The idea of prohibiting US parliamentarians in office from buying or selling shares on the stock market is gaining ground, but is far from unanimous.
In recent weeks, various bills have been tabled by elected officials on both sides to frame much more strictly the rules on investments by lawmakers in listed companies.
Democratic Senators Jon Ossoff (Georgia) and Mark Kelly (Arizona) are proposing that the stock portfolios of lawmakers, their spouses and dependent children be placed in a blind trust company for the duration of their term of office. . Salary deductions would apply in the event of non-compliance.
“Members of Congress shouldn’t gamble on the stock market even as we craft federal laws and have unique access to confidential information,” Ossoff said.
Josh Hawley, a Republican senator from Missouri and close to Donald Trump, has launched a similar initiative and the Republican minority leader in the House of Representatives, Kevin McCarthy, has pledged to change the law if his party regains a majority in the elections. mid-term elections in November.
“A parliamentarian who actively invests in stocks is crazy,” Republican Florida Senator Marco Rubio told AFP. “If the price goes up, people will suspect insider trading,” a fraudulent practice aimed at making stock market gains through the exploitation of information unknown to the general public.
Suspected conflicts of interest
According to the STOCK Act, in force since 2012, parliamentarians must make public any transaction in a financial asset within 45 days.
“The problem is that this law is not applied and that it is not sufficient”, regrets Kedric Payne, head of ethics for the Campaign Legal Center association, which defends the transparency of electoral financing and the respect laws.
“Too often, parliamentarians do not disclose their operations in time. And even when they do, there are often conflicts of interest,” he continues.
Financial news site Business Insider identified about 50 congressmen (out of more than 500) and 182 congressional staffers who violated the STOCK Act last year, both Democrats and Republicans.
In early 2020, several senators, including the chairman of the Intelligence Committee at the time, had been charged with insider trading for selling stocks just before the collapse of Wall Street in March, even though they benefited from confidential information on the spread of COVID-19.
The investigation by the Ministry of Justice had been closed without further action.
Members of the American central bank (Fed) had also been suspected of conflict of interest for sales of financial securities before the stock market crash linked to the pandemic. The scandal had led to the resignation of two officials of the institution.
A survey of wall street journal also revealed in September more than 130 cases of irregularities concerning the financial activities of federal judges.
Opposition by Nancy Pelosi
The adoption of a new law for parliamentarians and their relatives is far from certain. She encounters opposition in the highest circles, starting with the Democratic Speaker of the House of Representatives, Nancy Pelosi.
“Our economy is one of the free market. They (the elected officials and their spouses) must have the right to participate,” she defended at a recent press conference, judging that the current law simply needed to be better applied.
Mme Pelosi, however, has recently indicated that she would be open to such a ban if supported by the Democratic caucus.
Her detractors point out that if she does not invest directly, her husband is on the other hand very active on Wall Street.
According to the Capitol Trades platform, which lists the stock market transactions of parliamentarians, the Pelosi bought in 2021 for 19 million dollars of shares, mainly in the technology sector (Microsoft, Alphabet, Nvidia, etc.).
“The likelihood of texts passing is very low as long as Nancy Pelosi is Speaker of the House, since she has opposed them publicly and keeps her troops in tight ranks,” said the founder of Congress Trading, another database on the stock market movements of elected officials, who wished to remain anonymous.
M’s positionme Pelosi and other elected officials could move on if the debate turns into a major campaign issue.
A December poll released last week by the conservative Convention of States Action group shows that nearly 76% of American voters want their representatives banned from trading in the financial markets.