The Committee on House Administration will soon hold an hearing on proposals to prohibit members of Congress from trading individual stocks. This is a step towards eventually voting on such legislation.
According to InsiderThe committee, which spoke to anonymous sources, requested testimony from government watchdog organizations like the Project on Government Oversight and Citizens for Responsibility and Ethics in Washington. Lawmakers have also invited Congressional Research Service to testify.
The committee didn’t confirm the hearing with Insider, saying that hearings aren’t typically announced until a week before they’re held. A committee hearing is a major step towards moving the House’s proposal forward. Republicans have yet to choose a witness for this hearing.
It’s unclear if a stock trading ban would pass if it came to a vote now. Recent bills have received rare bipartisan support. Senate Republicans are in favorThese proposals. Nancy Pelosi, House Speaker (D-California), and Chuck Schumer, Senate Majority Leader (D-New York). Bring back the idea; an early draft of President Joe Biden’s State of the Union address slated for Tuesday night included support for the effortThis may be used to address other priorities.
Stock trading bans have been introduced by both the Senate and House of Representatives. Senators Elizabeth Warren (D.Massachusetts), Steve Daines (R.Montana), and Representatives Pramila Jayapal and Matt Rosendale (R.Montana) introduced one of the most stringent proposals in February.
The bipartisan, bicameral legislation will ban Congressmen and their spouses outrightThey are prohibited from owning stock and they must sell all stocks that are not widely held investment funds during their term. For each violation, a $50,000 fine would be imposed.
This is slightly more than other proposals. Like one ofSenators Jon Ossoff, D-Georgia, and Mark Kelly, D-Arizona. Kelly and Ossoff presented a bill in January that would ban family members from owning more stocks. It would also ban spouses, and dependent children, from actively trading stocks.
However, the bill would only require those stocks to be placed into a blind trust when members of Congress take office. can still influenceTheir stock portfolios in a blind trust, with legislation that could affect companies they have previously invested.
According to government watchdogs, a ban on stock trading must be severe in order for it to be effective. CREW circulated guidelines to Congress. says thatStock trading bans must prohibit members from putting their portfolios in blind trusts, must ban spouses or dependent children from trading stocks, and must have strict enforcement mechanisms. Bans also shouldn’t allow for intent loopholes, CREW says – in other words, there shouldn’t be a carveout for the lawmakers who supposedly unknowingly violated the law.
No one bill that has been introduced so far adopts all of those principles; of those requirements, Sen. Josh Hawley’s (R-Missouri) bill only has a clear enforcement mechanism, according to CREW, requiring members to give gains from banned stock trades to the Treasury Department.
However, enforcement is crucial, as lawmakers have demonstrated. Legislators and their aides Regularly violate the STOCK Act, which places disclosure requirements on members’ stock trades. Financial filings indicate that members will report multimillion-dollar trades often months late. The average fine for violators is $200.