(SNews) – Senators Kirsten Gillibrand (D-NY) and Josh Hawley (R-MO) have just dealt a major blow to former Speaker Nancy Pelosi (D-CA) by introducing a bill to ban stock trading among members of Congress.
The bipartisan Ban Stock Trading for Government Officials Act was introduced Friday.
The bill bans stock trading, stock ownership, and blind trusts; imposes heavy penalties for executive branch stock trading; requires reporting of federal benefits; creates additional transparency in financial disclosure reports; and increases transaction report penalties under the original STOCK Act for Congress, senior executive branch officials, and their spouses and dependents.
“Sunlight is the best disinfectant,” said Senator Gillibrand.
“It is critical that the American people know that their elected leaders are putting the public first – not looking for ways to line their own pockets.”
“The landmark Ban Stock Trading for Government Officials Act bars members of Congress, executive branch officials, and their families from holding or trading stocks, increases disclosure requirements, and imposes harsh penalties on violators.
“This bill is the most substantive bipartisan effort to date and I’m going to work hard alongside Senator Hawley to get it signed into law.”
“Politicians and civil servants shouldn’t spend their time day-trading and trying to make a profit at the expense of the American public, but that’s exactly what so many are doing,” said Senator Hawley.
“My bill with Senator Gillibrand is common sense: ban elected and executive branch officials from trading or holding stocks, and put the American public first.”
The Ban Stock Trading for Government Officials Act includes the following provisions:
Bans stock trading and blind trusts
Prohibits members of Congress, the president, vice president, senior executive branch members, and their spouses and dependents from holding or trading stocks.
There is no exception for blind trusts.
For members of Congress, failure to comply means a heavy penalty of at least 10 percent of the value of the prohibited investments.
Imposes heavy penalties for executive branch stock trading
Executive branch officials must disgorge profits from covered financial interests to Treasury.
Automatic Special Counsel fine of not less than the value of the covered investment that was purchased or sold in violation of the ban or up to $10,000, whichever is more.
The Office of Special Counsel may refer the case to the attorney general and recommend additional civil action if the case is “comparatively substantial in monetary value or extraordinary in nature.”
Requires reporting of federal benefits
Requires members of Congress, senior congressional staff, the president, vice president, and senior executive branch employees to report any time they, a spouse, or a dependent applies for or receives a benefit of value from the federal government.
This includes loans, agreements, contracts, grants, and payments. It does not include salary, compensation or tax refunds.
It would require reporting that includes payment type, recipient name, date and amount.
A penalty of $500 would be imposed for failure to file.
Creates transparency in financial disclosure reports
Requires public, searchable databases of personal financial disclosure reports and filings reporting of any financial transactions as required by the STOCK Act.
Increases STOCK Act transaction report penalties
Increases penalty ($200 to $500) for failing to file STOCK Act transaction reports.
There are a number of stunning statistics that demonstrate why the legislation is urgently needed.
Congress
1 in 3: Members of Congress who traded stocks or other financial assets from 2019 to 2021.
1 in 7: Members of the 117th Congress who violated the STOCK Act by failing to properly report their stock trades.
97: Members of Congress, or their spouses or dependents, who traded in companies affected by their committees from 2019 to 2021.
3,700+: Stock trades reported by members of Congress from 2019 to 2021 that potentially posed conflicts of interest.
17.5%: Average amount by which members of Congress’ stock portfolios outperformed the S&P 500 in 2022.
Executive Branch
Over 1 in 5: Senior federal officials who held stock in companies that were lobbying their agencies from 2016-2021.
11,600: Trades reported by senior federal officials in March 2020 (as COVID hit) – far more than in any other month from 2016-2021.
240: Senior federal officials at health agencies and the Pentagon who owned stock in drug, manufacturing, and biotech companies that won federal contracts related to COVID-19.
60+: Senior federal officials who reported stock trades in companies shortly before their departments announced enforcement actions against those companies from 2016-2021.
The vast majority of Americans believe stock trading should be banned for members of Congress and top executive branch officials.
According to a recent poll by Morning Consult/Politico, at least 63% of Americans support banning stock trading for members of Congress and their families, as well as for the president, vice president, and top officials at federal government agencies.
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