New bill would shed light on congressional stock trading – sludge

After Sen. Richard Burr (RN.C.) was exposed for selling more than $ 1 million in stock ahead of the February stock market crash – a time when he was receiving daily information about the emerging coronavirus threat – people who wanted to check out what other members of Congress had traded stocks in the face of a tough job. Senators and Representatives are required to disclose their financial transactions, but the information is not made publicly available in database form, so watchdogs and journalists have had to sift through hundreds of separate reports to examine the 538 federal lawmakers.

It wasn’t supposed to be that difficult to monitor congressional stock transactions. In 2012, when Congress passed the STOCK Act which required members to begin disclosing their trades, the Bill declared that the Office of the Clerk of the House and the Secretary of the Senate should put in place systems that allow the public to “search, sort and download the data contained in the reports” within 18 months.

But that never happened. Shortly after the STOCK Act came into force, Congress passed and President Obama enacted a law follow-up action which repealed the database requirement.

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“I intended to have an online database that I could access and show me all the members of Congress who have traded stocks in the last 60 days,” the government ethics expert explained. from Public Citizen Craig Holman, who worked on the STOCK Act and reported section on the online database. “But they didn’t do it that way. It’s like having PDFs published there. ”

Page 6 of a periodic 11-page transaction report filed by Representative Ro Khanna (D-California) in February. Many members of Congress hand-deliver their transaction reports, which are then scanned and uploaded by the House Clerk’s office. Often the text of these forms is difficult to decipher.

After the Burr scandal, Holman raised concerns over the difficulty of accessing data to Sen. Kirsten Gillibrand (DN.Y.), who had previously considered a separate but related financial transparency measure – requiring federal officials and members of Congress to disclose information about government grants or loans they receive The two transparency issues were brought together in one bill and yesterday Gillibrand introduced a bill she calls STOCK Act 2.0. A version was also presented to the House, sponsored by Rep. Katie Porter (D-California).

STOCK Act 2.0 states that records of Congress financial transactions should be searchable and sortable according to criteria that members are required to report. The language of the bill is intended to describe a system that would allow the public to ask, for example, who in Congress bought shares of Amazon in February or who sold shares totaling over $ 1 million before the downturn in the market. market. The bill would also require that the system be accessible through an API.

In April, a see again by the campaign’s non-partisan Legal Center, found that in the early months of the coronavirus pandemic, U.S. senators and officials completed thousands of stock trades totaling over $ 158 million, with some members making purchases in companies providing remote working technologies.

Ownership by Congress of shares of individual companies poses major conflicts of interest and the potential for corruption. It is common for members to hold shares in companies that fall within the competence of their committee, and even to question business leaders during hearings while holding shares in their company. The Stock 2.0 Act would make it much easier for the public to obtain complete and up-to-date information about these potential conflicts, and it would allow the creation of private web applications similar to those that can be used easily. research information on campaign contributions.

Details of members’ annual financial disclosures should also be available on a searchable and searchable website. Currently, members of Congress are allowed to file their annual disclosures using non-standard handwritten forms that pose major barriers to people attempting to review them. Handwritten forms are often scanned and downloaded in such a way as to make them unreadable.

The House Ethics Committee “strongly recommends using the electronic filing system to complete financial statements and periodic transaction reports,” according to guidelines for members and staff it has been put online. However, even a majority of Republicans in this committee filed their disclosures on handwritten forms last year.

Rep. Sheila Jackson Lee’s handwritten annual financial disclosure for 2018 is hard to read.

The other section of the bill is a response to reports that several members of Congress have been successful in securing forgivable Paycheck Protection Program (P3) loans for their personal businesses when many businesses have not. been able to get federal help during the pandemic. While reporters have managed to identify some of this funding, it’s impossible to know the full picture without members of Congress and other officials being required to disclose what they receive.

“As Congress works on the next COVID relief policy and economic collapse, we are pushing billions of dollars in relief out the door,” said Gillibrand and Porter in a video announce the bill. “Millions of dollars are going straight into the pockets of the same people who make decisions about relief policy.”

Requests for payments from the federal government in the form of grants, contracts or loans, including farm subsidies, should be reported in financial disclosures required of members of Congress and other officials, according to the bill. These requests, as well as any assistance received, should also be reported regularly within 30 days of their receipt by an official.

Holman said the bill should not be controversial, but he is unsure whether Congress will pass it quickly.

“Since this is a disclosure law, I don’t see where the opposition would come from,” Holman said. “The problem is trying to get it on the agenda of Congress. But this is the kind of legislation that really should be bipartisan and really shouldn’t be that controversial. Prospects all depend on our ability to draw their attention to the bill. “

Three Democratic senators have already proposed banning members of Congress from buying and selling individual stocks during their tenure: Senator Elizabeth Warren (D-Mass.), In a 2018 reform package entitled the Law on Combating Corruption and Public Integrity; and Sen. Sherrod Brown (D-Ohio) and Sen. Jeff Merkley (D-Ore.), who last year reintroduced the Conflicting Trade Prohibition Act. A Home version introduced earlier this year by Rep. Raja Krishnamoorthi (D-Ill.) would then have a potential vote in House administration or financial services committees.

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