Two dozen House and Senate lawmakers led by Democratic Sen. Jeff Merkley introduced legislation Tuesday that would ban members of Congress, their spouses, and their dependent children from trading individual stocks, reprising an effort that gained momentum last year before fizzling out ahead of the November midterms.
“Congressional stock trading is deeply corrupt,” Merkley said in a statement. “We are elected to serve the public, not our portfolios. And no member should vote on bills biased by the character of their holdings.”
The Ending Trading and Holdings in Congressional Stocks (ETHICS) Act would require lawmakers who own individual stocks, securities, commodities, or futures to divest entirely, diversify their holdings into mutual funds or other permitted assets, or place their holdings in a blind trust.
The bill also “addresses concerns about Qualified Blind Trusts not being truly blind with new, enhanced provisions requiring divestiture of assets that go into the Qualified Blind Trust,” according to Merkley’s office.
Members of Congress found to have violated the bill’s provisions would be fined an amount that is at least equal to their monthly pay.
“Lawmakers should not be able to profit off the same companies that they are regulating,” Sen. John Fetterman (D-Pa.), a Senate cosponsor, said at a press conference introducing the bill. “Lawmakers should be focused on getting results for their constituents—not lining their own pockets.”
Rep. Raja Krishnamoorthi (D-Ill.), who is leading the House version of the bill alongside Rep. Michael Cloud (R-Texas)—the only Republican co-sponsor of the new legislation—said Tuesday that “when members of Congress trade in securities while making decisions affecting their value, there is an unavoidable potential conflict of interest.”
A New York Times investigation published last September found that between 2019 and 2021, nearly 100 members of Congress reported trades in companies that “intersected with their congressional work or reported similar transactions by their spouse or a dependent child.”
“The ETHICS Act is the most comprehensive legislation ever proposed to eliminate even the possibility of these conflicts of interest and ensure public servants put their constituents first by banning members and their immediate families from owning or trading stocks,” Krishnamoorthi said Tuesday.
Efforts to bar members of Congress from trading stock stalled at the tail-end of last year even after then-House Speaker Nancy Pelosi (D-Calif.) publicly dropped her earlier opposition to a proposed ban.
Rep. Steny Hoyer (D-Md.), who was the second-ranking Democrat at the time, remained opposed to a stock trading ban throughout the year, and no proposal reached the House floor for a vote.
In the Senate, Merkley faced backlash from watchdog groups and ethics experts who accused him of slow-walking the legislation ahead of the November elections, forcing lawmakers to punt their efforts into 2023.
A number of advocacy groups, including the Project On Government Oversight (POGO) and Citizens for Responsibility and Ethics in Washington, voiced support for the ETHICS Act, calling it “long overdue.”
“The fact that members of Congress still trade stocks and other similar investment assets is an ethical travesty that fuels increasing public distrust in government,” Dylan Hedtler-Gaudette, senior government affairs manager at POGO, said in a statement. “This is why Senator Merkley and his colleagues should be applauded for their leadership in their efforts to solve this problem by introducing the ETHICS Act, the strongest and most comprehensive congressional stock trading legislation to date.”