A Republican in the U.S. Senate is looking to prevent lawmakers and their spouses from trading stocks on which the officials would have privileged information and used the bill’s title to make a not-so-subtle dig at former House Speaker Nancy Pelosi.
On Tuesday, Sen. Josh Hawley, R-MS, introduced the PELOSI Act, officially the Preventing Elected Leaders from Owning Securities and Investments Act, requiring members and their spouses to divest any holdings or put them in a blind trust within six months of entering office.
“Members of Congress and their spouses shouldn’t be using their position to get rich on the stock market – today l’m introducing legislation to BAN stock trading & ownership by members of Congress. I call it the PELOSI Act,” he wrote on Twitter Tuesday.
The bill comes after revelations last year that Nancy’s husband, Paul Pelosi, traded between $1 million and $5 million of stocks for semiconductors just days before Congress allocated $52 million to the industry. The stocks were later sold at a loss to remove the appearance of impropriety.
Other lawmakers and their spouses have made similarly advantageous trades, including Sen. Richard Burr, R-N.C., who sold investments after receiving classified briefings on the coronavirus pandemic.
Hawley’s bill excludes mutual funds, exchange-traded funds and Treasury bonds purchases.
Hawley’s bill would require any profits made by a lawmaker to be returned to American taxpayers.
It also specifically amends the Ethics in Government Act of 1978, which prohibits using nonpublic information for private profit, commonly known as insider trading — which is already illegal for business leaders and everyday Americans.
The bill currently requires the President of the United States, the vice president, specific executive branch employees, the Postmaster General, some civilian employees, certain members of Congress, and judicial officers to file a report that includes the source, type, and value of income gained from any source other than their current employment.
This bill was previously amended in 2012, when Rep. Louise McIntosh Slaughter, D-NY, and Sen. Joe Lieberman, ID-CT, introduced the “Stop Trading on Congressional Knowledge Act” or the “STOCK Act” to help eliminate congressional insider trading.
The legislation, which was signed into law, prohibits lawmakers and employees from utilizing information gained through legislative meetings to profit privately. The act also says lawmakers are not exempt from insider trading prohibitions under securities laws.
It requires congressional lawmakers to report any stock transactions by themselves or their family members of $1,000 or more within 45 days.
The push to prevent lawmakers from privately profiting through their public office has bipartisan support, and Hawley, and others on both sides of the proverbial aisle have initiated legislative action to outlaw such action.
Earlier this year, Hawley introduced a bill that would ban lawmakers from making stock trades while in office. Sens. Jon Ossoff, D-Ga., and Mark Kelly, D-Ariz., introduced similar legislation.
Earlier this month, Reps. Chip Roy, R-TX, and Abigail Spanberger, D-Va., reintroduced a bill that would ban lawmakers and their family members from trading individual stocks or using their public office for “political gain.”
The TRUST Act, formally the Transparent Representation Upholding Service and Trust in Congress Act, would require lawmakers and family members to transfer specific investments into a qualified blind trust while serving in Washington.
“Strengthening our democracy and building true resilience against corruption is not just about preventing unethical decisions, but it is also about addressing the feeling among many Americans that their elected officials and government don’t work for them. This perception is damaging to our democracy, and the TRUST in Congress Act would help build trust and assure the public that Members of Congress are not serving their own financial interests,” Spanberger said at the time.
She also said the bill would create a “firewall between Members of Congress and their investments.”
Original cosponsors of the bill include Reps Scott Perry, R-Penn., Matt Gaetz, R-Fla., Jerry Nadler, D-NY, Adam Schiff, D-Calif., Dusty Johnson, R-SD, Nikema Williams, D-GA, Dean Phillips, D-Minn., Chellie Pingree, D-Maine, Angie Craig, D-Minn., Mary Gay Scanlon, D-Penn., Brian Fitzpatrick, R-Penn., Pete Sessions, R-Texas, Grace Meng, D-NY and Joe Courtney, D-CT and more.