Service in Congress should not provide a platform for insider trading
As a member of the House Committee on Intelligence, I regularly receive briefings on classified information. In these briefings we are told things that, in some instances, can move the markets one way or the other. Obviously, this kind of insight could benefit personal investment decisions and you may be thinking, “that’s why there must be a law against it, right?” Unfortunately, it’s not so black and white.
In January 2020, before most of the world knew what was happening, many in Congress received briefings on the potential economic and public health impact of the novel coronavirus that has become known as COVID-19. Then, the chairman of the Senate Intelligence Committee, Richard Burr, sold a significant portion of his stock holdings after receiving a classified briefing and right before the market tanked in early-2020.
Two other sitting senators were accused of using inside information on the COVID-19 pandemic to their financial advantage. Meanwhile, millions of Americans watched as their hard-earned retirement funds, pensions and savings plummeted.
That’s just plain wrong. Public office shouldn’t be a conduit for private gain. Such practices undermine the already low confidence that the American people have in their government.
The STOCK Act, which was passed under President Obama, was supposed to prevent lawmakers from buying and selling stocks based on proprietary information they receive in their position in Congress. However, many members have found ways around its definition of “insider trading.” Even when they get caught, enforcement has been spotty at best. We need to remove that temptation entirely.
The simple solution is that lawmakers should not be able to buy or sell individual stocks, options or bonds while serving in office. The decisions we make in our roles as legislators, appropriators and investigators can move markets. Citizens and taxpayers shouldn’t be left to wonder if we’re making those decisions on their behalf or for our own, personal profit. That applies especially to our oversight of private businesses.
In addition to serving on the Intelligence Committee, I am chairman of the Subcommittee on Economic and Consumer Policy. My subcommittee regularly takes testimony and issues reports on industries from vaping and baby food to child car-seats and prescription drugs. Our actions as public officials can result in share price fluctuations. Money on Wall Street is made or lost within minutes of the news media reporting an oversight action by Congress.
That’s not to say congressional oversight isn’t crucial, and I’m proud of my subcommittee’s work to protect consumers and hold bad actors accountable. But who is holding members of Congress accountable when they use inside information to benefit themselves or others? The answer is no one.
It’s important to note that I’m only one of dozens of subcommittee chairs. Add to that the full committee chairs. Then there’s everyone on the appropriations and budget committees. And everyone on the intelligence and defense committees. And all those in senior leadership positions. Keeping track of all the possible conflicts is a nearly impossible task.
In fact, the most recent allegations of insider trading in Congress weren’t identified by regulators or oversight authorities. They were discovered by investigative reporters. Good for them and the important role played by the press. But that shouldn’t be our only safeguard against this corrosive practice. The huge amount of sensitive information flowing through Congress and the lack of outside oversight necessitates that we remove the temptation altogether.
The Ban Conflicted Trading Act, which I’ve introduced, provides a simple solution. It would prevent any member of the Congress or the Senate from trading in individual stocks as long as they’re in office. No one will have to interpret whether or not such trades were made with the benefit of inside information. If you’re a member of Congress, you just can’t do it.
This is the only way that we can guarantee to the constituents and taxpayers we serve that we’re putting the public interest ahead of any personal financial interest. With billions of dollars at stake every day, Americans deserve that assurance.
Raja Krishnamoorthi represents the 8th District of Illinois.