WASHINGTON, D.C. – U.S. Senators Jeff Merkley (D-OR) and Sherrod Brown (D-OH) today introduced the Ban Conflicted Trading Act, new legislation that would prohibit members of Congress from abusing their public positions for personal financial gain.
The Ban Conflicted Trading Act responds to multiple scandals in recent years in which members of Congress have been found buying and selling stocks in certain industries while at the same time crafting legislation that affects those industries.
“It’s way past time to end conflicted trading, in which legislators and top staff trade in stocks while making decisions affecting their value. This is scandalous,” said Merkley. “It undermines both the integrity of governance and the perception of integrity. Let’s end this corruption now!”
“Members of Congress serve the American people, not their stock portfolios,” said Brown. “Elected officials have access to nonpublic information that can affect individual companies and entire industries. There must be more accountability and transparency to prevent members from using this information and abusing their positions for personal gain.”
The Ban Conflicted Trading Act follows two major congressional trading scandals in recent years.
Earlier this year, it was revealed that Representative Chris Collins (R-NY) bought nearly $1 million in discounted shares from the Australian pharmaceutical company Innate Immunotherapeutics. Chris Collins sat on the company’s board, while he and his family members owned about 20%—with a personal investment worth $720,000—of the company. He sat on the Health Subcommittee of the Committee on Energy and Commerce during that time. On August 8, 2018 Collins was arrested by the FBI, along with his son and son’s father-in-law, for wire fraud, conspiracy to commit securities fraud, securities fraud, and lying to the FBI in connection with his activities related to Innate Immuno. Representatives Doug Lamborn (R-CO), Billy Long (R-MO), Mike Conaway (R-TX) and John Culberson (R-TX) also bought shares in Innate Immuno.
Meanwhile, in January 2017, it became apparent that then-Health and Human Service (HHS) Secretary nominee Tom Price (R-GA), who sat on the Ways and Means Committee and Health Subcommittee during his time in Congress, had made dozens of stock trades in the health industry over a multi-year period while also acting as a top health care policymaker. While legislating, he advocated for the interests of a company he was invested in, Amgen, without disclosing the conflict of interest. And less than a week after purchasing shares in Zimmer Biomet, a medical devices company, Price introduced legislation to delay a Centers for Medicare and Medicaid regulation until 2018—a move that would protect the company’s finances. After introducing the act, Price’s reelection campaign received a donation from Zimmer Biomet’s PAC. In total, Price held stock in more than 40 companies that created conflicts of interest for his position as Secretary of HHS.
The Ban Conflicted Trading Act would prohibit members of Congress and senior congressional staff from buying or selling individual stocks and other investments while in office.
New members would be allowed to sell individual holdings within six months of being elected, and sitting members of Congress would be allowed to sell individual holdings within six months after enactment of the bill. Alternatively, members of Congress can choose to hold existing investments while in office—with no option for trading until they leave office—or transfer them to a blind trust. Members of Congress would still be allowed to hold widely-held investments, such as diversified mutual funds and exchange-traded funds.
In addition, the legislation would prohibit members of Congress from serving on any corporate boards while in office.