Joining Pelosi, Hoyer says lawmakers should be free to trade stocks
House Majority Leader Steny Hoyer (D-Md.) on Wednesday rejected the idea that members of Congress should be barred from owning or trading stocks, arguing that lawmakers should have the same financial privileges as any other American.
The issue has come under increased scrutiny in recent months following revelations that dozens of lawmakers may have violated existing laws designed to eliminate conflicts of interest between legislators and the investments they make — revelations that have triggered a series of proposed legislative fixes from members of both parties.
Hoyer emphasized that he himself owns no stocks, and he welcomed the notion that various committees have signaled an intent to examine those proposals.
“But,” he added, “my general feeling is that members ought not to be in a different situation that they would otherwise be if they weren’t members of Congress.”
“As long as they do so legally, without having some special advantage, my immediate reaction is that it should not be precluded.”
That position puts Hoyer in the same camp as Speaker Nancy Pelosi (D-Calif.), who made waves last month in defending congressional stock traders.
“We’re a free market economy,” Pelosi said at the time. “They should be able to participate in that.”
The comments have raised plenty of eyebrows on and off of Capitol Hill, not least because Pelosi, who ranks among the wealthiest members of Congress, identifies millions of dollars in stocks as part of her annual financial disclosures. The list includes investments in major companies like Apple, Visa and Facebook, all of which have fierce lobbying operations designed to influence a host of legislation before Congress.
Pelosi’s office has repeatedly defended her position, saying those investments are held by her husband, and she has neither control over, nor knowledge of, how they are managed.
Still, a growing number of lawmakers — including members of Pelosi’s House Democratic Caucus — are voicing concerns that stock ownership among members of Congress can create damaging public perceptions that lawmakers are trading on nonpublic information gleaned from their unique work on Capitol Hill, or that they’re crafting legislation with designs to boost their own financial well-being.
“Upholding the public trust is the number one thing that we want to do when we think about this issue,” Rep. Pete Aguilar (D-Calif.), the No. 6 House Democrat, said Wednesday.
Reps. Abigail Spanberger (D-Va.) and Chip Roy (R-Texas) have joined forces on bipartisan legislation that would require members of Congress to divest in individual stocks or shift them to a blind trust, where they would have no control over the everyday management of the investments. Others, like Rep. Alexandria Ocasio-Cortez (D-N.Y.), have gone even further, calling for an outright ban on lawmaker stock ownership.
“There is no reason members of Congress should hold and trade individual stock when we write major policy and have access to sensitive information,” Ocasio-Cortez tweeted last month. She suggested lawmakers have plenty of alternative investment tools, like index funds of thrift savings plans.
It’s hardly the first time Congress has considered the issue of congressional stock trading. In 2012, the parties united to pass the Stop Trading on Congressional Knowledge Act, or STOCK Act, which aims to bar lawmakers from trading on nonpublic information they receive in the course of their work.
That law “made it very clear,” Hoyer said Wednesday, “that any insider information that the member receives cannot be used — and is a criminal offense if used — to trade in stocks.”
Recent reports have revealed, however, that the law is not aggressively enforced. Indeed, an ongoing Business Insider investigation has found that 54 lawmakers, and more than 180 senior staffers, had violated the act, typically without penalty.
Those reports have only fueled concerns about the optics of lawmaker trading in the eyes of voters who, polls indicate, already hold Congress in historically low esteem. It’s a problem that appears to be on the minds of Democratic leaders as they weigh potential legislative remedies.
“We want to make sure that people understand we’re doing this for the right reason,” said Aguilar. “And so to the extent we need to make changes to the STOCK Act, or increase penalties or ensure further compliance with the STOCK Act, we’re not gonna hesitate to do that.”
House Minority Leader Kevin McCarthy (R-Calif.) has also jumped into the debate, pouncing on Pelosi’s defense of lawmaker trading and floating the idea that if Republicans win control of the House after November’s midterm elections, he might adopt a ban on lawmaker stock trades.
That idea was quickly panned by conservative members of his own House conference, however. And Democratic leaders have joined in the criticism, making clear Wednesday that they won’t be taking any ethical advice from the Republican leader, citing his votes to overturn the results of the 2020 presidential election and his refusal to cooperate in the investigation into the Jan. 6 attack on the Capitol.
“What we aren’t going to do is to be lectured on this issue by someone who coddled the twice-impeached president,” Aguilar said. “But we’re gonna be open to legislative solutions if it ensures compliance.”
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