When we elect people to represent us in the House and the Senate, we trust them to uphold the duties of their public office and use the powers that come with their office appropriately. However, there’s a common practice that has led to legislators abusing that power for too long — allowing them to buy and sell individual stocks.
In addition to voting on legislation that directly impacts our economy, our health care, and every other facet of our lives, members of Congress are also given access to enormous amounts of inside information.
This becomes a problem and a conflict of interest when elected officials turn a profit by buying, selling, and trading their own individual stocks at opportune times based on this advanced knowledge. When non-elected officials are caught doing this, they go to jail.
Members of Congress are not allowed to use the insider information they gain as elected officials to make a profit. The best way to stop them from doing that is to make it illegal for any member of Congress to buy or sell individual stocks while they’re in office.
SELLING STOCKS BEFORE COVID-19
While this type of trading has been happening unchecked for years, it rose to national attention after reports that Republican legislators used what they learned from confidential briefings on the impending COVID-19 pandemic to sell stocks before the market crashed — all while telling the public there was nothing to fear and turning huge profits.
ProPublica reported that North Carolina Senator Richard Burr sold between $628,000 and $1.7 million worth of stock on February 13, 2020, when his committee was receiving daily briefings on the spread of COVID-19.
The stock dump came just days after he co-authored a Fox News op-ed claiming the United States was “better prepared than ever before to face emerging public health threats, like the coronavirus.”
Georgia Senator Kelly Loeffler is reported by The Washington Post to have sold stocks jointly owned with her husband — the chair of the NY Stock Exchange — worth between $1.275 million and $3.1 million in the weeks after she received a January 24, 2020 confidential briefing for senators on COVID-19.
Other reports indicate that Loeffler made 29 total stock transactions through mid-February, “all but two of which were sales. One of Loeffler’s two purchases was stock worth between $100,000 and $250,000 in Citrix, a technology company that offers teleworking software and which has seen a small bump in its stock price since Loeffler bought…” Teleworking software has of course become a vital resource in the wake of COVID-19, used by teams around the world while they work from home.
This betrayal of the public trust and gross acts of self-enrichment in the midst of a national crisis would never have occurred if members of Congress weren’t allowed to buy or sell individual stocks.
HOW CAN WE STOP THIS?
The best way we can stop this type of insider trading is by making it illegal for sitting members of Congress to trade stocks while they’re in office.
In 2018, Senator Elizabeth Warren introduced S.3357, the Anti-Corruption and Public Integrity Act. This legislation would have made it illegal for members of Congress to own or trade individual stocks. The bill was introduced after another insider trading scandal in Congress, which resulted in New York Republican Representative Chris Collins being charged with insider trading.
Senator Warren’s bill additionally sought to limit lobbyists’ influence in Washington, banning foreign lobbying entirely and stopped all lobbyists donations to candidates and members of Congress. The bill would also have banned members of Congress, former presidents and agency heads from lobbying for life.