The senators who sold off millions of dollars worth of stock holdings at the beginning of the pandemic may have avoided charges following federal investigations, but to many lawmakers, the episode further tarred the reputation of an institution that already suffers from abysmally low levels of public trust.
As a result, a bipartisan group of House members decided that the only way to stop the appearance of corruption is to eliminate any possibility of a conflict between members’ official duties and their personal financial interests.
A leading vehicle for that goal is the so-called TRUST in Congress Act, which would require lawmakers to place their stock holdings in a blind trust during their time in office. Authored by Reps. Abigail Spanberger (D-VA) and Chip Roy (R-TX), the legislation was first introduced last July, months after several senators were found to have moved large quantities of their stock portfolios after they received briefings about the spread of the coronavirus in January.
Since then, public outrage has only grown over the perception of wealthy and well-connected lawmakers benefiting from their perches in power to make money amid the pandemic. Additional reporting, including from The Daily Beast, showed how prolific some members had been in their trading for years, and how frequently their actions in Congress could conceivably help companies they had invested in.
In interviews with The Daily Beast, Spanberger and Roy made clear they do not believe that insider trading is rampant among their colleagues on Capitol Hill. But they are concerned that many of their constituents now believe it is, and that instituting a blind trust requirement is the least they can do to begin allaying widespread perceptions of corruption.
“The way people view Congress—and I’m one with a low opinion of Congress—it’s sometimes artificially low, because they attribute things to us that aren’t actually true,” said Roy. “That’s why it’d be important for us to do something like this.”
Spanberger said she was struck most by how the public seemed to shrug at the stock trading stories, assuming that such behavior by elected officials was the norm. “The idea that a member of Congress would be purchasing or selling stocks based on the knowledge they have… it’s just on principle offensive to me,” she said. “But the fact the American people said, ‘yeah, that makes sense,’ that’s the part we need to take a step to remedy.”
In a demonstration of the broad appeal of that message, Spanberger and Roy reintroduced the legislation last week with four Democratic and three Republican cosponsors who span the ideological spectrum. And they rolled out a set of outside endorsements from conservative groups—like the Koch-backed Americans for Prosperity—who joined a slate of progressive groups in backing the plan.
Cosponsors include Rep. Mondaire Jones (D-NY), a freshman who is among the chamber’s most left-leaning members, and Rep. Scott Perry (R-PA), a Freedom Caucus member and strident Trump supporter. “You can skip from furthest left to furthest right, who agree that this is a major issue that we as members of Congress should be contending with,” said Spanberger.
Such broad buy-in is rare to see when it comes to significant legislation on Capitol Hill. Spanberger and Roy both say they haven’t talked to a single colleague who believes the bill is a bad idea. But many good bills die every year in Congress, and the biggest obstacle to passing one of the most significant ethics reforms in recent years may be Capitol Hill’s most common enemy—inertia—and the difficulty of self-policing.
“It’s always an uphill battle to get Congress to regulate itself,” said Andrew Lautz, manager for government affairs at National Taxpayers Union, a conservative-leaning advocacy group that has been a champion of the TRUST in Congress Act.
The events of the last year, however, may have given lawmakers even more reason to consider getting on board. Stock trades made around the time of private COVID briefings by Sens. Richard Burr (R-NC), Jim Inhofe (R-OK), and Dianne Feinstein (D-CA), and former Sens. David Perdue (R-GA) and Kelly Loeffler (R-GA), resulted in Department of Justice probes into all of their investment histories.
Burr, whose phone was seized by FBI agents over the summer, saw a lengthy investigation end without charges many months later, on Jan. 19. In the interim, he was forced to relinquish his chairmanship of the Senate Intelligence Committee. A New York Times report on the investigation into Perdue surfaced his extensive stock trading—and disproved his repeated assertion he did not direct his own transactions—in the middle of the runoff election he ultimately lost. The Daily Beast also reported on Perdue’s trading, finding that he helped steer federal money to a U.S. Navy contractor he had invested in.
In the aftermath of those reports, many politicians and good-government groups questioned why lawmakers are allowed to own individual stocks at all—or why they would choose to, given the reputational risks. “Regardless of the events of last year, no member of Congress would want to see a headline where their name is attached to insider trading allegations,” said Lautz.
Indeed, after the initial raft of COVID stock scrutiny, many lawmakers chose to sell off their holdings in individual stocks, instead holding onto mutual funds and other widely-held investment products, which would be allowed under the TRUST in Congress Act. But very few of them have elected to put their assets into a blind trust.
Both the bill’s authors said they have heard from colleagues inclined to support the legislation, but have misgivings about the logistics. “I’ve had other people say, if it weren’t for my stock holdings, I wouldn’t have been able to step away from my job to run,” said Spanberger. “I’m not forcing you to sell it—whatever your holdings are, put it in a blind trust.”
In order to ensure these tougher ethical requirements are accepted, said Roy, “we have to get to a place where there’s a critical mass of members saying, we need to get Congress back to Article I primacy, where the American people believe in Congress, doing what Congress ought to be doing to represent the American people.”
Tough restrictions already apply to executive branch employees, who are not elected and typically have less power than a lawmaker. They are barred from participating “personally and substantially” in any matter they know would have an effect on their own financial interests.
So far, the two gathering supporters ahead of a full push to pass the bill once Congress completes a coronavirus relief package, which is President Joe Biden and the Democratic majority’s first legislative priority. Proponents say the blind trust measure could move as part of a larger package of ethical and good-government reforms such as those included on H.R. 1, Democrats’ lead bill from 2019.
The TRUST in Congress Act was referred to the House Administration Committee, which sets the rules and regulations that members and their offices have to abide by. Spokespeople for the chair, Rep. Zoe Lofgren (D-CA), and the ranking member, Rep. Rodney Davis (R-IL), did not respond to requests for comment on their stance on the bill or when they might advance it. Speaker Nancy Pelosi’s (D-CA) office did not respond to an inquiry about her position on the legislation.
Supporters are confident it’ll get there. Roy, a conservative from Texas, said, “the fact we’ve got a bill that crosses the ideological spectrum… there’s a very good chance this Congress to move it.”
Spanberger agreed, saying the bill was about as straightforward as a major ethical reform could be. “You have a concern that members of Congress might be self-dealing? Well, here is a solution to that: they can't do it,” she said.
Failing to do so, said the Virginia Democrat, would reinforce a dismal standard of congressional behavior—one that many in the public are already convinced exists. “If the bar is, members of Congress shouldn’t be overtly corrupt, then I think that bar is wrong,” said Spanberger. “It should be that the possibility isn’t even there.”