In a conversation dating to April, the U.S. President, Donald Trump, assured he would definitely approve a legislature barring Congress members from stock trading. With plunging approval ratings and an economy in turmoil, endorsing a prohibition offers him a swift political win. The mass populace backs such a restriction, and several proposed laws have received endorsement from both Republican and Democratic members in the Congress. However, Trump’s reaction was less than supportive when one such ban progressed through a Senate committee vote last week; he instead targeted a key proponent of the bill amongst his party, Senator Josh Hawley from Missouri.
The intrigue behind such a response lies in the fact that until recent times, legislators were not held accountable for insider trading. As one can predict, inquiries showed that lawmakers used this loophole to their advantage, making profitable stock trades during the 2008 financial downturn and the healthcare debate in 2010.
To crack down on this manipulation, Congress introduced the STOCK Act in 2012. This law extended insider trading regulations to legislatures, demanding transparency into their trades within 45 days of occurrence. Yet, the law didn’t bring about the changes it set out to.
Following a 2021 examination, it came to light that several Congress members had infringed the rules of the STOCK Act. The report also highlighted that Congress members and their families persisted in investing in sectors potentially influenced by legislative committee outcomes. A revelation in 2022 further strengthened this claim.
The House Ethics Committee released a report last week, censuring Rep. Mike Kelly, for being disingenuous during the investigation into his wife’s 2020 purchase of a steel company’s shares — a company based in his district. This transaction occurred precisely one day after the Congressman was made aware of administrative intervention to support the company, a fact that hadn’t reached the public eye yet. Despite the Committee’s advice to divest their assets, Kelly dismissed the notion and asserted their exoneration.
The STOCK Act’s other stipulation of timely reporting has also been violated grossly and often, to an extent bordering on farce. A recent example being Sen. Markwayne Mullin’s disclosure of a plethora of stock and bond trades between one and a half to two and a half years post their execution.
In conclusion, the STOCK Act has fallen short in curtailing Congress members trading stocks based on insider information, a reality evident for some time now. Numerous lawmakers from varied ideological backgrounds have rallied for a comprehensive trading ban over the past few years. However, regardless of the party in control of Congress, these aspirations have yet to gain substantial momentum.
While the former Speaker initially opposed and later expressed lukewarm support to such a proposal, the current Speaker has shown a cautious backing. But, neither of them showed genuine interest in moving the legislation merits forward.
Despite the hurdles, the fight to ban insider trading continues, with unexpected support coming even from the Republican party. Rep. Anna Paulina Luna plans to submit a ‘discharge petition’ to push for a vote in the House on a proposed ban initiated by Rep. Tim Burchett.
In the Senate, post Trump’s vocalized backing of a trading ban, Hawley presented a bill to prohibit trades and enforce lawmakers to trade-off their ‘financial holdings’ prior to their subsequent term commencement. The bill incurred unanimous support from the panel’s Democratic members and managed to succeed in the Senate Homeland Security and Government Affairs Committee.
Contrary to one might expect, Trump did not laud this achievement. He instead questioned the efforts over social media, downplaying Hawley’s role by calling him a ‘second-tier Senator.’ Hawley responded, clearing the air that Trump’s resentment stemmed from a mix-up; he was under the impression that the bill’s regulations would apply to him before 2029.
If in reality, miscommunication underlies the President’s objection, resolving this issue and passing the ban could occur as quickly as a phone call. The President could select any Republican he deems fit for the credit. He could urge the Speaker and the Senate Majority Leader to prepare a bill for his approval, which they would undoubtedly endorse. That’s the standard procedure for any law approval in the current Congress.
However, this hasn’t transpired yet, with speculation rising about the President’s indifference towards the issue of lawmakers’ financial enrichment. While propositions like Hawley’s wouldn’t impact him directly, he might relish the chance to upset his political rivals. Nevertheless, the President’s decisions seem to point towards divergent priorities.
The post Trump Backs Ban on Stock Trading for Congress Members appeared first on Real News Now.
About Author
