Sen. Josh Hawley (R-Mo.) reintroduced legislation now named the Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act which will prohibit members of Congress and their spouses from trading and owning stocks, profiting from their positions while in office.
The name of the act is a not-so-subtle jab at former House Speaker Nancy Pelosi whose husband Paul Pelosi bought $5 million in semiconductor chip stocks just days ahead of a House vote giving $52 billion to semiconductor producers, according to the Daily Mail. He sold the shares at a loss to avoid “misinformation” or the appearance of impropriety.
The act gives members and their spouses six months after taking office to divest any holdings or put them in a blind trust. Mutual funds, exchange-traded funds, and Treasury bonds would still be permitted. Any members of Congress found in violation of the legislation would have to “return their profits to American taxpayers.” Two years following the passage of the bill, the Government Accountability Office (GAO) would conduct an audit of members’ compliance.
“Members of Congress and their spouses shouldn’t be using their position to get rich on the stock market – today I’m introducing legislation to BAN stock trading & ownership by members of Congress. I call it the PELOSI Act,” Hawley tweeted while announcing the bill.
Members of Congress and their spouses shouldn’t be using their position to get rich on the stock market – today l’m introducing legislation to BAN stock trading & ownership by members of Congress. I call it the PELOSI Act pic.twitter.com/aIXNwSnTvW
— Josh Hawley (@HawleyMO) January 24, 2023
“For too long, politicians in Washington have taken advantage of the economic system they write the rules for, turning profits for themselves at the expense of the American people,” Hawley wrote on his website.
“As members of Congress, both Senators and Representatives are tasked with providing oversight of the same companies they invest in, yet they continually buy and sell stocks, outperforming the market time and again,” he noted. “While Wall Street and Big Tech work hand-in-hand with elected officials to enrich each other, hardworking Americans pay the price. The solution is clear: we must immediately and permanently ban all members of Congress from trading stocks.”
While he was at it, Hawley also introduced a bill that would ban TikTok nationwide because it is a national security issue and a threat to American children.
.@tiktok_us is China’s backdoor into Americans’ lives. It threatens our children’s privacy as well as their mental health. Last month Congress banned it on all government devices. Now I will introduce legislation to ban it nationwide
— Josh Hawley (@HawleyMO) January 24, 2023
The PELOSI Act was introduced to Congress by Hawley previously as the Banning Insider Trading in Congress Act.
Nancy Pelosi and her husband are worth an estimated $46 million. Paul Pelosi is a prolific stock trader.
She has long insisted that she doesn’t discuss stocks with her husband. But that doesn’t mean that Paul Pelosi isn’t frequently present when Pelosi conducts business by phone.
The banning of congressional stock trading has bipartisan support. Rep. Alexandria Ocasio-Cortez has also pushed the issue. A number of bills have been introduced in the House and Senate seeking to end the practice.
It is absolutely ludicrous that members of Congress can hold and trade individual stock while in office.
The access and influence we have should be exercised for the public interest, not our profit. It shouldn’t be legal for us to trade individual stock with the info we have. https://t.co/Z3UZej2eC2
— Alexandria Ocasio-Cortez (@AOC) December 8, 2021
The New York Times reported in September that almost 100 House members bought or sold financial assets that were connected with the work of the committees they sit on. Many Americans voiced support for the ban following that revelation.
According to the Daily Mail, “Of the 435 House members, 183 traded stocks through themselves or their immediate family members from 2019 to 2021. At least 97 bought or sold stocks, bonds, or other financial assets through themselves or their spouses that directly intersected with their congressional work.”
The trades were evenly split across the political aisle, involving 49 Republicans and 48 Democrats.
Under pressure, in September Pelosi backed a bill to ban congressional stock trades. Some of her critics claimed it didn’t go far enough. The legislation wound up stalling and dying in Congress.
Beginning in 2012, Congress members have been subject to the STOCK Act which requires they report stock transactions of $1,000 or more by themselves or their family members within 45 days of it taking place. Members of Congress are also ostensibly restricted by insider trading laws.
Hawley’s bill amends the Ethics in Government Act of 1978, which prohibits using nonpublic information for private profit, commonly known as insider trading.
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