In mid-December, Nancy Pelosi, the Democratic Speaker of the House of Representatives, rejected calls for legislation to ban members of Congress from commerce with a one-shot comment that came back to haunt her.
“We are a market economy,” she told reporters at the time. “They should be able to participate. ”
Pelosi’s joke has been criticized for being deaf not only because of his status as the richest member of Congress, but also for being made amid a growing outcry inside the bubble from Washington and across the United States on controversial public investments. officials.
Over the past two years, US lawmakers, including Richard Burr, Republican Senator from North Carolina, have been accused of improperly negotiating confidential information about the pandemic; three senior Federal Reserve officials were forced to resign after the disclosure of questionable transactions, forcing President Jay Powell to fight a reputation crisis; and federal judges have been criticized for failing to recuse themselves in cases involving companies in which they or their families held shares.
Chris Collins, a former Republican congressman, was convicted and sentenced to jail in January 2020 for participating in an insider trading scheme, before being pardoned by former President Donald Trump .
According to the most recent OpenSecrets data from 2018, Pelosi’s net worth was $ 114.6 million, making her the seventh richest member of Congress at the time.
The president’s husband, Paul Pelosi, heads Financial Leasing Services, a San Francisco-based real estate investment and venture capital firm. The latest congressional disclosures show Paul Pelosi bought millions of dollars in call options at several companies last month alone, including Alphabet, Google’s parent company, Roblox, Salesforce and Disney. The exchanges caused a sensation on the TikTok video app, highlighting how the problem resonates beyond the ring road.
Nancy Pelosi’s own crafts have become a TikTok sensation.
Fury over powerful people with unfair opportunities to profit from investments has prompted parties to crack down on securities trading in all three branches of the US government in a bid to unravel Washington’s ties to Wall Street and corporations. American.
According to a poll released this month by the conservative States Convention, 76 percent of Americans believe members of Congress and their spouses have an “unfair” advantage in financial markets, with just 5 percent saying that they should be allowed to negotiate.
“I think the American people understand why this is problematic. It undermines their confidence in the government. It gives the impression that they are really there to serve their own personal financial interests rather than to serve the public good, ”said Virginia Canter, former ethics executive to Presidents Barack Obama and Bill Clinton and the IMF. She is now with Citizens for Responsibility and Ethics, an advocacy group in Washington.
Politicians are taking note. Late last year, a group of Senate Democrats, including Sherrod Brown, chairman of the banking committee, proposed legislation prohibiting Fed officials from trading individual stocks, as Congress began to tighten the screws. from the US central bank.
$ 1.6 million
Median Net Worth of U.S. Senators
Lawmakers are also seeking to restrict their own activities. This week, Jon Ossoff and Mark Kelly, Democratic Senators from Georgia and Arizona, respectively, introduced a bill that would require members of Congress, their spouses and dependent children to place their investments in a trust without the right to look. Abigail Spanberger, Democratic member of the Virginia House of Representatives, and Chip Roy, Republican member from Texas, have been pushing for similar legislation for months.
“These are key steps to asserting the trust people have in us, to make sure people know we are working on their behalf, to dispel doubt and not only to avoid improprieties, but. . . the appearance of impropriety, ”Spanberger told the Financial Times. “I think there is momentum. For some people, that would be a real change in mindset.
Josh Hawley, Republican Senator from Missouri, this week introduced his own legislation that would prohibit members of Congress from owning or trading individual stocks, saying it was “time to stop turning a blind eye to profits from Washington”.
Kevin McCarthy, Pelosi’s Republican counterpart who could become the next president if his party regains control of the lower house in this year’s midterm elections, has also spotted a political opportunity. He reportedly told his allies that he wanted to limit or ban lawmakers from negotiating stocks if his party took the reins.
Yet some experts say a crackdown could have unintended and risky consequences and make public service less attractive to those who racked up large stakes before entering government.
“At the end of the day, access to information on Capitol Hill is pretty important, it basically equates to access to information you get in public company boardrooms,” said Jay Clayton, the former Chairman of the SEC who is an advisor to Sullivan & Cromwell LLP, a law firm.
But lawmakers shouldn’t be too “blunt,” he warned. “You want people to invest, following in the footsteps of the US economy – you have to rely on the expertise of the private sector in government. “
Others say the behavior of many public officials has simply become too blatant to ignore, including after it emerged last year that large numbers of lawmakers had violated disclosure requirements for their financial transactions. required in a 2012 law enacted by Obama.
“How can you ask a member of Congress to make a decision on health care and regulate the health industry or tax medical devices, when they are charged with actions of health care companies? ? It’s an inherent conflict of interest, ”said Richard Painter, a former White House ethics lawyer in the George W Bush administration. “This is a huge problem with the credibility of Congress.”
Meanwhile, the political push for tougher trade rules is mostly led by a younger generation of lawmakers keen to confront the old guard on Capitol Hill, where wealth and power often come together.
According to 2018 data compiled by OpenSecrets, the median net worth of Senate members was just over $ 1.6 million, while in the House it was just under $ 500,000.
“Members of both sides are realizing that it is just politically stupid to gamble on the stock market when they have this kind of access to inside information,” said Craig Holman of Public Citizen, an advocacy group. of consumers. “Even if they don’t do insider trading, it looks like it.”
A White House official declined to approve specific legislation, but said Biden believed that “all government agencies and officials, including independent agencies, should be held to the highest ethical standards, including by avoiding any suggestion of conflicts of interest “.
The question resonates over the 2022 election campaign: John Fetterman, a Democratic Senate candidate in Pennsylvania, this week backed a trade ban for members of Congress, as did Democratic and Republican primary candidates in several other states.
“I don’t think there are Republicans or Democrats [voters] in Pennsylvania who say, “I want my congressman to be able to buy and trade stocks,” said Joe Calvello, director of communications for Fetterman. “It is crazy that members of Congress have seemed to use their insider knowledge for financial gain as we are in the midst of a pandemic where working class people are just struggling to cope.”