U.S. Representative for NY's 14th congressional district, Rep. Alexandria Ocasio-Cortez also known as AOC by her initials, highlighted the lack of progress in passing legislation to ban congress members from trading individual stocks, pointing out that a majority of lawmakers engage in such trading. AOC believes that the difficulty in passing the legislation is unsurprising given the prevalence of stock trading among lawmakers.
Ocasio-Cortez revealed that even last year, 75 members of Congress held individual stocks in pharmaceutical companies such as Johnson & Johnson (JNJ:US), Moderna (MRNA:US), and Pfizer (PFE:US) while also voting on legislation related to the COVID-19 vaccine. She is of the view that drawing the line at this point is crucial. As lawmakers with access to sensitive information and security clearances, they should not be able to trade individual stocks while in office.
To address this issue, Ocasio-Cortez suggests that lawmakers should be allowed to invest in retirement funds, college savings accounts, blind trusts, index or mutual funds—accounts where they don't have direct control over their investments.
According to Capitol Trades analysis of disclosures compiled by MarketWatch, lawmakers bought and sold stocks worth over $355 million last year. Around 113 out of the 535 members of Congress reported stock transactions, with purchases totaling an estimated $180 million and sales reaching $175 million.
Despite growing public support for an ethical overhaul, House Speaker Nancy Pelosi rejected the idea to support such legislation. Pelosi said that lawmakers should have the ability to participate in the free market economy. She stressed her trust in the members of Congress while acknowledging that all insider trading issues should be addressed by the Justice Department.
In December, it was revealed that Pelosi's husband, Paul Pelosi, purchased millions of dollars worth of tech stocks. However, Pelosi's chief of staff clarified that these transactions were made solely by her husband, and she does not own any stocks herself. Although Pelosi's trades ranked eighth in Congress in 2021, there were other lawmakers who made substantial transactions. For example, Rep. Michael McCaul, R-Texas, bought $31 million and sold $35 million in stocks, making him the biggest trader in terms of value.
Ocasio-Cortez has previously criticized the idea of trading stocks while serving in Congress, arguing that elected officials should prioritize the public interest over personal profit. Walter Shaub, former director of the U.S. Office of Government Ethics, also disagreed with Pelosi's stance, stating that members of Congress should not be involved in stock trading alongside their legislative duties.
Sen. John Ossoff and Sen. Mark Kelly are co-sponsoring legislation that would require members of Congress and their families to place their stock portfolios in blind trusts. Violators would face fines equivalent to their salary. Ossoff has reached out to Republicans for support and already has the backing of several House Republicans. Similar bills have been introduced by other lawmakers, aiming to restrict stock trading by members of Congress and White House staff.