us, including our firm belief that trust in government must be restored, and that members of Congress, including their dependents, must be prohibited from trading in stocks while they are serving in Congress and have access to sensitive, inside information," Fitzpatrick continued. "This is basic common sense and basic Integrity 101. And we all view this as a critical first step to return the House of Representatives back to the people."
As Trevor Potter, president of the Campaign Legal Center and former chair of the Federal Election Commission, explained last September, "Congress passed the Stop Trading on Congressional Knowledge (STOCK) Act into law 10 years ago, but the STOCK Act did not decrease the appearance of corruption that arises when members of Congress engage in suspicious stock trades."
If passed, the new restrictions proposed by Fitzpatrick's diverse group would apply to all members of Congress as well as their spouses and dependents.
"The ability to individually trade stock erodes the public's trust in government," asserted Ocasio-Cortez. "When members have access to classified information, we should not be trading in the stock market on it. It's really that simple."
While the progressive "Squad" member has often clashed with Gaetz, their comments Tuesday made clear they agree on this topic.
"Members of Congress are spending their time trading futures instead of securing the future of our fellow Americans. We cannot allow the Swamp to prioritize investing in stocks over investing in our country," said Gaetz. "As long as concerns about insider trading hang over the legislative process, Congress will never regain the trust of the American people. Our responsibility in Congress is to serve the people, not hedge bets on the stock market."
Krishnamoorthi also agreed that "members of Congress must be focused on their constituents, not their stock portfolios."
The Hill on Tuesday highlighted some recent events that have fueled bipartisan support for a stock trading ban:
In 2022, then-Speaker Nancy Pelosi's (D-Calif.) husband sold millions of dollars worth of shares of a computer chip maker as the House prepared to vote on a bill focused on domestic chip manufacturing. A spokesman for Pelosi said at the time that he sold the shares at a loss.
Former Sen. Richard Burr (R-N.C.), who at the time was chairman of the Senate Intelligence Committee, also unloaded stocks at the onset of the coronavirus pandemic. The Securities and Exchange Commission recently closed a probe of his trading activities without taking action.
The legislation unveiled Tuesday is supported by advocacy groups including the watchdog Citizens for Responsibility and Ethics in Washington (CREW).
"When members of Congress own and trade stock in companies they regulate they undermine the democracy that they were elected to serve," argued CREW policy director Debra Perlin. "It is Congress' duty to rebuild the trust that it has lost by banning members of Congress, their spouses, and their dependent children from owning or trading stocks. And that is precisely what the Bipartisan Restoring Faith in Government Act does."
The proposed "complete prohibition on congressional stock ownership demonstrates that in our democracy the public's needs, rather than members' stock portfolios, come first," Perlin added. "CREW commends Rep. Fitzpatrick for his work on this issue and strongly encourages Congress to pass stock ban legislation as quickly as possible."
Emma Lydon, managing director of P Street, the government affairs sister organization of the Progressive Change Campaign Committee, similarly called on the House—which is now narrowly controlled by Republicans—to "take swift action to pass this critical, bipartisan anti-corruption legislation to restore public trust in our democracy."
"Elected officials should represent the interests of their constituents, not their own pocketbooks," declared Lydon. "It's a scandal that members of Congress are still allowed to own and trade individual stocks while casting votes that move markets and transform economic sectors."
This post has been updated to correct Congressman Brian Fitzpatrick's political party.
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