A bipartisan Senate bill introduced Wednesday would ban stock trading and individual stock ownership by members of Congress, executive branch officials and their families.
The measure, led by Sens. Kirsten Gillibrand, D-N.Y., and Josh Hawley, R-Mo., is the latest of several seeking to ban or limit stock trading by members as public scrutiny of the practice increases. Gillibrand called the bill “the most substantive bipartisan effort to date,” and vowed to work hard alongside Hawley to get it signed into law.
“Sunlight is the best disinfectant,” she said in a statement. “It is critical that the American people know that their elected leaders are putting the public first — not looking for ways to line their own pockets.”
The bill would ban stock trading or ownership, even in a blind trust, and impose stiff penalties on executive branch officials who trade stock. It would require reporting of officials’ federal benefits — including loans, agreements, contracts, grants and payments — and would create public, searchable databases of personal financial disclosure reports and filings as required by the STOCK Act, the 2012 federal law that forbids members from trading on nonpublic, material information they receive as part of their jobs.
It would increase the penalty for failing to file STOCK Act reports from $200 to $500 and impose fines of at least 10 percent of the value of prohibited investments for members of Congress who violate the ban.
The bill is at least the third introduced this year in the Senate to ban or limit stock trading by members, with Hawley leading the way. The Missouri Republican in January reintroduced a measure that would prohibit members of Congress and their spouses from holding or trading individual stocks. In March, he introduced a separate proposal that would ban executive branch officials from stock trading.
“Politicians and civil servants shouldn’t spend their time day-trading and trying to make a profit at the expense of the American public, but that’s exactly what so many are doing,” Hawley said Wednesday in a statement.
Sen. Jeff Merkley, D-Ore., in April led a group senators in introducing a bill that would bar members, their spouses and dependent children from owning or trading individual stocks, securities, commodities or futures. That bill now has 21 cosponsors, including Gillibrand, but no Republican supporters.
At least six similar measures have been introduced in the House.
A bipartisan House group in May called on the House Administration Committee to mark up stock ban legislation before the August recess. To date, no markup has been scheduled. Committee Chairman Bryan Steil, R-Wis., could not immediately be reached for comment Wednesday, though he has expressed interest in the idea.
“I’m really excited about this topic,” Steil said at a March House Administration “Member Day” hearing, where several lawmakers raised the issue. “I think one of the big concerns is the appearance of impropriety that exists among the American public.”
The latest proposal’s introduction coincided with release Wednesday of a poll on various stock trading bans conducted by the Program for Public Consultation at the University of Maryland School of Public Policy.
Of the 2,625 registered voters surveyed, 86 percent favored legislation that would prohibit members of Congress and family members residing with them from trading individual stocks. There was no partisan divide on the issue, with 87 percent of Republicans and 88 percent of Democrats agreeing.
As for a prohibition on all federal employees trading individual stocks, the survey showed a dropoff in support, with 40 percent in favor, including 42 percent of Republicans and 37 percent of Democrats.
The proposal from Gillibrand and Hawley would apply to all members of Congress and their families, as well as the president, vice president, senior executive branch members and their spouses and dependents.
“My bill with Senator Gillibrand is common sense: ban elected and executive branch officials from trading or holding stocks, and put the American public first,” Hawley said in his statement.