According to a report from Punchbowl News, House Minority Leader Kevin McCarthy has discussed plans to outright ban lawmakers from being able to hold or trade stocks.
Representative Kevin McCarthy (R-CA) is reportedly considering an “outright ban” on members of Congress being able to hold or trade stocks if the GOP were to retake the majority in the midterm elections.
“McCarthy told us his planning on this front is in its early stages, and he hasn’t yet decided on what kind of limitations there may be on stock trades or holdings,” Punchbowl News reports. “One idea would be to force lawmakers to hold only professionally managed mutual funds. Another proposal the GOP leadership is considering would bar lawmakers from holding stocks in companies or industries their committees oversee.”
“Other members have advocated for mandatory blind trusts for lawmakers’ holdings,” the report continues. “There’s been renewed debate in recent months over putting curbs on lawmakers trading and holding individual stocks. The logic is simple – members and senators often get sensitive information about U.S. policy before it becomes public. Under the STOCK Act, lawmakers and aides are prohibited from trading on such information.”
Rep. McCarthy’s comments come soon after a December report from Business Insider revealed that several lawmakers had violated the STOCK Act.
Business Insider’s report found:
- 52 members of Congress and 182 senior-level congressional staffers who have violated a federal conflicts-of-interest law.
- That lawmakers and top congressional staffers face minimal and inconsistently applied penalties for violating the STOCK Act, and that it’s nearly impossible (but we did it anyway) to comprehensively obtain “public records” about senior-level staffers’ personal finances.
- Nearly 75 federal lawmakers who held stocks in COVID-19 vaccine makers Moderna, Johnson & Johnson, or Pfizer in 2020, with many of them buying or selling these stocks in the early weeks of the pandemic.
- 15 lawmakers tasked with shaping US defense policy that actively invest in military contractors.
- More than a dozen environmentally-minded Democrats who invest in fossil fuel companies or other corporations with concerning environmental track records.
- 16 lawmakers who buy and hold tobacco company stock, including some who have publicly fought smoking.
- Senators, House members, and top Capitol Hill staffers who will help decide whether the government regulates cryptocurrency — and are themselves invested in bitcoin and altcoins.
Speaker of the House Nancy Pelosi is among those most heavily criticized for her stock market trading, as she and her husband Paul have made millions off of what some claim to be insider trading. In December, Pelosi and her husband spent millions on call options for stocks just days after she defended lawmakers’ rights to trade in the stock market.
Here is that exchange between Pelosi and the reporter:
REPORTER: Madam Speaker, Insider just completed a five‑month investigation finding that 49 Members of Congress and 182 senior Congressional staffers have violated the STOCK Act, the insider trading law. I’m wondering if you have any reaction to that. And secondly, should Members of Congress and their spouses be banned from trading individual stocks while serving in Congress?
NANCY PELOSI, HOUSE SPEAKER: No, I don’t – no, to the second one. Any – we have a responsibility to report in the stock – on the stock. But I don’t – I’m not familiar with that five month review, but if the people aren’t reporting, they should be.
REPORTER: Why shouldn’t they be banned?
PELOSI: Because this is a free market and people – we are a free market economy. They should be able to participate in that.
The question is, is McCarthy right? Should members of Congress be barred from trading stocks while in office? Or is Pelosi correct? Should we protect the idea of the free market for everyone, including lawmakers?