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Newhouse is the latest among 13 lawmakers Raw Story has so far identified this year to violate the Stop Trading on Congressional Knowledge (STOCK) Act, which requires federal lawmakers to report within 45 days any individual stock, bond, Treasury security or cryptocurrency transactions they, their spouses or dependent children conduct.
“In reviewing their finances, the congressman’s spouse noticed an oversight in her filing and took immediate steps to rectify it as soon as possible,” Mike Marinella, Newhouse’s press secretary, said in a statement to Raw Story. “The congressman and his family have always been and will continue to be fully transparent about their finances which is why it was corrected immediately.”
Newhouse reported 61 separate stock transactions on a May 26 financial disclosure, each in the $1,001 to $15,000 range. Federal lawmakers are only required to disclose the value of such stock transactions in broad ranges.
Rep. Dan Newhouse (R-WA) was late disclosing up to $765,000 in personal stock transactions. Alex Wong/Getty Images
Only 10 of the transactions were in compliance with the STOCK Act’s reporting deadlines. Newhouse disclosed stock purchases and sales across a variety of industries, including tech, financial services, agriculture, pharmaceutical and energy companies such as Apple, Tesla, Citigroup, Deere & Company, Eli Lilly and Company, Marathon Petroleum and NextEra Energy.
Newhouse serves on several U.S. House committees and appropriations subcommittees that have oversight jurisdiction for some of those industries. His appointments include:
- House Select Committee on Strategic Competition between the United States and the Chinese Communist Party
- House Committee on Appropriations
- Subcommittee on Agriculture, Rural Development, and Food and Drug Administration
- Subcommittee on Energy and Water Development
- Subcommittee on Homeland Security
RELATED ARTICLE: Busted: These 6 members of Congress violated a federal conflicts-of-interest law
“The purpose of the law is to give the public notice of trades soon after they're made, and that purpose is defeated if the trades aren't reported until a year or more after,” said Kedric Payne, vice president, general counsel and senior director of ethics at the Campaign Legal Center, a nonpartisan government watchdog organization.
Newhouse’s congressional office did not confirm whether or not he would need to pay a fine for the late disclosure. The standard fine is $200.
“If you had a higher penalty, I think it would get the attention of lawmakers a lot quicker,” Payne said. “That $200 penalty is from the 1970s. If you change that to just adjust it for inflation, I think then you'll start to get people's attention.”
‘Updated guidance’
Another Washington state congressman, Rep. Rick Larsen (D-WA), was seemingly late in reporting 28 financial transactions totaling up to $420,000 — an ostensible violation of the STOCK Act.
But his congressional office said conflicting guidance from the House Committee on Ethics caused Larsen to not report until last week stock trades he made as far back as 2020.
“In 2020, while setting up a managed IRA account to diversify his portfolio, Rep. Larsen received initial guidance from the House Ethics Committee that he did not need to file Periodic Transaction Reports because he did not control selection or trade of any security in the new portfolio,” Joe Tutino, a spokesperson for Rep. Larsen, told Raw Story in a statement.
RELATED ARTICLE: Can’t stop, won’t stop: Another congressman violates STOCK Act
“In 2022, upon reviewing Rep. Larsen’s draft financial disclosure, Committee staff informed him of updated guidance that required the representative to file a periodic transaction report to come into compliance with the STOCK Act. He worked with Committee staff to file the required periodic transaction report,” Tutino continued.
Larsen’s financial disclosure report, filed on May 26, noted stock transactions for Larsen’s individual retirement account across a variety of industries, including semiconductors, defense, pharmaceuticals, insurance and transportation. He traded individual stocks in companies that include Allstate, Bristol-Myers Squibb, CVS, Intel, Sempra, General Dynamics and Union Pacific.
Rep. Rick Larsen (D-WA) said the House Committee on Ethics gave conflicting advice on filing his financial disclosures. Chip Somodevilla/Getty Images
Larsen is a member of the House’s Transportation and Infrastructure Committee and is co-chairman of the U.S.-China Working Group.
All stock transactions were in the $1,001 to $15,000 range.
“This managed account within the RRL IRA was set up late 2020. At the time I received guidance that due to the account being one where I did not control selections or trades, I did not need to file PTRs. That guidance has since changed and am reporting per new guidance,” Larsen said in the report.
Tutino said Larsen is waiting to hear back from the House Committee on Ethics as to whether he must pay a fine.
“Rep. Larsen is committed to transparency. Rep. Larsen does not select or trade individual stocks, per his contract with his financial adviser, and he will continue to be prohibited, per contract, from making selection or trade of any security,” Tutino said. “Going forward, Rep. Larsen’s financial adviser will notify him of any actions relevant to STOCK Act compliance after the account manager takes the action, and Rep. Larsen will be reporting those actions in periodic transaction reports.”
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It is unclear whether the House Committee on Ethics considers Larsen’s late stock disclosures an official violation of the STOCK Act.
Tom Rust, staff director and chief counsel for the House Committee on Ethics, which is tasked with investigating alleged STOCK Act violations, said “no comment” when reached by Raw Story.
“It's hard to believe that he received guidance that you don't have to report a stock transaction just because you don't control this transaction because the law is written anticipating that you may not be the person making the transaction,” Payne said.
Payne said he was not aware of any changes to reporting policies outlined in the STOCK Act.
“It just strains credibility to think that the Ethics Committee advised anyone that there's an exception that doesn't exist, so this looks as though it was a violation of the rule,” Payne said. “Maybe he misunderstood it, but the rules haven't changed.”
Continued violations
Dozens of members of Congress have failed to comply with the STOCK Act. During the 117th Congress from 2021 to 2022, at least 78 members of Congress — Democrats and Republicans alike — were found to have violated the STOCK Act's disclosure provisions, according to a tally maintained by Insider.
Raw Story has this year identified 13 members of Congress, including Newhouse, who have broken the federal conflicts of interest law.
Last week, Raw Story reported that Rep. Adrian Smith (R-NE) was more than a year late disclosing up to $45,000 of his wife’s purchases of stock in CarterBaldwin.
Six representatives failing to report up to $376,280 in stock transactions in May were Rep. Jonathan Jackson (D-IL), Rep. Debbie Dingell (D-MI), Rep. Russ Fulcher (R-ID), Rep. Marcy Kaptur (D-OH), Rep. Deborah Ross (D-NC) and Rep. John Sarbanes (D-MD).
Raw Story identified other STOCK Act violators in recent weeks, including Rep. Zoe Lofgren (D-CA), with up to $265,000 in late financial disclosures, and Rep. Dan Bishop (R-NC), who was late in disclosing up to $5 million in U.S. Treasury note purchases.
Earlier this year, Raw Story also broke the news that Rep. Seth Moulton (D-MA) failed to properly disclose that his wife sold up to $100,000 worth of stock in gaming company Activision Blizzard in September 2022 and purchased up to $15,000 worth of stock in Amazon.com in August 2022.
Raw Story reported that Rep. Gerry Connolly (D-VA) was several days late disclosing that he had sold personal stock in an energy company and a pair of federal defense contractors. Sen. Tom Carper (D-DE) also violated the STOCK Act in March with a late disclosure.
Congressional stock ban efforts
The ongoing violations come at a time when a bipartisan group of lawmakers have introduced several similar bills aimed at banning congressional stock trading.
The most recent bill to be introduced this session — the Bipartisan Restoring Faith in Government Act — is co-sponsored in part by political rivals in Reps. Alexandria Ocasio-Cortez (D-NY) and Matt Gaetz (R-FL).
Other materially similar bills include the Ending Trading and Holdings in Congressional Stocks (ETHICS) Act, the TRUST in Congress Act and the Preventing Elected Leaders from Owning Securities and Investments Act.
“I think there's a strong possibility that the legislation on stock trading will move, especially when you keep seeing public concern about the noncompliance with the STOCK Act,” Payne said.
RELATED ARTICLE: ‘I mistakenly left it in draft’: Republican violates STOCK Act with up to $5 million in late disclosures
The STOCK Act was passed by Congress in 2012 to prevent insider trading, promote transparency and reduce conflicts of interest among federal lawmakers and other government officials.
In the decade since, the push for a total ban on lawmakers trading stocks while in office gained but then lost momentum last year when the Democratic-led House, then led by Speaker Emerita Nancy Pelosi, decided not to conduct a hearing on any of stock-ban bills and never brought it to the House floor for a vote.
News organizations including the New York Times, Insider, NPR and Sludge have documented rampant financial conflicts of interests among dozens of members of Congress, such as those who bought and sold defense contractor stock while occupying positions on congressional armed services committees or otherwise voting on measures to send such companies billions of federal dollars. The executive and judicial branches are riddled with similar financial conflict issues, too, as the Wall Street Journal has reported.
The Wall Street Journal won a 2023 Pulitzer Prize for its investigation into financial conflicts among officials who work in federal agencies while Insider won the Society of Professional Journalists’ Sunshine Award for its reporting on congressional financial conflicts.
The initial measure, aimed at preventing the tampering of vote data, passed in 2021 on a voice vote without debate, largely unnoticed, tucked into the sweeping voting law Senate Bill 1.
In February, Votebeat reported on the problems with the mandate and election officials’ growing concerns. This year’s legislative session was the best opportunity to amend the proposal before it took effect for the 2026 elections.
In March, state Sen. Bryan Hughes, a Republican, and other lawmakers filed legislation to amend the law, which, according to the secretary of state’s office, would have also required the purchase of new equipment for each election.
Hughes’ proposal to amend the provision — Senate Bill 1661 — was approved unanimously by both chambers. During a Senate committee hearing in March, Hughes said that there had been a “misunderstanding on the scope” of the provision, though he didn’t elaborate.
In April, during a Zoom call with members of the Texas Republican Party, Hughes — who did not respond to Votebeat’s multiple requests for comment — said “the media interpreted” the provision in Senate Bill 1 “as needing to replace equipment each election, and spending millions.”
”That’s silly, that’s not what the law says,” Hughes said. But election administration experts and county and state officials said that indeed the law would require a total replacement of equipment at a cost of millions of dollars. Hughes himself sponsored the legislation to change that.
When Hughes’ new bill goes into effect Sept. 1, county election departments will be able to continue to use the voting equipment they have without any additional costs to counties or taxpayers.
Election administrators who tried to sound the alarm on the problem without success in 2021 are relieved.
“It’s nice that, you know, the powers that be finally listened to what we’ve been saying all along on that issue,” said Chris Davis, who is the Williamson County elections administrator and a member of the Texas Association of Elections Administrators. The organization mobilized and reached out to lawmakers to make them aware of the provision’s implications. And, Davis said, Votebeat’s reporting also fueled the urgency that led to the corrective legislation.
“That article lit a fire under people’s butts, along with our concerns and complaints,” Davis said. “The biggest part of our outreach to lawmakers was our list of legislative priorities that we sent to them, our invited testimony in the House. And your coverage, that was a big part of it.”
When Sen. Bob Hall, supported by Hughes, first proposed the requirement in 2021, both legislators said it would prevent “cheating” and the “manipulation” of vote data stored in USB flash drives and taken from polling places to central counting stations — although there’s no evidence any such thing has ever happened.
The law prohibited counties from using reusable storage devices, such as the USB flash drives, which are certified by the secretary of state. The “once written, cannot be modified” requirement also prohibits the use of equipment such as ballot scanners and tabulating machines, all now used to count votes. The technology the law required, known as “write once, read many,” or WORM devices, generally refers to CD or DVD drives and the discs they burn data onto.
Votebeat reported that in order to fully comply, counties would have to buy entirely new voting systems for each election, since the whole point is that the equipment can’t be reused. The secretary of state’s office estimated that it would cost taxpayers more than $116 million to replace the eliminated equipment, plus an ongoing cost of more than $37 million every two years, since new equipment would have to be purchased for each election. And that’s only if counties could have found such equipment. Voting equipment that would match the requirements does not appear to have been invented by any election equipment company operating in the United States.
Hughes’ bill amending the provision requires that counties use storage devices, such as the secretary of state-certified USB flash drives, that, if manipulated or tampered with, would become unreadable once they’re entered into the tabulating machines used to count votes. This is equipment counties already have.
Natalia Contreras covers election administration and voting access for Votebeat in partnership with the Texas Tribune. Contact Natalia at ncontreras@votebeat.org.
Chalkbeat is a nonprofit news site covering educational change in public schools.
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