Nearly 20% of Congress members have been trading shares of companies in industries they are supposed to be overseeing as part of their committee assignments — creating major conflicts of interest, a new report finds.
Between 2019 and 2021, 97 US senators and Congress members or their immediate family made financial transactions in which they may have had access to inside information, the New York Times reported on Tuesday.
Rep. Bob Gibbs (R-Ohio), a member of the House Oversight Committee, reported buying and trading shares of pharmaceutical giant AbbVie in 2020 and 2021 — at the same time the committee was investigating the company and its rivals for unfair pricing practices.
Meanwhile, a total of 13 lawmakers traded shares of companies that were under investigation by committees they served on. The wife of Rep. Alan Lowenthal (D-Calif.) sold Boeing shares in March 2020 — just a day before a committee her husband sat on released a bombshell report that alleged Boeing leadership was partly to blame for two fatal 737 MAX crashes.
To be sure, some of the estimated 3,700 trades executed during the three-year span were routine — and some were executed by independent brokers or trusts. Additionally, there were more than 80 legislators who made stock trades that had nothing to do with committees they sat on.
Still, at least 10% of the trades may have presented a conflict of interest, according to the report. The most active traders were also those who may have had the most insider information. Forty-four of the 50 most active traders in Congress had conflicts of interest.
The analysis doesn’t even capture all problematic trades. For instance, Speaker of the House Nancy Pelosi’s husband is famous for purchasing shares of companies like Amazon and Meta, which Pelosi is responsible for regulating. But since Pelosi doesn’t sit on a committee, she was not included in the study.
Despite ongoing concerns about lawmakers’ financial transactions, there is minimal regulation on stock trades.
Under the STOCK Act, which is the only legislation that reins in lawmakers’ trades, most members of Congress are still free to make trades that could conflict with their legislative duties — as long as they disclose the information within 45 days.
The 2012 law was passed with bipartisan support in the wake of a stock trading scandal. Yet in the nearly 10 years since it was enacted, no one has been prosecuted under it even as many members continue to conspicuously trade.