When it comes to trading stock, members of Congress need to be protected from themselves
There’s an idea floating around Congress these days that makes so much common sense that it’s kind of amazing that it’s actually getting traction.
Two bills introduced last week in the Senate — one by Republican Josh Hawley of Missouri, the other by Democrat Jon Ossoff of Georgia — would force members of Congress to put their stock portfolios into blind trusts. That means that, while they’re in office, they wouldn’t know what stocks are being bought and sold on their behalf.
There’s a similar bill in the House that would do much the same thing.
These bills all sprouted up after a report by the Business Insider that 54 members of Congress — Democrats and Republicans alike — have violated current laws designed to limit conflicts of interest and make lawmakers’ financial moves more transparent.
There’s resistance already to pass more strict regulations. Nancy Pelosi, the Democratic speaker of the House, has come out against it. That’ll make any bill hard to pass.
But the baked-in conflict for lawmakers couldn’t be clearer. They often get classified briefings that give them advance information about things that will affect the economy. They’re not supposed to use that information for personal gain. But you can imagine that some people in that spot couldn’t help themselves.
So let’s talk about Richard Burr, the senior senator from North Carolina. In early 2020, before the public understood the dangers of COVID-19, he sat in on private discussions about it in his role as head of the Senate Intelligence Committee. In February 2020, Burr sold off $1.6 million in stocks just before COVID caused the market to crash. He also had a brief call with his brother-in-law, after which the brother-in-law sold off a bunch of HIS stock.
The Justice Department eventually decided not to pursue charges, but the Security and Exchange Commission is still investigating the trades. Burr had announced way back in 2016 that he was retiring once his term runs out this year.
The whole reason there are insider trading laws is that people with inside information can make a fortune — or keep from losing a fortune — before the general public knows what’s going on.
And the really hard part is that it’s not just the trades someone makes; it’s the trades they don’t make. I’m guessing some lawmakers have done well by using insider info to hold onto stock everybody else was dumping. But it’s hard to make a case against somebody based on what they didn’t do.
That’s why lawmakers shouldn’t be swapping stocks while in office. A blind trust would protect their money and reduce the temptation to break the law. I hope one of these bills makes it to the floor this year. I’d be curious to see how Richard Burr votes.