In article <uhqp8l$11821$3@dont-email.me>
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Anger is boiling over at House Democratic leadership for failing to
deliver on a bill to ban members of Congress from trading stocks — a
key priority for voters on both sides of the aisle — ahead of the
midterm elections.

Democratic leaders unveiled draft legislation to tackle the issue
Tuesday, just days before Congress was set to leave for an extended
recess. That left lawmakers little time to review the bill or offer
changes, such as closing loopholes that critics say make the bill
toothless, dooming its chances of a floor vote.

Rep. Abigail Spanberger (D-Va.) on Friday issued a scathing
statement, accusing Democratic leaders of slow-walking her own stock
trading proposal — introduced two years ago with bipartisan backing
— and ultimately offering a more complicated bill that was designed
to fail.

“This moment marks a failure of House leadership — and it’s yet
another example of why I believe that the Democratic Party needs new
leaders in the halls of Capitol Hill, as I have long made known,”
Spanberger said in her statement.

Speaker Nancy Pelosi (D-Calif.) told reporters Friday that the bill
didn’t come to the floor because it didn’t have the votes to pass.

The delay is a momentous setback for the stock trading reform
effort, which drew a rare confluence of support from an overwhelming
majority of Republican and Democratic voters.

Public scrutiny of lawmakers’ trades intensified when Sen. Richard
Burr (R-N.C.) unloaded much of his portfolio after attending a
private briefing on the devastating impacts of COVID-19 at the start
of the pandemic. Pelosi, whose husband is a prolific trader, also
drew backlash when she said she wouldn’t support a ban on stock
trading in Congress, a position she later reversed.

“Passing a stock trading bill before the midterms would have been a
good faith sign to the voters that Congress takes its responsibility
to the public interest seriously,” said Danielle Caputo, an ethics
lawyer at the Campaign Legal Center. “And so obviously, that’s
disappointing.”

The Combatting Financial Conflicts of Interests in Government Act,
spearheaded by Rep. Zoe Lofgren (D-Calif.) at the request of Pelosi,
aims to prevent insider trading among members of Congress, federal
government officials and Supreme Court justices.

The bill is meant to stop insider trading by making officials put
any stocks they own into what’s called a blind trust, whereby the
stocks are handed over to a third party that manages them without
their owner’s knowledge.

But critics of the bill say that it contains a loophole that allows
officials to get out of this requirement.

“The problem is that the bill allows people to create a trust that
they can claim is blind and diversified, and yet it doesn’t actually
have to meet the criteria that are currently in the law for it to
officially be a blind trust,” said Dylan Hedtler-Gaudette, an
advocate with The Project on Government Oversight (POGO), a
nonprofit watchdog organization.

Congressional ethics committees, notorious for failing to hold
lawmakers accountable for violating existing ethics rules, would
sign off on the blind trusts under the proposal.

“It’s basically a fake blind trust,” he said. “We don’t have that
much trust in what the ethics committee is going to do because
they’re notoriously weak in doing anything that’s particularly
restrictive or robust around what happens internally.”

Critics of Democratic leaders’ approach say that the stock trading
bill should have stuck to the legislative branch, and that including
ethics reforms to the judiciary and federal government only
complicated its chances of passage. Those changes could have come in
future bills, they said.

Lawmakers complained this week that the Lofgren bill was not crafted
with input from many rank-and-file lawmakers, particularly
Republicans.

“This is a complex issue requiring thought, debate, amendment and a
full airing in committee to build as much bipartisan agreement as
possible rather than the normal cram-down from the top that
permeates literally everything we do,” Rep. Chip Roy (R-Texas), who
partnered with Spanberger on a stock trading bill, said in a
statement Wednesday.

House Judiciary Committee member Hank Johnson (D-Ga.) said in an
interview that he suspects that many members of his committee
haven’t had time to properly review the legislation.

“I would suppose there are many members who have not actually read
the legislation. And it’s certainly an important enough issue that
we need to take adequate time to deliberate on it. We know that
stock trading by members of Congress and by judges — Article III
judges — is unacceptable,” he said, referring to judges who are
nominated by the president and can only be removed from office with
impeachment proceedings.

A recent analysis by The New York Times found that one-fifth of U.S.
lawmakers traded financial assets in industries that relate to their
work on government committees in recent years.

A 2012 law called the STOCK Act forbids members of Congress from
using insider information when buying and selling stocks, but
watchdogs say violations of the law are common.

“We keep seeing STOCK Act violations,” POGO’s Hedtler-Gaudette said.
“We see them time and time again. And they’re not even assessing
penalties on the people who are violating the STOCK Act.”

The proposed stock trading ban in the House is one of several bills
now being debated in the Senate from lawmakers including Sens.
Elizabeth Warren (D-Mass.), Steve Daines (R-Mont.), Jon Ossoff (D-
Ga.) and Josh Hawley (R-Mo.).

Upon hearing the news of the stalled bill Friday, Hawley tweeted,
“Pathetic. This should be a slam dunk.”

“Congress AND their spouses from owning stock. But no. Pelosi &
Company won’t give up the $$$$,” he continued.

The proposals from Hawley and Ossoff allow for stocks to be put into
blind trusts, while the bipartisan measure from Warren and Daines is
more strict and requires that stocks be sold off outright.

Supporters are still hopeful that lawmakers can finish a stock
trading bill in a lame duck session after the election. But they
note that there will be less pressure on lawmakers to appease
voters, and Congress will already have its hands full with a slew of
legislative priorities, including a government spending bill.

The Hill has reached out to Pelosi’s office for additional comment.

https://thehill.com/blogs/blog-briefing-room/news/3669259-
lawmakers-furious-at-pelosi-after-stock-trading-ban-stalls/