Speaker of the House Nancy Pelosi signaled Wednesday that she would not block a bipartisan attempt to ban members of Congress from buying and selling individual stocks, a position that she herself has opposed.
“I do believe in the integrity of people in public service. I want the public to have that understanding. We have to do something to deter something that we see as a problem, but it is a confidence issue, and if that’s what the members want to do, then that’s what we’ll do,” Pelosi said during a press conference.
The comments were similar to ones she made in January, when she said that she didn’t believe new rules were necessary but that the House Administration Committee could review the issue. Pelosi is on record as personally opposing a ban, claiming in December that trading stocks allows members to “participate” in the U.S.’s “free market economy.”
Pelosi added in the press conference that she would prefer to “tighten the fines on those who violate the STOCK Act. It’s not sufficient to deter behavior.”
The STOCK Act requires members of Congress to file stock transactions with their chamber clerk within 45 days of conducting the trade. Members frequently flout the reporting requirement, but enforcement is uneven. (RELATED: Rep. Jamie Raskin Violated STOCK Act Over Securities Shares His Wife Cashed, Complaint Alleges)
“The enforcement of the financial-disclosure requirements is virtually nonexistent,” a former investigative counsel in the House’s Office of Congressional Ethics reportedly told Business Insider. “The committee does not look for late filings. There is no notification or follow-up.”
Democrats and Republicans have introduced legislation that would prohibit Congress members and their direct family members from trading individual stocks. A bill proposed by Democratic Virginia Rep. Abigail Spanberger and Republican Texas Rep. Chip Roy would require members, spouses and dependent children to place their investments in blind trusts, while legislation introduced by Republican Missouri Sen. Josh Hawley would require members to surrender individual stocks to the Treasury Department if they are caught holding them.
Pelosi did not endorse any current legislation.
“I’m a big believer in our committees, and we tasked the House Administration Committee to review the options that members are putting forth, and they have different views on the subject,” she said.
The House speaker went on to criticize the Supreme Court’s ethics requirements, claiming that any financial reform would have to be “government-wide.” Although lower federal courts are bound by ethics rules legislated by Congress, the Supreme Court sets its own ethics and disclosure rules. Prominent liberals, most notably Rhode Island Sen. Sheldon Whitehouse, have claimed that the Court’s lack of disclosure rules allow it to be controlled by right-wing dark money.
“We make a disclosure every year, our financial disclosure, that is what it is. And then in addition to that, on regular basis, when there is a stock transaction, to report that. The court system, the third branch of government, the judiciary, has no reporting. The Supreme Court has no disclosure, it has no reporting of stock transactions, and it makes important decisions every day,” Pelosi said.
Pelosi conducted up to $30.4 million worth of stock trades in 2021, according to her ethics disclosures. According to the financial analysis blog Unusual Whales, Pelosi’s trades had the sixth-best performance of all members of Congress, and the best among Democrats. Notably, Pelosi exercised call options on Microsoft stock in March, less than two weeks before the U.S. Army announced a nearly $22 billion contract with the tech giant.
I have just released the full trading report on politicians in 2021.
In short, many beat the market.
They traded more than ever before.
And they made numerous unusually timed trades, resulting in huge gains.
— unusual_whales (@unusual_whales) January 10, 2022
House Minority Leader Kevin McCarthy revealed in January that he would consider a limit or ban on individual stock trades should Republicans take back the House of Representatives in the midterms.
More than three-quarters of general election voters support banning members of Congress from trading individual stocks, a poll conducted in December by the Trafalgar Group and Convention of States found.