In secret meetings two years ago this month, members of Congress were briefed on what the rest of America would soon learn: A deadly virus was spreading rapidly overseas and headed for the United States. Some lawmakers acted immediately—not in the public’s interest, but in their own. They sold stocks weeks before markets crashed, when the scale of the threat posed by the novel coronavirus became broadly known. A global pandemic was unfolding, and these lawmakers were fretting as much about the health of their financial portfolios as about the health of their constituents.
Congress thought it had already fixed what looked alarmingly like insider trading by its members. In 2012, lawmakers overwhelmingly voted to enact a bill known as the STOCK Act, banning themselves from using information they learned on the job for personal financial benefit. The law required sitting members—along with their staff and public officials in other branches of the government—to make more specific and timely disclosures about their financial transactions. Although the law helped the public spot conflicts of interest, it was unable to prevent them. “Members hear all kinds of news that essentially may amount to insider trading, but it’s almost impossible to enforce insider trading and to prove what happened when,” Senator Jeff Merkley of Oregon, a Democrat who has been pushing for years to restrict stock trading by members of Congress, told me.
The Justice Department investigated several senators for their 2020 stock dumps but filed no charges. The allegations of pandemic profiteering did, however, have major political repercussions and helped Democrats win their narrow Senate majority last year. Among those who found their transactions under federal scrutiny were both Republican senators from Georgia, David Perdue and Kelly Loeffler (they both denied any wrongdoing), who lost in special elections last January. The Democrat who defeated Perdue, Senator Jon Ossoff, is now leading a new push to ban members from trading individual stocks altogether.
“There’s widespread bipartisan disgust with America’s political class, and stock trading by members of Congress is egregious and offensive,” Ossoff told me last week.
Legislation that he’s introduced along with Senator Mark Kelly of Arizona would require members of Congress, their spouses, and dependent children to either sell their individual stocks or place them in a blind trust. (A bipartisan companion bill was previously unveiled in the House.)
The proposal is, not surprisingly, popular with a public that loves to look down on its lawmakers: Nearly two-thirds of all respondents, including majorities …….
Source: https://www.theatlantic.com/politics/archive/2022/01/congress-stock-trading-ban/621402/
