Sometimes, it’s no wonder that Americans have lost faith in Congress. Last year, a groundbreaking report by 60 Minutes found that some Members of Congress may be using insider information—acquired through their official duties—to enrich their stock holdings.
Members of Congress should not have a different set of rules—they should be treated the same as everyone else. Public servants should not obtain financial benefits as a result of the votes they cast or the issues they work on.
Last week, the Senate passed the Stop Trading on Congressional Knowledge (STOCK) Act, which clarifies that insider-trading laws apply to Members of Congress as they do to people in the rest of the country. The STOCK Act is a common sense, bipartisan measure that prohibits insider trading by Members of Congress and their staff. It also improves transparency by strengthening disclosure laws so that Members of Congress must report within 30 days when they buy or sell stocks or bonds.
I encourage the House of Representatives to pass the STOCK Act and send it to President Obama so he can sign it into law.
But the STOCK Act represents only the first in a series of actions that we can take to clean up Washington. The STOCK Act really only deals with insider trading—and that’s only a small part of Washington’s problem.
I want to see us go further. Why should senators vote on issues that affect the oil industry while owning oil company stock—or vote on issues that affect prescription drugs when they own stock in pharmaceutical companies? The concept is simple: senators should not be voting on issues that affect their financial investments.
Right now, committees like the Senate Armed Services Committee (SASC) require that staff members, their spouses, and dependents divest themselves of any stock in companies doing business with the Department of Defense and the Department of Energy. Federal regulations and federal criminal law also prohibit Executive Branch employees, their spouses, and children from owning stock in companies that they regulate. However, that prohibition is not extended to Members of Congress—the same ones who make laws that affect publicly-traded companies. That’s not right.
That’s why I authored and introduced the Putting the People’s Interests First Act, which would require that Members of Congress divest themselves from their stock holdings. It would extend to Senators the conflict of interest rules that currently apply to committee staff and executive branch officials. Members of the Senate should hold themselves to the same standard that they require of others.
Under my legislation, Members of the Senate and their staff would be prohibited from owning individual stock in companies affected by their official duties. The only investments Senators would be able to have are ones managed by others— in blind trusts or broad-based mutual funds. Members would still be permitted to keep ownership interests in their family farm or small business.
While this bill won’t win me any popularity contests with my colleagues, I believe that it’s the right thing to do. The trust that the American people have in Congress is at an all-time low. Members of the House and the Senate must demonstrate to the public that their focus is on rebuilding the economy, not their stock portfolios.
Support for this concept runs across party lines. When asked about the requirement to divest, President George W. Bush’s Deputy Secretary of Defense, Gordon England said: “I think Congress should live by the rules they impose on other people.” Former Defense Secretary William J. Perry, who served under President Bill Clinton, said that divesting his holdings prior to becoming Secretary of Defense: “was very painful, but I do not disagree with the importance of doing this. The potential for corruption is very high. It keeps our government clean.”
Earlier this month, President Obama said in his State of the Union address: “Let’s limit any elected official from owning stocks in industries they impact.”
I agree—and that’s why I wrote the Putting the People’s Interests First Act.
Public service is a privilege— there’s no reason that Members of Congress need to buy and sell stocks in multi-million dollar portfolios. I’ve called on my fellow Senators to join me in implementing these common-sense ethical regulations.
This is one small step that Congress can take to restore the American people’s trust in their elected officials.
Sherrod Brown is a United States Senator from Ohio.