Savannah Hulsey Pointer, FISM News
Sen. Josh Hawley (R-MO) plans to introduce a bill that would block lawmakers and their spouses from trading stocks while in office. According to a report in The Hill, Hawley announced details about the bill on Wednesday, dubbing it the Banning Insider Trading in Congress Act as reports of unusual gains raise questions
Included in the bill are clauses that ban lawmakers and their spouses from maintaining stock holdings or making new transactions while in office. Additionally, it blocks members of Congress and their spouses from holding, buying, or selling stocks or equivalent economic interests. However, investments in mutual funds, exchange-traded funds or U.S. Treasury bonds would be allowed under the rule.
“Year after year, politicians somehow manage to outperform the market, buying and selling millions in stocks of companies they’re supposed to be regulating,” Hawley said in the announcement of his bill. “Wall Street and Big Tech work hand-in-hand with elected officials to enrich each other at the expense of the country. Here’s something we can do: ban all members of Congress from trading stocks and force those who do to pay their proceeds back to the American people. It’s time to stop turning a blind eye to Washington profiteering.”
The “blind eye” and “profiteering” that Hawley was referencing was the result of some particularly good returns on their investments by members of Congress who sold close to $290 million in stocks, $140 million in options contracts, $124 million in other securities like private equity funds, and $500k in cryptocurrencies during 2021 according to Breitbart News.
The publication outlined that members of both houses of Congress saw higher than average returns with 35 members of Congress gaining on their personal portfolios and beating national averages for returns. Of the 35 lawmakers, 16 were Republicans, and 19 were Democrats.
Reps. Dan Crenshaw(R-TX), Nancy Pelosi (D-CA), Ron Wyden (D-OR), Sens. Mitch McConnell (R-KY), and Tommy Tuberville (R-AL) are some of the most well-known lawmakers who engaged in trading from Capitol Hill.
Breitbart also reported on some “unusual trades” reported by watchdog agencies, including Rep. Brian Mast (R-FL) who bought Tilray stock, a marijuana company, before voting for a marijuana-related bill. The lawmaker later sold the same stock at a return of +563 percent.
The Florida Republican isn’t alone in his dealings, however. Several other members of Congress have made similar trades, notably, Rep. Kevin Hern (R-OK), a member of the House Budget Committee, buying $100K in $LMT stock just two weeks before the news got out that the company won a $10.9 billion contract with the federal government. Rep. Kathy Manning (D-NC), a House Foreign Affairs Committee member got in on the action as well, buying up to $30,000 in Lockheed stock just before news of the multibillion-dollar contract.
However, some of the biggest trades came from Rep. Suzan DelBene’s (D-WA) who sold $25 million in Microsoft stock in September and October and Sen. Bill Hagerty (R-TN) who sold off $5 million in tech company Datadog’s stock.
According to Hawley, his act would not just keep members of Congress from buying and maintaining stocks with six months to place their holdings into a blind trust for the remainder of their time in office. Congress and their spouses would also be required to forfeit any investment profits to the American people via the U.S. Treasury if they are found to be in violation of the Act. If there are any violations of the act, those members of Congress would lose their ability to deduct those losses on their income tax.
Should the bill be passed, the Government Accountability Office will conduct an audit of Members’ compliance with the Act.