The House fails to pass bill barring lawmakers from stock trading
Democrat Rep. Abigail Spanberger of Virginia excoriated her party leadership including House Speaker Nancy Pelosi and House Majority Leader Rep. Steny Hoyer for delaying a potential vote this week meant to ban lawmakers from holding and trading in stocks. Spanberger even called for new leadership in the Democrat party.
Spanberger had partnered with Rep. Chip Roy (R-Tex.) to introduce the Transparent Representation Upholding Service and Trust in Congress Act on Jan. 15, 2021. The legislation had 71 co-sponsors, ranging from Republican Rep. Matt Gaetz of Florida to squad member Rep. Ilhan Omar of Minnesota.
The legislation would have required lawmakers and immediate family members to place stocks in a blind trust.
Business Insider magazine’s Conflicted Congress investigation in December 2021 revealed dozens of STOCK Act violations, and numerous potential conflicts of interests driven by lawmakers' stock holdings, as well as paltry enforcement of anti-insider trading rules. Forty-nine members of Congress and 182 senior congressional staffers violated laws aimed at preventing insider trading.
The reports obviously caused outrage among the public.
Consequently, Pelosi, who initially rejected the idea of a stock trading ban, summarily changed her course.
But instead of supporting Spanberger’s bill, Pelosi directed the House Administration Committee to develop their own legislation without holding consultations with lawmakers.
This package would have banne not only lawmakers, their spouses, their dependent children, and their senior staff, but also Supreme Court justices and members of the executive branch from owning or trading stocks while in office. They would have to place stocks in other types of investments such as diversified mutual funds, or a qualified blind trust.
Ethics experts at the nonpartisan Project on Government Oversight discovered a loophole in the bill. They say the bill allows for the creation of blind trusts that aren’t compliant with existing regulations in the Ethics in Government Act.
The House released the text of the "Combatting Financial Conflicts of Interest in Government Act," on Tuesday night.
Next, House Majority Leader Steny Hoyer who schedules floor votes, claimed that lawmakers needed more time to study the bill before they could vote on it. The bill in question was 26 pages long.
The same House easily passed a bill of over 2,700 pages that dispatched billion to Ukraine a mere 12 hours after its release.
The House leaves Washington on Friday and is not scheduled to return until after the midterms. The TRUST in Congress Act will not come up for a vote until after Election Day.
An outraged Spanberger released the following scathing statement:
"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," the congresswoman said Friday morning.
The two-term congresswoman said that support for her bill has grown in recent months — but party leadership engaged in “repeated delay tactics” to avoid a vote.
Obviously, the delay was an act of sabotage, led by Pelosi, who is very close to Hoyer.
The new package was purposefully released a few days before the recess. Critics pointed out that the package was too broad and unnecessarily complicated for what was a simple reform.
The goal behind the charade was to deceive the public into thinking they were that their intentions were honorable but they failed due to time constraints.
Spanberger herself may be engaging in theatre. She is currently involved in a close midterm race against her GOP challenger Yesli Vega for her House seat. These anti-Pelosi rants could be an idea to win secure votes in conservative-leaning Virginia. In a close contest, every vote matters.
So why did Pelosi and others sabotage The TRUST in Congress Act?
A House speaker's disclosure report released in July revealed that speaker Pelosi's husband Paul invested $5 million in 20,000 shares of NVIDIA, a software and fabless company which, according to Wikipedia, "designs graphics processing units (GPUs), application programming interface (APIs) for data science and high-performance computing as well as system on a chip units (SoCs) for the mobile computing and automotive market."
The Daily Caller reported that Paul's stock purchase was prior to a vote on a bill that would deliver massive grants, subsidies, and tax credits to chip manufacturing.
NVIDIA uses a lot of chips.
Obviously, only a select few, such as Speaker Pelosi, were aware of the contents of the bill and the fact that it was heading for a vote in the Senate.
This is too much of a coincidence and presents a case of conflict of interest for Pelosi.
Last year, Paul made over $5 million after trading stocks in Google parent company Alphabet Inc, Amazon, and Apple, just ahead of the House Judiciary Committee's vote to advance five antitrust bills targeting major tech giants.
Paul is not the only offender.
Myriad other lawmakers of both parties invested in sectors whose relevance was elevated owing to the COVID-19 pandemic. They also sold investments from sectors adversely affected by the lockdowns following the pandemic.
What happens beyond Washington?
A Netflix employee was sentenced to 14 months in prison and $10,000 in fines for insider trading.
The husband of a former Amazon employee was sentenced to 26 months in prison for earning $1.4 million by using inside trading information.
Back in 2004, Martha Stewart suffered a prison term after she was convicted of charges related to insider trading.
There are numerous other cases of people serving jail time for questionable stock trading.
But Washington, as always, operates with impunity. Consequences for miscreants are nil.
Last September, during her visit to the U.K., Nancy Pelosi said that in America, capitalism "has not served the economy as well as it should" because "the success of some springs from the exploitation of the workers and springs from the exploitation of the environment and the rest."
Pelosi was unknowingly describing her circumstances, where her husband could be exploiting his access to information to reap profits while regular people struggle to keep their heads above the water despite doing two jobs.
However same anti-capitalist Pelosi became a huge proponent of the free-market economy in response to the idea of barring lawmakers and their close family members from holding or trading individual stocks while in office.
A free market economy works when there is fairness.
The stock markets can only be regarded as fair when all investors have identical access to information. Yet a few use their experience and acumen to reap profits.
The lawmakers with access to information that is restricted from the general public obviously have an unfair advantage. So it makes sense for all public servants to refrain from using their position in government to reap profits in the private stock market.
This is an essential sacrifice that they need to make for choosing a career in government. If they feel this is unfair, they are more than welcome to quit their jobs and dedicate their lives to trading in stocks.
There are two major challenges here.
The first is to pass comprehensive laws that ban lawmakers from holding and trading in stocks.
The second and most important challenge is to ensure that these laws and other existing laws are enforced such that offenders are punished.
The GOP has a sterling opportunity after the midterms.
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