Speaker Nancy Pelosi said Wednesday that Democrats would bring legislation into the House this month that would impose new restrictions on lawmakers’ ability to buy and sell stocks.
Her announcement comes after months of negotiations over whether and how to limit personal financial activities by members of Congress that could create real or perceived conflicts of interest with their public duties. And it came a day after the New York Times published an analysis showing that between 2019 and 2021, 97 congressmen and senators or their immediate family members reported trading in stocks, bonds or other financial assets mandated by committees, who they were could have been influenced serve on.
Ms Pelosi declined to give details of the proposed legislation other than calling it “very strong”.
“We believe we have a product to launch this month,” Ms. Pelosi said during her weekly news conference at the Capitol.
In the seven months since Ms Pelosi first signaled her support for legislation to tighten stock trading in Congress, there have been few signs of legislative progress likely to pass the House. A number of slightly different bills have been proposed in both the House and Senate, some with bipartisan support.
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“For months, House and Senate leaders have promised action,” said Rep. Abigail Spanberger, a Virginia Democrat and the main sponsor of a bipartisan trade curb proposal by the Legislature. “It’s long past time to move forward.”
One version of a legal framework in the House of Representatives, outlined in a late August memo reviewed by The Times, would effectively ban lawmakers, their spouses and dependent children from trading in individual stocks, bonds, cryptocurrencies and other financial assets that are tied to specific companies.
Under the framework that forms the basis of current negotiations for a proposed law, congressmen would either have to divest these assets or place them in a blind trust in which they would have no visibility or interest. Legislators would still be allowed to invest in mutual funds, exchange-traded funds, and some other categories.
According to the memo, the new legislation would also require more detailed transaction disclosures for permitted investments — for example, by narrowing published value ranges of assets — and toughen penalties for those who evade or break the law.
“Congress can add some bite to these penalties, which will encourage compliance and result in harsher penalties for violations,” the memo said.
According to the memo, members of the Supreme Court would be subject to the same restrictions. So would senior congressional officials, according to a Democratic official in the House of Representatives.
Congressional leaders have faced increasing pressure in recent months to crack down on their peers’ financial activities. An ongoing investigation by website Insider that began last year has found 72 examples of lawmakers who have violated applicable laws by late, inaccurate or not filing transaction reports.
A poll conducted earlier this year showed that nearly two-thirds of respondents supported a blanket ban on members of Congress from trading in individual stocks. And with public confidence in Congress down to just 7 percent in June, many lawmakers are reluctant to ignore voters’ demands.
“Congress is mired in a crisis of institutional legitimacy, caused in part by reports by members of both parties who appear to be benefiting from their public trust,” wrote Noah Bookbinder, president of Washington nonprofit group Citizens for Responsibility and Ethics, in a letter on Wednesday calling for sweeping restrictions on trade by members of Congress.
In a separate news conference on Tuesday, other senior House Democrats signaled confidence that progress was being made on new trade restrictions.
Rep. Hakeem Jeffries of New York, leader of the House Democrats, said he expects legislation “soon” from Rep. Zoe Lofgren, the California Democrat who has commissioned Ms Pelosi to draft a bill that has broad support can.
It’s not clear if the Senate will pass legislation on the issue this year. A number of senators have been working on proposals, but none appear to have garnered the 60 votes required for passage by the Senate.
Oregon Sen. Jeff Merkley, who is working on one of the proposals, said Wednesday, “I am committed to getting the stock trading ban in Congress across the finish line. I’ve carried this fight for a decade and I will not let it die.”