On paper, the idea of banning congressional stock trades has all the ingredients for success: supermajority support in polls, bipartisan sponsors, and public backing from House Speaker Mike Johnson, R-La.
Everything in Washington, however, is not as it seems.
Ahead of a House committee hearing on the flaws of the current rules on congressional stock trades, sponsors of the leading reform proposal were split on its chances. Some of the bill’s backers were even divided as to whether the hearing itself represented a genuine step forward — or, potentially, a delay tactic from House leadership.
Some proponents worry Johnson scheduled the hearing to placate them while kicking the can down the road on more concrete advancement, like marking up and voting on the measure.
The House speaker has expressed support for a stock trading ban, but he also said that he has “sympathy” for the counterargument that members need to wheel and deal in stocks in order to support their families.
“The speaker could have just gone directly to markup on this bill if he were supportive of it.”
“The hearing was positive and everybody was supportive of restricting congressional stock trading activity, but it’s sort of a delay tactic,” said Craig Holman, the Capitol Hill lobbyist for the nonprofit good governance group Public Citizen. “The speaker could have just gone directly to markup on this bill if he were supportive of it. He has expressed support of the concept, but not the bill itself.” (Johnson’s office did not respond to a request for comment.)
Rep. Seth Magaziner, D-R.I., hinted that the sponsors would be willing to push for a discharge petition — like the one that secured the release of the Epstein files — if Johnson does not move fast.
“Make no mistake, if this is not a step in the right direction but a delaying tactic, then other options will be on the table for how to get this bill to the floor,” Magaziner said. “We are glad to see some movement, but this is, we believe, just the first step, and the other steps need to come soon.”
Magaziner and his co-sponsors have been fighting for some form of a stock trading ban for years, in the face of mounting evidence that the law on the books has done little to curb self-dealing.
Current law has two major components: a transparency provision requiring that legislators disclose stock trades within 45 days, and another measure threatening lawmakers with jail time if they trade stocks based on insider information.
Neither part of existing law has teeth, witnesses told the House Administration Committee on Wednesday. The disclosure provision is routinely — sometimes flagrantly — violated by lawmakers who wait months to file disclosures. There is no public record of whether they have coughed up the paltry $200 fines.
Perhaps most importantly, the law has never triggered the criminal prosecution of a lawmaker accused of insider trading.
Representatives at the hearing ticked off examples of questionable Congressional traders. The husband of Rep. Nancy Pelosi, D-Calif., has drawn widespread attention for his profitable stock deals. Former Sen. Richard Burr, D-N.C., also executed a suspiciously well-timed sell-off of his holdings before Covid spread widely in the U.S.
The hearing highlighted the flaws of the current system, but it did not focus on any of the competing proposals to fix it.
Magaziner and co-sponsors, including Reps. Chip Roy, R-Texas, and Alexandria Ocasio-Cortez, D-N.Y., spent months crafting a proposal that could draw support from conservatives and liberals alike.
They have yet to receive a formal markup hearing that would precede a House floor vote on their bill, known as the Restore Trust in Congress Act.
Rep. Anna Paulina Luna, R-Fla., has threatened to force the bill onto the House floor with a discharge petition, the same mechanism that members used to force Johnson’s hand on the Epstein files.
One of the leading Republican co-sponsors of the Restore Trust in Congress Act, Rep. Brian Fitzpatrick, R-Pa., seemed far more confident than Magaziner that the bill will get a vote.
“We will get this done this Congress, mark my words. This bill, or a bill, will come to the floor,” Fitzpatrick said.
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Public Citizen’s Holman said the bigger obstacle may lie in the Senate, where individual members have more sway and a group of Republicans including Sen. Ron Johnson, R-Wis., have expressed their opposition. Johnson called one proposed stock trading ban “legislative demagoguery.”
Neither of the leading House and Senate bills apply to Trump and his family, who continue to trot the globe making lucrative deals in cryptocurrency and real estate. Holman said he hoped that someday the law will be strengthened to address the Trump family’s conflicts, but he doesn’t want to let perfect be the enemy of the good.
“Trump is a problem, and he is abusing this extensively,” Holman said. “So at this point, a great version would include the president, but I know if we do that, it’ll kill the bill in the House and the Senate with the Republican Congress.”