A proposition came before the U.S. House last month that shouldn’t be lost in the cacophony of daily concerns and contentious issues — no matter how much some members of Congress might like to forget it. A House member is pushing House leadership to create and pass legislation that would ban members of Congress from owning or trading stocks.
It’s a good idea.
It’s a response, not only to a problem that has taken down more than one member of Congress — trading on privileged information — but one that lends itself to a public perception of corruption that undermines the authority of a legislative body that already has an image problem.
“This glaring problem will not go away until it is fixed and Congress should not delay when we have the power to fix it,” Democratic Rep. Jared Golden of Maine wrote in a letter addressed to both House Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy. “Perhaps this means some of our colleagues will miss out on lucrative investment opportunities. We don’t care. We came to Congress to serve our country, not turn a quick buck.”
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As of last week, 27 House members had signed onto the letter — most of them Democrats, but two Republicans, also. We suspect the number will grow.
The proposal was initially met with reluctance from Pelosi, though she has since said that she’ll bring a bill to the floor “if members want to do that.”
She should also be concerned with what the American people want.
House Majority Leader Steny Hoyer said that Democrats would consider a stock trading ban, but that he was “not sure that it’s necessary” because blatant insider trading is already illegal.
But an investigation conducted by Insider “found that at least 54 current members of Congress and almost 200 senior congressional staffers have violated the law by failing to disclose their transactions on time. And the law’s enforcement is uneven and inconsistent.”
Insider also identified numerous examples of federal lawmakers trading stocks in industries they oversee as part of their congressional committee assignments, including within the defense, health care and energy industries. If that doesn’t present a potential conflict of interest, nothing does.
Golden’s letter says that while insider trading is already explicitly illegal, “it can be nearly impossible to determine what knowledge counts as ‘nonpublic’ or how personally involved members are in their stock trades.”
The letter follows pandemic-related stock-trading scandals in 2020 involving several senators — including North Carolina’s Richard Burr. His uncharacteristic sale of $1.7 million in stocks following congressional briefings on COVID-19 led to an investigation by the Justice Department and the Securities and Exchange Commission.
No charges have been filed against Burr, but the perception that he may have possibly used his insider knowledge for monetary gain has left many with a sour taste.
Though Golden’s letter doesn’t call for specifics, legislation would likely allow for blind trust mechanisms — though Golden would like to see family members and staffers prevented from investing, also.
“Similar to my time in the military, we always said the whole family serves, and that should be true of members of Congress,” he said.
We should know by now that members of Congress are subject to more temptation than most of their constituents, though they’re not likely to be more resistant.
“One of the most formative periods of my life was my four years of active duty service in the United States Marine Corps,” Golden said, explaining that while the institution places “a lot of trust” in each Marine, certain rules and norms remained in place to keep everyone honest. “Even good people sometimes find themselves in making bad decisions, or being sloppy,” he said.
That’s why it’s best to remove temptation.
Congress polls very poorly these days — its approval rate is around 21%, according to Gallup, and 14%, according to Ballotpedia — for a variety of reasons, including the idea that members might take advantage of their positions to fatten their wallets.
The guiding principle, to which most of us would agree, is that congressional service should not be a pathway to riches. Running for office is already limited to people of a certain monetary standard, leaving out many who would serve well. Making a profit from such service — beyond the standard salary — is almost innately immoral.
Golden and allies should keep up the pressure.