Congressmen shouldn’t be playing on the market

If ever there was a time to try to restore confidence in the government, this is it.

And there is no better place to start than in the halls of Congress, where members are privy to a wealth of valuable information long before the public. Think about the pandemic rush, government purchases of pharmaceuticals, and new Department of Defense contracts, just to name a few possibilities.

Now House Speaker Nancy Pelosi has finally pledged to bring a compromise bill to the courtroom aimed at preventing members of Congress – and their close family members – from negotiating individual actions while in office. The bill, crafted from a number of proposals that emerged during the year, could also extend the ban on stock trading to include high-ranking Congressional staff members who, after all, are also aware of the same level of inside information.

Pelosi’s commitment to action in the House on the bill before the end of the month comes in the wake of a New York Times report that found that at least 97 members of Congress or their close family members (usually spouses) were trading in stocks or commodities closely related to legislators’ commission posts. So close, in fact, to risk a conflict of interest.

Now, actual insider trading is prohibited by the STOCK (Stop Trading on Congressional Knowledge) Act of 2012, which was supposed to prohibit members and employees of Congress from using “any non-public information derived from the position of the individual … or obtained from the fulfillment of the duties of the individual, for personal benefit “.

But proving it was a complicated business.

Under the disclosure provisions of that previous law, we know that Senator Richard Burr, then chair of the Senate Intelligence Committee, before the pandemic actually hit the United States, dumped stocks up to $ 1.7 million. before the market took a colossal blow. The North Carolina Republican privately told a group of voters meeting in Washington on February 13, 2020, that the incoming health threat “is more aggressive in its transmission than anything we’ve seen in recent history.”

A Justice Department investigation cleared him of insider trading charges in January 2021.

The Times report found two members of the Massachusetts delegation among those negotiating shares with potential conflicts. Rep. Katherine Clark’s husband, the fourth highest-ranking Democrat in the House, the Times reported, made a series of stock exchanges involving health care companies, including two purchases of Hologic stock in late 2020 about a week before the company was assigned. a $ 119 million COVID-19 testing contract with the departments of health and human services and defense. The shares were sold several days after the contract was announced. Clark’s office said neither she nor her husband negotiate their retirement accounts directly and that she supports a Congressional ban.

Representative Bill Keating, a member of the House Armed Services Commission, reported trading between $ 22,000 and $ 155,000 in stocks and bonds of companies that have contracted with the military. Keating says the choices were made by an investment firm and that he too is in favor of a stock trading ban.

The form of the current legislation is still a work in progress, currently the subject of a negotiation led by the chairman of the California House Administrative Committee Zoe Lofgren.

But a previous bipartisan framework sets the stage for a ban on stock trading and provisions for lawmakers to divest or entrust their holdings to a blind trust. It would allow those who are hedged to “diversify such investments by placing them in widely held and diversified or exchange-traded mutual funds, or US Treasury bills, banknotes or bonds.”

It also calls for better enforcement mechanisms and “sufficient sanctions to ensure member compliance”.

“With members of Congress on both sides violating basic financial conflict of interest laws and appearing to personally profit from their positions of public trust, Americans understandably wonder if their government works on their behalf,” they wrote. Citizens for Responsibility and Ethics in Washington in a letter to lawmakers last week urging the passage of something resembling the “framework” proposal.

The Chamber has clearly got the message. The Senate, however, is working at a somewhat calmer pace. Senator Jeff Merkley of Oregon, a supporter of a stock market ban, said last week that he did not expect any action until after the midterm election. Senator Elizabeth Warren, who tabled a stock trading ban bill last February alongside Republican colleagues Steve Daines of Montana and Marsha Blackburn of Tennessee, told the Globe’s editorial board that she is still looking for more supporters. of the GOP.

“Every day we postpone the approval of significant restrictions on stock trading among members of Congress is a day that further erodes the credibility of this body,” he told Business Insider.

Public confidence in Congress – also a cellar dweller in Gallup polls – hit a new low this summer, falling from its already dire 12% in 2021 to 7% this year.

Whether congressmen are guilty of actual or suspected conflicts is almost out of the question. The question has become to restore public confidence in a branch of government that desperately needs to face its own demons and emerge from the Washington swamp.


The editorials represent the views of the Boston Globe Editorial Board. Follow us on Twitter at @GlobeOpinion.

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