“We don't want people in Congress trading stocks, playing the stock market. That's, if you will, the sheep's clothing over this wolf piece of legislation,” Romney said at the meeting. “What you're not talking about is that this has been drafted in a way that is really quite thoughtless, which is it requires divestiture for people who want to become a congressperson or president or vice president.”
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Romney continued, “Have you thought about Donald Trump? For instance, under this bill, he couldn't become president. I mean, he'd have to sell all of his Truth Social stock. He'd have to sell all of his private investments. This basically would prevent Donald Trump from becoming president if he wanted to maintain his financial assets without getting completely obliterated.”
The bill in question, an amended version of the Ending Trading and Holdings in Congressional Stocks (ETHICS) Act, ultimately passed out of committee with an eight to four vote, with Republican senators divided on how to proceed.
Raw Story found dozens of legislators who violated the STOCK Act since January 2023, and several other members of Congress have made stock trades that conflict with their official responsibilities, such as lawmakers who trade defense contractor stock while sitting on a congressional committee with defense oversight responsibilities.
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But not all lawmakers believe a congressional stock ban is the answer, and Wednesday’s committee vote came after Republicans sparred over whether Congress should force key federal officials to divest of their existing stock holdings (and Trump to divest his if he becomes president again next year).
“While lots of people are going to vote for it because they want to be on record for opposing people trading in the stock market, that's not the problem with the bill, and it was not drafted in a way to focus on the real problem or potential problem,” Romney said. “It was drafted in a way to be punitive and to keep Donald Trump from being president.”
Romney — long a Trump critic who said he won’t vote for the Republican nominee — later pointed out that Trump owns 114 million shares of Trump Media and Technology Group, Corp, worth $3.776 billion, saying divesting of that would be “a massive disadvantage for him.”
Sen. Rand Paul (R-KY) called the idea of legislators divesting of their ownership in businesses with more than 1,000 employees “insane,” noting that the bill calls on that to happen. The bill, Paul added, is “criminalizing everybody who wants to own stock.”
Sen. Ron Johnson (R-WI) chimed in to support Romney’s comments, saying he came into the meeting “happy to vote yes on this self-flagellation.” Johnson said he divested of his securities when running for office, considering it to be the “honorable thing to do.”
Kiersten Pels, a spokesperson for Johnson, told Raw Story via email that the senator "views the ETHICS Act as 'self-flagellation' as there are already insider trading laws in effect, and bills further limiting members’ ability, and those of their spouses and dependent children, to own securities and assets, like private business interest, are just needless punishment for serving in Congress."
Johnson believes the bill's requirements would "disincentivize potential candidates from running for office if they cannot afford to support themselves or their families on just the salary for members," which includes expenses for housing in Washington, D.C., Pels said. The salary for senators is generally $174,000 per year.
"Senator Johnson could support the bill if it was amended to target the specific problem the bill’s sponsors claim to want to address — insider stock trading by Members—which is already illegal," Pels said.
Johnson, one of the richest members of the Senate, with a net worth of more than $39 million in 2018, according to Open Secrets, voted "no" during the meeting.
“You know how much I've lost in terms of opportunity cost since that point in time,” Johnson said. “We don't want to turn Congress into a rich man's club."
Sen. Josh Hawley (R-MO), a co-sponsor of the bill, argued with his Republican colleagues who challenged the bill, saying “there's always an excuse for why we can't do a stock trade bill. I've heard this for years.”
“Congress is a rich man's club. That's the problem. That's what we're trying to fix,” Hawley said.
Hawley expressed his “100 percent” commitment to passing a congressional stock trading ban and expressed willingness to continue working through the specifics of the bill despite committee colleagues “who have never supported and are never going to support a stock trade ban.”
“Listen, the American people look at people like the former Speaker of the House, who makes better returns than anybody in America. They look at senators who were investigated during the Covid pandemic for their miraculous stock trades, and they say, ‘how is this possible?’” Hawley said. “To think that this might become a problem in the future is, frankly, fanciful. It's a problem now.”
Indeed, numerous members of Congress continue to trade individual stocks and fail to abide by the rules contained within the Stop Trading on Congressional Knowledge (STOCK) Act, which requires members of Congress to publicly report within 45 days most purchases, sales and exchanges of stocks, bonds, commodity futures, securities and cryptocurrencies.
The 12-year-old law intended to curb insider trading, prevent conflicts of interest and provide more transparency to the public about members of Congress’ personal finances.
Former Sens. Dianne Feinstein (D-CA), Kelly Loeffler (R-GA), Jim Inhofe (R-OK) and Richard Burr (R-NC) were all federally investigated for suspiciously timed stock trades during the height of the COVID-19 pandemic, although none were charged with crimes.
Romney on Wednesday pushed to delay the committee vote on the bill by a week and presented an amendment that would remove the requirement for candidates for Congress or the White House to divest from their assets obtained before coming into office. The amendment was not adopted, with six senators voting in favor of it and nine against.
“Voting today is very awkward because I'm not going to vote for this bill the way it is with the divestiture provision,” Romney said.
Sen. Roger Marshall (R-KS) acknowledged his Republican colleagues’ concerns but expressed his continued support of the bill, expressing the desire for legislators’ spouses to immediately be banned from stock trading. Marshall was previously 17 months late in disclosing three of his dependent children’s stock trades, valued up to $45,000, Business Insider reported.
As currently written, Ending Trading and Holdings in Congressional Stocks (ETHICS) Act, proposes an immediate ban on members of Congress buying stocks and would prohibit them from selling stocks 90 days after enactment. Members’ spouses and dependent children would be prohibited from trading stocks starting in March 2027, which is when the president and vice president would also be required to divest from covered investments.
Covered assets include securities, commodities, futures, options and trusts. Congressional staff members would be allowed to continue trading stocks under this bill as would legislators' non-dependent children.
“I would be impacted by the current legislation and have to divest myself of companies that we own prior to getting here … but I think this is so important we need to move forward,” Marshall said.
Ahead of the committee meeting, ETHICS Act co-sponsor Sen. Jeff Merkley (D-OR) told Raw Story in a phone interview that the timing was right to pass a ban on stock trading legislation, something he has worked at for 12 years.
“This markup showed there is strong bipartisan momentum to get legislation banning Congressional stock trading to the President’s desk," Merkley told Raw Story in a statement. "The ETHICS Act’s strength comes from the fact that it is not written to accommodate any specific circumstance that would create loopholes for any individuals. If this solution is good enough for Members of Congress, it should be good enough for any candidate for president.”
Hawley posted on X after the hearing, “Members of Congress should be focusing on the American people's business — not trading stocks for their private gain. The Homeland Security Committee got it right today by passing my bill to BAN Congress from stock trading. Now send it to the Senate Floor!”
Sens. Jon Ossoff (D-GA), a co-sponsor of the bill, called Wednesday's vote “a historic moment in efforts to reform the ethics laws that govern Congress.”
Sen. Jon Ossoff (D-GA). (Shutterstock)
“Georgians overwhelmingly agree that Members of Congress should not be playing the stock market while we legislate and while we have access to confidential and privileged information,” Ossoff said in a statement. “This is long overdue and necessary, and today we made historic progress passing my bipartisan bill out of Committee.”
"The people we represent deserve to have complete confidence that their federal elected officials are working in Americans’ best interests, and not their own personal financial interests,” said Chairman Gary Peters (D-MI), another co-sponsor of the latest bipartisan version of the ETHICS Act, in a press release. “By passing this legislation out of committee with bipartisan support, we have taken a monumental step towards getting this bill one step closer to becoming law and finally barring bad actors from taking advantage of their positions for their own financial gain.
Romney, Paul and Marshall also did not respond to Raw Story’s request for comment, nor did a spokesperson for Trump’s campaign.
Numerous bills have been introduced in recent years to effectively ban stock trading for members of Congress or increase the penalties for violations.
None have yet gotten a floor vote, and during the past three years, former House Speaker Nancy Pelosi has been one of the biggest obstacles to previous stock ban bills advancing.
To date, President Joe Biden has been all but silent on whether he supports such a stock ban. But Merkley said he’s confident that the president, who on Sunday announced he would no longer seek reelection, will back it.
“I cannot imagine a world in which he wouldn't sign legislation that bans stock trading,” Merkley said.
This story was updated with comments from Sens. Gary Peters (D- MI) and Ron Johnson (R-WI).
Source: Federal Election Commission