Pelosi Behind Bill Banning Stock Trades By Legislators

House Speaker Nancy Pelosi (D-CA) has reversed course and is behind a measure House Democrats introduced Tuesday to ban federal personnel from trading stocks.

Pelosi was key to shooting down a similar measure last year, but this time around she had Rep. Zoe Lofgren (D-CA) draft the new one.

There has been an increase in support in recent months from several prominent members of Congress. Sen. Minority Leader Mitch McConnell (R-KY) said in February when Pelosi’s work with Lofgren began that he would consider throwing his support behind the ban.

The measure supported by House Democrats restricts stock trades by members of Congress, several senior government officials, and members of the Supreme Court.

The so-called “Combating Financial Conflicts of Interest in Government Act” would apply to federal judges, the president and vice president, and members of the Board of Governors of the Federal Reserve as well as spouses and dependent children.

Violations could result in an initial penalty of $1,000, though the measure allows for a dramatic increase in fines if a violation continues.

One push for the new bill came after the New York Times published a report earlier this month showing that at least 97 members of Congress filed papers declaring they traded stocks that were affected by committees on which they sat.

One of the worst was Rep. Ro Khanna (D-CA), who tallied 149 potential conflicts in his stock dealings. As he served on the Agriculture Committee, Khanna dealt with equities from Deere and Co.

As a member of the Armed Services Committee, the representative traded shares of Boeing, General Electric, and Raytheon Technologies.

And while serving on the Oversight Subcommittee on Economic and Consumer Policy, the Times reported that Khanna traded in equities from Johnson & Johnson, Medtronic, Pfizer, and several other companies potentially affected by his congressional work.

This House bill deserves much scrutiny, especially if it passed Pelosi’s muster. Government officials in many cases are the definition of insiders when they are trading in certain industries, but watch for loopholes and exclusions. As with all, the devil is in the details.

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