House Speaker Nancy Pelosi.
Kent Nishimura / Los Angeles Times via Getty Images
- Pelosi is now on board with banning lawmakers from trading stocks, but the devil’s in the details.
- A key point of disagreement is whether to include spouses, whom ethics experts say must be included.
- Pelosi is non-committal on the idea, and Democratic senators are still working it out.
The movement to ban lawmakers from trading stocks appears to be meeting its moment.
Senate Majority Leader Chuck Schumer took to the Senate floor on Wednesday morning, putting forth the most forceful declaration in support of the idea made by any congressional leader thus far.
“This is something that the Senate should address. Hopefully we can act on it soon,” Schumer said, echoing remarks he made on Tuesday. “Hopefully it can be done in a bipartisan way.”
The New York Democrat recently convened a working group of six Democratic senators to hammer out an agreement: Sens. Jon Ossoff of Georgia, Mark Kelly of Arizona, Elizabeth Warren of Massachusetts, Sherrod Brown of Ohio, Jeff Merkley of Oregon, and Gary Peters of Michigan. All are in agreement on the basic idea of preventing lawmakers from actively trading individual stocks while serving.
What they haven’t yet agreed on — among other potential details — is whether spouses should be banned from trading as well. Members of congress and their spouses, like most other Americans, may often discuss financial decision-making and privileged information.
Merkley’s “Ban Conflicted Trading Act,” one of several proposals that have been put forward, does not currently include spouses in a ban. Merkley suggested widening the ban could put an unfair burden on spouses. That puts him at odds with some of the other senators working on the bill.
“Ideally, I’d like to see spouses covered, but we’re trying to figure out if there’s a way to do it, that’s kind of fair to the contract, if you will, between a married couple,” Merkley told Insider on Wednesday, adding that perhaps the stock trading ban could go into effect for spouses “when each [member] faces re-election.”
But Walter Shaub, the former director of the Office of Government Ethics under Presidents Barack Obama and Donald Trump, told Insider that including spouses is absolutely essential.
“If spouses are not included in the ban, there’s no point in having the ban,” he said, adding that a spouse-less stock trading ban would be “worse than meaningless because it creates the false impression that Congress has done something when they’ve done nothing at all to stop their conflict of interest problems.”
“The reason to include spouses is, you know, what’s the difference?” Sen. Kelly, who’s married to former Democratic congresswoman Gabrielle Giffords, told Insider at the Capitol on Wednesday. His and Sen. Ossoff”s “Ban Congressional Stock Trading Act” — essentially the Senate version of the TRUST in Congress Act put forth by Democratic Rep. Abigail Spanberger of Virginia and Republican Rep. Chip Roy of Texas in the House — includes spouses. “I think it’s important that we have strong legislation that doesn’t include a bunch of loopholes,” he said.
“The inclusion of spouses is absolutely essential,” Spanberger told Insider.
And Sen. Warren agrees. “Spouses and members are typically one household,” she told Insider at the Capitol shortly after introducing her own stock trading ban with Republican Sen. Steve Daines of Montana. “And that’s why Sen. Daines and I proposed treating them the same way.”
And Republican Sen. Mitt Romney of Utah, who met with Merkley on Tuesday about his legislation but has yet to formally back a proposal, told reporters on Wednesday that he believes spouses should be included.
It’s not clear that the inclusion of spouses is particularly partisan — Republican Sen. Josh Hawley of Missouri included spouses in his proposed stock trading ban, while Republican Sen. Ben Sasse did not.
And Insider’s Kimberly Leonard reports that Republicans are increasingly interested in running on the issue in the upcoming midterm elections. “Everyone running from the minority knows good government sells,” a national GOP strategist told Insider.
All of this comes on the heels of Insider’s “Conflicted Congress” project, which has found that 55 members of Congress and nearly 200 senior staffers have violated the STOCK Act, the currently insufficient legislation in place to combat insider trading.
“I’m not sure why there has to be this new effort”
Democratic Reps. Abigail Spanberger of Jennifer Wexton of Virginia at a press conference outside the Capitol on October 21, 2021. Wexton was one of several lawmakers to join Spanberger’s bill as a co-sponsor just this week.
Tom Williams/CQ-Roll Call, Inc via Getty Images
With negotiations heating up in the Senate, things continue to move more slowly on the other side of the Capitol.
House Speaker Nancy Pelosi, after initial resistance, has now come around to the idea of banning lawmakers from trading stocks but remains noncommittal on the details of what that may entail, beyond a desire to include the judiciary in any future reforms.
“I’m a big believer in our committees,” she told Insider at her Wednesday press conference, indicating little rush to get anything to the floor soon. She said the Committee on House Administration would be compiling all of the different legislative proposals and seeing what makes the most sense. “They’re listening to members about how it affects members,” she said.
“It’s complicated, and members will figure it out,” she added. “And then we’ll go forward with what the consensus is.”
But Pelosi’s latest moves were met with skepticism from Spanberger.
“I’m not sure why there has to be this new effort to review what’s possible. We’ve got a bill that, day by day, gets more and more co-sponsors, Democrats and Republicans,” she told Insider at the Capitol on Wednesday, referencing her own legislation. “I hope it’s not so that we can spend a lot of time talking about this issue without actually doing something.”
Adding to the drama over whether including spouses is Pelosi herself. While she does not own any stocks herself, her husband Paul Pelosi owns millions in stock and is a frequent trader.
“Those who are objecting [to including spouses in a ban] only have to look at the Speaker of the House to see an example of the problems that can be caused when your spouse is doing trading,” said Shaub.
But it’s not just Pelosi. While Senate Minority Leader Mitch McConnell told Insider he’ll consider a stock trading ban and declared that he owns no individual stocks, he disclosed last year that his wife — former Transportation Secretary Elaine Chao — does own and trade significant amounts of stock. And Democratic Rep. Ro Khanna of California, who backs Merkley’s bill, periodically submits nearly illegible disclosures of his wife’s frequent stock transactions.
Insider asked Pelosi about the spouse loophole at her press conference, citing Shaub as an ethics expert who’s raised this as an issue.
“Well, I don’t know who he is,” she quipped (though she called him an “independent, honest public servant” in a 2017 press release). “What matters to me is what my members think.”
Asked about the Speaker’s comments later on Wednesday, Shaub let out a loud laugh. “I’m more concerned about whether she knows why it’s bad for the spouses of members of Congress to trade stocks,” he said.
“It’s possible for us to get derailed and have no bill at all”
Democratic Sen. Jon Ossoff of Georgia speaks to reporters about the Ban Congressional Stock Trading Act outside the Capitol on February 9, 2022.
Tom Brenner/Reuters
Adding to the frenzy is a sense among some stock ban advocates that the time to act is sooner rather than later, given recent momentum.
Speaking with reporters outside the Capitol on Wednesday, Ossoff laid down something of an ultimatum: senators should submit their “notes, concerns, questions, considerations and offer any other potential legislation this week.”
“I don’t think that this needs to consume weeks and weeks and weeks of our time because it’s not that complicated,” he said, adding that his and Kelly’s bill is only a few pages long.
His comments came amid an ongoing torrent of proposals to ban lawmakers from trading stocks, with three more bills to ban lawmakers form trading stocks introduced just on Wednesday. “The more the merrier. I’ve actively encouraged my colleagues to offer their own bills,” he said.
But Merkley sounded a more cautious note.
“I just want to make sure we don’t lose sight of the core nature of every scandal we’ve had, which has been members trading on stocks while they’re writing policy,” he told Insider. “That’s an unacceptable conflict of interest.”
Asked by Insider about the inclusion of spouses, Democratic Rep. Alexandria Ocasio Cortez of New York — a co-sponsor of Merkley’s spouse-less bill — said on a press call on Thursday that she was “deeply supportive of including spouses” in the ban and that the bill’s co-sponsors were in “active conversations” about allowing floor vote amendments to that effect on their bill, should it make it to the floor.
“We want to make sure that we do that without loopholes, without exceptions,” she added.
But Ocasio-Cortez also said spouses were left out so that “we could get as much bipartisan support” as possible, though Spanberger’s bill — which does include spouses — has more Republican backers than Merkley’s bill.
“It’s an open question that we have struggled with as senators because many spouses have very, very independent lives, separate finances, so on and so forth,” Merkley told Insider at the Capitol. “And, of course, we’d be changing the rules of the road in the middle of an elected term.”
But Merkley add that he’s determined to not let the perfect be the enemy of the good.
“It’s possible for us to get derailed and have no bill at all,” he said. “We don’t want to let that happen.”
