McCormick is 'hopeful' that Congress will adopt ethics measures

A progressive New Jersey Democrat says she is hopeful that real action will result from Insider's "Conflicted Congress" report, which found 57 members of Congress and at least 182 senior-level congressional staffers had violated federal conflict of interest laws by failing to properly report stock trades.

New Jersey's leading progressive champion Lisa McCormick applauded Representatives Pramila Jayapal (WA-07) and Matt Rosendale (MT-AL) and Senators Elizabeth Warren (D-MA) Steve Daines (R-MT) Marsha Blackburn (R-TN) and Debbie Stabenow (D-MN) for introducing bipartisan legislation to ban members of Congress and their spouses from owning and trading stocks.

"Americans across the political spectrum have had it with Capitol Hill’s stock trading scandals and self-dealing," said McCormick. "Our bitterly divided Congress has been steadfastly united in its willingness to dodge ethics rules that might hinder greedy misconduct or avoid enacting meaningful legislation to curb the influence of dirty money in politics."

McCormick also praised Sens. Jon Ossoff (D-Ga.) and Mark Kelly (D-Ariz.), who introduced a similar proposal, known as the Ban Congressional Stock Trading Act.

"The last time an outraged public demanded reform, Congress passed the toothless Stop Trading on Congressional Knowledge Act, or Stock Act, which instead of prohibiting members from trading stocks or eliminating opportunities for insider trading, all it did was shorten the deadline for disclosure," said McCormick, who noted that her own representative, Congressman Tom Malinowski, violated that law at least 145 times.

“Members of Congress were elected to serve the people, not their personal financial interests. But as long as members and spouses are allowed to hold and trade stocks, we keep the door open to corruption—and that cannot stand,” said Jayapal, chair of the Congressional Progressive Caucus.. “It’s good policy, and it’s simply the right thing to do.”

“Banning insider trading by members of Congress is a critical step to restoring public confidence in our institutions and ensuring the interests of the American people come before personal financial gain,” said Rosendale. “It’s unacceptable that so many career politicians abuse their office to enrich themselves. Public servants must be held to a higher standard and our bill will help prevent such conflicts of interest.”

“No one should ever have to wonder whether their Member of Congress is working for the public interest or their own financial interest,” said Warren. “I’ve fought for years to root out corruption in Washington, and to ban federal officials from owning and trading individual stocks.”

“Congress is here to serve, not be served. The American people should have faith in that fact,” Daines said. “Members shouldn’t be able to make legislative decisions or use their platform and influence to benefit themselves personally, which is why it should be no question that owning and trading stocks should be banned.”

“Washington has lost the trust of the American people. Allowing members of Congress to trade individual stocks can create the perception of corruption and a conflict of interest. I’m glad to join my colleagues in introducing this bipartisan legislation to help restore Americans’ trust in democracy,” said Blackburn.

“There is an inherent conflict of interest for Members of Congress who have access to information impacting the stock market that is not available to the general public. Legislators have access to information and create laws that can impact entire industries. These actions can have a significant influence on stock prices. This legislation will prevent potential conflicts of interest and strengthen public trust in our government,” said Stabenow.

In important respects, the Bipartisan Ban on Congressional Stock Ownership Act goes beyond current proposals to ban stock trading, and additionally bans the ownership of individual stocks.

Specifically, the legislation:

• Bans Members of Congress and their spouses from owning and trading individual stocks, bonds, commodities, futures, and other securities including an interest in a hedge fund, a derivative, an option or other complex investment vehicle. It does not ban common, widely held funds, such as mutual funds and ETFs, as long as those funds do not present a conflict of interest and are diversified.
• Allows a transition period for lawmakers to divest their holdings and come into compliance, including a similar period for newly elected Members starting when they’re sworn in.
• Establishes a civil penalty of up to $50,000 for each violation. The Department of Justice and the U.S. Office of Special Counsel would enforce the law.
• Includes a provision that allows deferral of taxation of gains on investments that Members of Congress and their spouses are forced to divest.

McCormick said the legislation is endorsed by the Project On Government Oversight (POGO), the Campaign Legal Center, Citizens for Responsibility and Ethics in Washington (CREW), Fix the Court, FreedomWorks, Government Accountability Project, Issue One, National Center for Health Research, National Taxpayers Union, Progressive Change Campaign Committee, Public Citizen, Taxpayers for Common Sense, The Digital Democracy Project, and Transparency International — U.S. Office.

“Congress has for a long time failed to hold itself to the kinds of high ethical standards that the American people expect and deserve,” said POGO Executive Director Danielle Brian. “Capitalizing on their privileged positions and their access to nonpublic information through inappropriate stock trading is one glaring example of this problem. Recent examples of real or potential insider trading by members of Congress and their spouses as well as reports of violations of disclosure laws meant to crack down on this behavior have made this issue even more pressing than usual.”

“The appearance of financial conflicts of interest reduces faith in our democracy at a time when it is so important that Americans rally around the democracy–and members of Congress owning and trading individual stocks only exacerbates this crisis of confidence,” said Noah Bookbinder, president of Citizens for Responsibility and Ethics in Washington. “These conflicts of interest don’t just happen when members trade on private information; they also happen when members legislate on issues that impact their own stock holdings. The Bipartisan Ban on Congressional Stock Ownership Act would prevent both types of conflicts by prohibiting members from owning individual stocks entirely.”

"Americans shouldn’t have to wonder if our representatives are making decisions based on their own profits, or the best interests of their constituents," said McCormick. "It’s time to pass a strong ban on congressional stock trading and ownership."