In the chaotic early days of the pandemic, Congressmen sat behind closed doors in briefings on the nascent threat of the virus before the public knew of its severity. In a unique position to act decisively, the impetus of many present was not to prepare or somehow mobilize the resources necessary to slow the spread of a deadly disease. Some Democratic lawmakers, of course, sounded the alarm. But their pleas for more funding have been stalled by the usual dysfunction of Congress. For other lawmakers, including senior Republican and Democratic leaders, the impetus was to cash in on the private information. So they did what any decent American would do: They rushed to buy and sell stocks just weeks before the market crashed.
The Justice Department investigated four senators for insider trading related to pandemics as a result of the well-timed deals, but found no evidence they broke the law and closed the investigation (although one sitting senator, Republican Richard Burr, was still is determined). by the Securities and Exchange Commission). The insider trading scandals cost Republicans both Georgia Senate seats, making Kelly Loeffler, wife of New York Stock Exchange Chairman Jeffrey Sprecher, and David Perdue, who was CEO of Dollar General prior to taking office, the wealthiest members of Congress at the time. the only elected officials paying a political price. Despite the election losses and initial outrage, the scandal was widely remembered, and stock trading in Congress eventually picked up. Over the past year, over a hundred members of Congress bought and sold nearly $290 million worth of stock, beating the market, according to the latest report by market tracker Unusual whales.
House Speaker Nancy Pelosi, a multimillionaire and Wall Street legend, recently defended congressional stock trading and called for lawmakers’ right to capitalize on the industries they oversee. “This is a free market, and folks — we’re a free market economy,” Pelosi told reporters at a news conference last month. “They should be able to participate in that.”
Pelosi’s insolence didn’t just anger the public. Her defense of open corruption — as Democrats are running in an extremely vulnerable position this campaign year — also fuels efforts by lawmakers and congressional candidates to ban members of Congress and their families from trading in stocks.
This week, Democratic Senators Mark Kelly of Arizona and Jon Ossoff of Georgia introduced new legislation known as the Ban Congressional Stock Trading Act that would require members of Congress and their families to place stock portfolios in blind trusts while in office. Under the bill, lawmakers who break the rule will lose their entire congressional salary. Rep. Angie Craig, a Minnesota Democrat, wants to propose a bill that would bar the legislature from owning any stock at all, a move favored by progressives like Rep. Alexandria Ocasio-Cortez.
This isn’t the first time lawmakers have scrutinized stock trading. The Stop Trading on Congressional Knowledge (STOCK) Act, which prohibits members from acting on “material, non-public information derived from such person’s position as a Member of Congress,” was passed in 2012 after a 60 minutes Exposé revealed how lawmakers dealt with non-public information after the 2008 financial crisis. Pelosi was one of the key officials highlighted in the 60 minutes investigation, and not much has changed since then. These days, young investors on TikTok and Twitter are closely following Pelosi trade moves made by her financier husband Paul Pelosi, and half-jokingly encourage people to copy the “Queen of Investing.” Currently, the Pelosis hold between $5 million and $25 million each in Amazon and Apple stock, according to their most recent disclosure.