A New York Times analysis found that between 2019 and 2021, 97 senators and representatives or their family members bought or sold stocks or other financial assets in industries that could be affected by their legislative committee work, violating a law designed to prevent insider trading and stop conflicts of interest.
Over the three -year period, more than 3,700 trades posed potential conflicts between lawmakers’ public responsibilities and private finances.
For example, 15 lawmakers tasked with shaping US defense policy actively invested in military contractors. Still further, Senators, House members, and top Capitol Hill staffers who will help decide whether the government regulates cryptocurrency are themselves invested in bitcoins and altcoins.
All this while ordinary Americans are losing their shirts, if not their entire wardrobes, dealing with the pandemic and the rising cost of living while lawmakers ae making hay. Sure, consumers may be getting some relief at the gas pump, but they are having to dig even deeper to pay for groceries.
The price of eggs is up about 40 percent since this time last year. They are paying 20 percent more for milk, bread, and a staple in many Americans’ diet—chicken. Many of these working-class individuals risked their lives on the frontline of the COVID-19 crisis to stock grocery shelves, work in hospitals, or deliver food to homes, among other things.
To prevent members of Congress from taking advantage of their positions for personal gain, the U.S. passed the Stop Trading on Congressional Knowledge Act, known as the STOCK Act, signed into law in April 2012, an election year. At a highly visible signing ceremony, it was said that the legislation would address the “deficit of trust” that divides Washington and the rest of America.
The STOCK Act prohibits members of Congress and senior executive and legislative branch officials from trading based on knowledge obtained as a result of their jobs. It increased transparency by beefing up financial disclosure requirements on stock trades and posting the annual financial disclosure forms federal officials file on a publicly available online database. A key provision of the law mandates that lawmakers publicly and quickly disclose any stock trades made by themselves, a spouse, or a dependent child.
But transparency only works if people abide by the rules. Congress and top senior Capitol Hill staff have violated the STOCK Act hundreds of times, but they face minimal penalties that are inconsistently applied and not recorded publicly. If they file their disclosure more than 30 days after it’s due, they have to pay a fee this being the U.S. Congress of no more than $200. And Congress has the discretion to waive the fines stipulated in the law.
Is it any wonder that the average American does not understand why elected officials do not play by the same rules as everyone else? The hard truth is that the American people simply do not trust the federal government. Only two-in-ten Americans trust leaders in Washington to do what is right, according to the Pew Research Center.
There are a variety of rare bipartisan proposals floating around the House and the Senate to tighten the rules on stock trading, and key details still need to be ironed out. The only way lawmakers can earn back trust is to hold themselves to a higher standard, starting with an outright ban on the trading of stocks and other financial assets such as cryptocurrencies by members of Congress, their immediate family members and senior congressional staff.
Members of Congress should spend their time working for the American people. But persuading them to start putting the public ahead of their personal financial interests is like asking them to perform surgery on themselves. And you can take that to the bank.