Members of Congress tend to do pretty well for themselves. According to data analyzed by OpenSecrets in 2020, a majority of the 535 senators and representatives were millionaires. Congressional …
Members of Congress tend to do pretty well for themselves. According to data analyzed by OpenSecrets in 2020, a majority of the 535 senators and representatives were millionaires. Congressional members collect a salary of $174,000 a year while in office, but they tend to have made more in prior careers and investments — and some keep investing while in office. There’s nothing inherently wrong with lawmakers seeking to add to their wealth — this is America, after all — but things can get awfully murky when they’re trading the stock of specific companies.
Consider this: On Feb. 13, 2020, U.S. Sen. Richard Burr, R-N.C., sold more than $1.6 million worth of stocks. That same day, Burr placed a phone call to his brother-in-law, who immediately dumped somewhere between $97,000 and $280,000 worth of his own holdings, according to data compiled by ProPublica.
Their sales wound up being exceptionally well-timed: Just a week later, the stock market began a roughly 30% dip, as the COVID-19 pandemic and associated restrictions started to wreak havoc across the country.
Burr, who sits on the Senate’s intelligence and health committees, has claimed his sales were based only on public information and that he didn’t coordinate with his brother-in-law. That may be true; the Department of Justice investigated the possibility of insider trading and cleared Burr of criminal wrongdoing.
But the lame duck senator’s actions sure don’t pass the smell test. And that’s the real problem with allowing senators and representatives to trade stocks: It undercuts public confidence in our government.
Wyoming is fortunate to have not seen the same type of wheeling and dealing among its delegation.
Since being elected to the House in 2017, Rep. Liz Cheney, R-Wyo., has had no reportable sales, according to House Stock Watcher. Sen. John Barrasso, R-Wyo., meanwhile, hasn’t had a transaction since 2018, when he sold off his interest in a piece of land in Casper for between $50,000 and $100,000, according to Senate Stock Watcher.
As for U.S. Sen. Cynthia Lummis, R-Wyo., compiled data shows she bought $1,000 to $15,000 worth of shares of Jacobs Engineering Group Inc. last year, along with $50,000 to $100,000 worth of Bitcoin. The latter purchase has raised eyebrows among some critics, since Lummis is actively involved in trying to lay out a regulatory framework for the nascent cryptocurrency industry. However, there’s a real case to be made that Bitcoin is not a speculative stock, but a commodity; Lummis has described seeing it as an inflation-resistant store of value.
“Should I also sell my cows?” she asked the Wall Street Journal late last year. “Should I sell my mutual funds? Should I sell my retirement fund, just because it might be invested in something that is a great store of value?”
When it comes to stocks, at least, our system of government would be much better off if lawmakers stuck to retirement and mutual funds instead of trading on the fates of specific companies. There’s no question the public is watching, and picking up on the ways that senators, representatives and their families are often beating the market.
In September, NPR reported on a series of young investors who track and copy the trades made by members of Congress and their immediate family members, such as those made by the husband of House Speaker Nancy Pelosi, D-Calif.
“I’m at the point where if you can’t beat them, join them,” investor Chris Josephs told NPR, adding that if he sees trades listed on Pelosi’s disclosures, he typically buys those stocks. Pelosi says she doesn’t have any involvement in her husband’s trades … but it still just doesn’t feel right.
Congress passed the Stop Trading on Congressional Knowledge (STOCK) Act in 2012, prohibiting lawmakers and their staffers from using non-public information to make a buck. (Not-so-ironically, Sen. Burr was one of only a few lawmakers to oppose the bill.) It was a good step that included heightened reporting requirements, but recent events have made clear the act did not go far enough.
Last week, NPR highlighted a renewed, bipartisan push to bar members of Congress from trading individual stocks. Rep. Ken Buck, R-Colo. — a former Wyoming resident — is among those backing the idea.
“I don’t know of anybody that has profited,” Buck told NPR. “But I do know that members of the public are questioning whether we get insider information.”
That ugly perception is reason enough to outlaw the practice. Passing a ban on trading stocks may curb money-making opportunities for members of Congress and their families, but pay for itself in spades by bolstering trust in government.