In the trenches of TikTok, users are tracking more than just the latest memes or trends. They’re watching the stock trades of members of Congress and their families, with House Speaker Nancy Pelosi being a fan favorite.
The STOCK Act requires members to publicly disclose their and their spouses stock transactions, which has allowed accounts like CEOWatchlist to use that information to monitor Pelosi’s husband’s trades for more than 1 million followers, calling her the stock market’s biggest “whale” and ending videos with credos like “shout out to Nancy for the stock tips.”
If Pelosi has her way, those trades will continue, telling reporters last month that members should have the right to participate in the “free-market economy” like everyone else.
But after a series of scandals and ethically problematic trades, a growing coalition of lawmakers on the left and the right want to ban the practice to prevent the perception, if not actual abuse of their positions.
The most recent calls for change came from Minority Leader Kevin McCarthy (R-CA), who told Punchbowl News in an interview published Tuesday he’d consider banning trades if Republicans took over the House next year. While House Democratic leadership dismissed McCarthy as insincere at best, the idea is gaining steam.
Virginia Democrat Rep. Abigail Spanberger has twice sponsored legislation with Rep. Chip Roy (R-TX) that would bar members of Congress from trading stocks and equities while in office. She doesn’t believe there’s rampant insider trading among her fellow members of Congress, but she does believe there’s a “perception” among Americans that members would do so.
To her, that’s a problem.
“We may believe as members that everyone is doing the right thing and everyone is behaving admirably,” Spanberger said. “But I think it is important that we go a step beyond that, which is [to] demonstrate to the American people that we’re not even going to give the illusion of doing something inappropriate.”
“I think she’s wrong on this. I think she is out of step with public opinion,” Spanberger (D-VA) told The Daily Beast, when asked about Pelosi’s position.
Roy told The Daily Beast he thinks Pelosi’s position is “mind-boggling.”
Pelosi spokesperson Drew Hammill said the speaker herself fully cooperates with required disclosures and does not personally own any stocks, with all belonging to her husband, Paul Pelosi. She has no prior knowledge of or involvement in those transactions, he added.
But the arm’s-length justification of a spouse doesn’t suffice for some members—including those in Pelosi’s own caucus.
“Spouses is pretty much like the member trading. So you know, I have some concerns about that,” Rep. Jamaal Bowman (D-NY) told reporters on Tuesday. “Same thing with staffers as well, right? We are all privy to this information and what’s happening in a variety of sectors that operate on Wall Street. So I have concerns about all of the above.”
An investigation by Insider found 182 high-ranking congressional staffers as having violated the STOCK Act between January 2020 to mid-September 2021.
In the Senate, Sen. Jon Ossoff (D-GA) is reportedly looking to introduce a bill to ban members of Congress and their families from trading stock while members are in office. Ossoff, who defeated former Sen. David Perdue (R) who was embroiled in scandal due to his stock trades during his re-election campaign, put his assets in a blind trust once elected to office in 2021.
A blind trust transfers management of a person’s assets to designated trustees. The asset-owner will have no say in or knowledge of how their assets are being managed for the duration of the agreement.
Sen. Elizabeth Warren (D-MA) has long been a proponent of limiting trading by members, even going so far as extending limitations to federal judges and agency heads. When asked by The Daily Beast if Pelosi is out of step on the issue, Warren said, “Public interest is about serving the public. Not about increasing your own individual wealth.”
Republican Sen. Josh Hawley on Tuesday responded to McCarthy’s proposal with a tweet simply saying “good idea.”
Some Democratic senators aren’t as ready to commit, but signaled there’s room for discussion.
Sen. John Hickenlooper (D-CO) said he’d want to look deeper at a proposal to put members’ assets in a blind trust, but he doesn’t think “it’s a horrible thing to, you know, try and figure out a way to make things transparent.”
Sen. Cory Booker (D-NJ) told The Daily Beast, “We should not be doing things that have an obvious conflict of interest. So, I haven’t analyzed the policy specifically, but I have a lot of concerns about the status quo.”
The renewed hubbub over members’ stock trades comes almost two years after Sens. Richard Burr (R-NC), Dianne Feinstein (D-CA), James Inhoffe (R-OK) and former Sen. Kelly Loeffler (R-GA) came under investigation for their major stock selloffs at the beginning of the coronavirus pandemic.
The senators were all privy to private information on the potential economic fallout of the pandemic, while the public still had limited information on what COVID had in store.
Multiple members of Congress addressed concerns for the future about new bans on trading potentially limiting what sorts of folks would be willing to run for office. Spanberger said, “If that’s a limiting factor for some people who might choose to run for office, I’m okay with that.”
Roy insisted “if you’ve got so many assets, you’ve got 20 million bucks, you can afford a money manager—institutional investor type— to come in and say, ‘I’m going to manage your funds.’”
Hickenlooper said the potential for folks to avoid public service over their market interests is something to factor in.
“You might miss some people who might choose not to serve in the Senate and that might be a loss. We should consider that…” he said, insisting Congress benefits from members with a “cross-section” of backgrounds, including those who’ve dabbled in business.
“But we don’t want to have a system where anybody suspects that an elected official has an unfair advantage in how their property—what they own—is gonna grow,” he said.