Democrats release text of bill banning lawmakers, judges from trading stocks
Editor’s Note: This story has been updated to clarify that the bill itself was introduced Wednesday. The text of the bill was released Tuesday night.
House Democrats introduced the text of a long-awaited bill on Tuesday that seeks to ban members of Congress, federal judges, Supreme Court justices, the president and others from trading stocks, in an attempt to crack down on conflicts of interest throughout the government.
The 26-page bill, titled the Combatting Financial Conflicts of Interest in Government Act, would ban a slew of government officials from trading or owning investments in securities, commodities, futures, cryptocurrency or other digital assets.
Those covered by the legislation include members of Congress, their spouses and dependent children, senior congressional staffers, the president, the vice president, political appointees, judicial officers — including Supreme Court justices and various judges — members of the Federal Reserve System’s Board of Governors and the president or vice president of a Federal Reserve bank.
Individuals subject to the ban would be required to divest their holdings or place them into a qualified blind trust.
The measure, however, does not pertain to investments in diversified mutual funds, U.S. Treasury bills, state or municipal government bills, notes or bonds and investment funds held as part of a federal, state or local government employee retirement plan, among other types of widely held, diversified and publicly traded investment funds.
The House Administration Committee released the text of the bill months after Speaker Nancy Pelosi (D-Calif.) in February directed Rep. Zoe Lofgren (D-Calif.), chairwoman of the House Administration Committee, to draft a bill.
The push to ban lawmakers from trading stocks has gained steam on Capitol Hill amid reports that members have violated laws meant to prevent conflicts of interests involving financial transactions.
In September, The New York Times published an extensive report that said 97 lawmakers or their family members traded financial assets in the past three years that could be conflicts of interest.
Pelosi — whose husband, Paul Pelosi, is a venture capitalist — was at first against the idea of a ban on lawmaker stock trading, but ultimately endorsed the push in February. A bipartisan group of House lawmakers put the topic back in the news earlier this month when it penned a letter to leadership asking for a vote on a bill reforming lawmaker stock trading.
Earlier this month, Pelosi said such a bill would likely come to the floor this month.
But time is running out.
The House reconvenes on Wednesday for the final three days of legislative business before the midterm elections. House lawmakers are scheduled to leave Washington on Friday and are not slated to return until after November.
Even if there is enough time to bring the bill to the floor, it is unclear that it has the votes to pass.
Punchbowl News reported earlier on Tuesday that House Majority Leader Steny Hoyer (D-Md.), who sets the schedule in the lower chamber, has expressed opposition to the ban on lawmaker stock trading.
His spokesperson, however, told the outlet that Hoyer has “not seen final legislation, and will reserve his official decision until that time.”
A group of senators have been working on separate legislation to ban lawmaker stock trading.
The bill text introduced on Tuesday also increases penalties for violating the provisions or the measure.
Covered individuals who violate trading or ownership restrictions would be subject to a $1,000 fine. If the violation continues for more than 30 days, they would be subject to an additional $1,000 fine plus “an amount equal to 10 percent of the value of the covered investment that is the subject of violation at the beginning of the additional 30-day period of a continuing violation.”
The same goes for those who fail to file their financial reports on time. Tardy individuals would face a $500 fee — up from $200 — and for every additional 30 days, they would have to pay another $500 fine plus 10 percent of the value of the transactions that should have been included in the report.
Additionally, the measure gives the attorney general authority to bring civil action against covered individuals who “knowingly and willfully” make transactions or holds a prohibited investment that is in violation of the bill.