Lawmakers furious at Democratic leaders after stock trading ban stalls
by Tobias Burns and Karl Evers-Hillstrom - 09/30/22 3:17 PM ET
Anger is boiling over at House Democratic leadership for failing to deliver on a bill to ban members of Congress from trading stocks — a key priority for voters on both sides of the aisle — ahead of the midterm elections.
Democratic leaders unveiled draft legislation to tackle the issue Tuesday, just days before Congress was set to leave for an extended recess. That left lawmakers little time to review the bill or offer changes, such as closing loopholes that critics say make the bill toothless, dooming its chances of a floor vote.
Rep. Abigail Spanberger (D-Va.) on Friday issued a scathing statement, accusing Democratic leaders of slow-walking her own stock trading proposal — introduced two years ago with bipartisan backing — and ultimately offering a more complicated bill that was designed to fail.
“This moment marks a failure of House leadership — and it’s yet another example of why I believe that the Democratic Party needs new leaders in the halls of Capitol Hill, as I have long made known,” Spanberger said in her statement.
Speaker Nancy Pelosi (D-Calif.) told reporters Friday that the bill didn’t come to the floor because it didn’t have the votes to pass.
The delay is a momentous setback for the stock trading reform effort, which drew a rare confluence of support from an overwhelming majority of Republican and Democratic voters.
Public scrutiny of lawmakers’ trades intensified when Sen. Richard Burr (R-N.C.) unloaded much of his portfolio after attending a private briefing on the devastating impacts of COVID-19 at the start of the pandemic. Pelosi, whose husband is a prolific trader, also drew backlash when she said she wouldn’t support a ban on stock trading in Congress, a position she later reversed.
“Passing a stock trading bill before the midterms would have been a good faith sign to the voters that Congress takes its responsibility to the public interest seriously,” said Danielle Caputo, an ethics lawyer at the Campaign Legal Center. “And so obviously, that’s disappointing.”
The Combatting Financial Conflicts of Interests in Government Act, spearheaded by Rep. Zoe Lofgren (D-Calif.) at the request of Pelosi, aims to prevent insider trading among members of Congress, federal government officials and Supreme Court justices.
The bill is meant to stop insider trading by making officials put any stocks they own into what’s called a blind trust, whereby the stocks are handed over to a third party that manages them without their owner’s knowledge.
But critics of the bill say that it contains a loophole that allows officials to get out of this requirement.
“The problem is that the bill allows people to create a trust that they can claim is blind and diversified, and yet it doesn’t actually have to meet the criteria that are currently in the law for it to officially be a blind trust,” said Dylan Hedtler-Gaudette, an advocate with The Project on Government Oversight (POGO), a nonprofit watchdog organization.
Congressional ethics committees, notorious for failing to hold lawmakers accountable for violating existing ethics rules, would sign off on the blind trusts under the proposal.
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https://thehill.com/blogs/blog-briefing-room/news/3669259-lawmakers-furious-at-pelosi-after-stock-trading-ban-stalls/
