Rep. Steny Hoyer (D-Md.) has yet to see final legislation to ban lawmakers from trading in individual stocks, a spokesperson said Tuesday, but he was reportedly skeptical of the idea. (Photo: Anadolu Agency via Getty Images)
House Democrats’ legislation to prohibit lawmakers from owning and trading stocks in individual companies hit a snag Tuesday when a top member’s support was thrown into doubt.
Democrats’ main goal for their remaining few days in Washington before leaving Friday to hit the campaign trail until the Nov. 8 elections is to pass a bill temporarily funding the government until mid-December.
But this week also provides the last chance for them to put up a few more legislative achievements to show voters ― and the proposed ban could be one of those ― even if it will not pass the Senate soon, if ever.
House Majority Leader Steny Hoyer (D-Md.) listed the bill for “possible consideration” on the floor Friday, raising the hopes of ban backers. But according to Punchbowl News on Tuesday, Hoyer was leaning against it.
Hoyer’s office said it was too soon to say whether he would support a bill or not, holding out the possibility it could still make it to the floor.
Margaret Mulkerrin, a spokesperson for Hoyer, said he would like to see increased penalties for lawmakers who engage in insider trading, including congressional ethics citations and potential expulsion from the House.
“He has also not seen final legislation and will reserve his official decision until that time,” Mulkerrin said.
That statement was made, however, before the House Committee on Administration unveiled a 26-page stock ban bill Tuesday night.
The bill would prohibit members of Congress, their spouses and dependent children, the president, vice president, political appointees confirmed by the Senate, Supreme Court justices and federal judges as well as board members and regional bank presidents of the Federal Reserve from owning stocks, commodities, cryptocurrencies or options unless they were in a blind trust or in widely held instruments, such as mutual funds or exchange-traded funds.
Lawmakers are already barred from using insider information to make money by trading stocks and are required to report trades by themselves or family members soon after they are made under a 2012 law called the STOCK Act, but proponents of the ban say disclosure doesn’t go far enough.
An analysis by The New York Times found almost 1 in 5 members of Congress, from both parties, had in recent years bought stocks that could have intersected with the jurisdictions of the committees they served on. Often, though, according to the Times, lawmakers said they followed the law or that the transaction was made by a relative or broker who had no knowledge of the lawmaker’s congressional work.
And questionable trades are not unheard of. Former representative Chris Collins, a Republican from Western New York, pleaded guilty in 2020 to conspiracy to commit securities fraud after he passed on a tip about a drug company to his son to help him avoid losing money on the company’s stock.
Some lawmakers, though, say banning stock trading is unnecessary and would hurt office holders with little wealth by restricting them to investments like mutual funds, composed of a variety of stocks.
The bill unveiled Tuesday night received a thumbs down on Twitter from Walter Shaub, senior ethics fellow with the Project on Government Oversight and former director of the executive branch Office of Government Ethics.
Shaub said language in the bill allowing his old OGE office, the federal Judicial Conference as well as the House and Senate to set their own rules regarding what qualified as a blind trust was a giant loophole.
THEY WRITE A BLANK CHECK FOR THE TWO ETHICS COMMITTEES, THE OFFICE OF GOVERNMENT ETHICS, AND THE JUDICIAL BRANCH TO APPROVE ANY KIND OF ARRANGEMENT THEY WANT, SUBJECT TO NO STANDARDS WHATSOEVER. LITERALLY ANYTHING GOES. ANY DAMN THING!!!! THIS BILL WOULD WEAKEN GOVERNMENT ETHICS. pic.twitter.com/LLRuIpBYlu
— Walter Shaub (@waltshaub) September 28, 2022
This article originally appeared on HuffPost and has been updated.