Hawley Introduces ‘PELOSI’ Act to Ban Congressional Stock Trading

According to a report by the New York Times, from 2019 to 2021, 183 representatives and senators reported trades by themselves or an immediate family member. More than half included trades that the Times determined may have been a conflict of interest.

Senator Josh Hawley, a Republican from Missouri, recently introduced legislation that would ban lawmakers and their spouses from holding, purchasing, and selling stocks.

The Preventing Elected Leaders from Owning Securities and Investments Act, or PELOSI act, is a clear dig at the former Speaker of the House and California Democratic Rep. Nancy Pelosi.

Pelosi and her husband, Paul, have been criticized for their wealth, which ballooned between 2007 and 2020, partially due to their investments in technology companies.

“For too long, politicians in Washington have taken advantage of the economic system they write the rules for, turning profits for themselves at the expense of the American people,” Hawley said in a statement. “As members of Congress, both senators and representatives are tasked with providing oversight of the same companies they invest in, yet they continually buy and sell stocks, outperforming the market time and again.”

Currently, lawmakers are allowed to trade stocks and securities as long as they do not use inside information to make the trades and disclose any trades over $1,000 made by them or immediate family members within 45 days.

But enforcing that rule has proven difficult. It is nearly impossible to prove a lawmaker used insider information before executing a trade and even when caught, the penalty is insignificant, with the standard penalty amounting to a paltry $200.

The new bill is intended to give lawmakers six months to divest their portfolios or put them into a blind trust while they serve in office.

The issue gained attention after it was revealed several senators, including Dianne Feinstein (D-CA) and former Sens. Richard Burr (R-NC), Jim Inhofe (R-OK), and Kelly Loeffler (R-GA) - or their spouses - unloaded large amounts of stocks and securities after being briefed about the COVID-19 pandemic that had yet to widely spread through the US.

The Department of Justice looked into the trades and investigated Burr further, but ultimately did not pursue charges against any of the lawmakers, with all four denying any wrongdoing.

Last year, a bipartisan bill was introduced to ban stock trading by lawmakers and their spouses. Pelosi initially scoffed at the idea of the ban, saying lawmakers should be allowed to participate in the “free market economy.”

After receiving criticism for those comments, Pelosi eventually relented and signaled she would support the bill, but 2022 came and went and the former House speaker never brought the bill to the floor for a vote. In November, Republicans captured the House of Representatives, electing House Speaker Kevin McCarthy to Pelosi’s old post.

It will be up to McCarthy to decide which, if any, of the stock trading ban bills make it to the House floor. He cannot push the PELOSI Act forward as it is a Senate bill and Democrats still hold the Senate with a slight majority.

The third version of the 2022 bill, the Transparent Representation Upholding Service and Trust in Congress Act was introduced by Reps. Abigail Spanberger (D-VA) and Chip Roy (R-Texas) earlier this year. Another stock ban bill was introduced to the Senate earlier this year by Sens. Jon Ossoff (D-GA) and Mark Kelly (D-AZ).