Dozens of members of Congress have
violated a law — the Stop Trading on Congressional Knowledge Act of 2012 — that’s designed to stop insider trading, curb conflicts of interest and enhance public transparency.
Many more make personal stock trades that conflict with their public duties, such as lawmakers to buy and sell defense contractor stocks while overseeing the flow of taxpayer money to defense contractors.
But last year, then-House Speaker Nancy Pelosi and other Democratic leaders declined to advance any of several bills — including one sponsored by Rep. Abigail Spanberger (D-VA) — that would have addressed these ongoing problems.
Raw Story spoke at length with Spanberger about her renewed push to ban members of Congress and their immediate daily members from trading individual stocks and cryptocurrency.
The three-term congresswoman, who this congressional session herself entered Democratic House leadership after winning a competitive race in November, dished about Pelosi, current House Speaker Kevin McCarthy and her unlikely political partnership with one of Congress’ most conservative members, Rep. Chip Roy (R-TX).
Spanberger also makes the case for why she believes her reintroduced congressional stock ban bill has a solid chance of advancing in a split Congress, where Democrats control the Senate and Republicans control the House.
This interview has been lightly edited for length and clarity:
Dave Levinthal, Raw Story editor-in-chief: Why introduce a congressional stock ban bill again now? And what hope do you have that there's going to be anything better than a slow, drawn out process for this bill advancing forward?
Rep. Abigail Spanberger (D-VA): It's a new Congress. We want to go forward. Got to reintroduce it. Introducing it early for us is part and parcel of making sure that people continue to know what a priority it is for me and for [Rep.] Chip [Roy], both. In terms of what my expectations are: Apart from the fact that voters respond positively to it, constituents respond positively to it, people across the board are interested in this policy reform. I think we also very much see more and more legislators really getting on board. We ended at more than 75 co-sponsors last Congress. We had started with about ten original co-sponsors. We've been building out more. Four different offices reached out to us on the day that we introduced it to say that they wanted to get on board as well. So we're really seeing the traction and the movement. And notably, now-Speaker McCarthy, when he was Minority Leader McCarthy, said some pretty positive things about the legislation. He indicated his support, at least for the principle of banning members of Congress from trading stocks. Now, notably, there was also a lot of public reporting on all of the things that the former speaker [Nancy Pelosi] had said. So, you know, there's a world in which he was being political. But I'm going to choose to take him at his word when he says he supports something as straightforward as this.
Levinthal: Kevin McCarthy, of course, has been a fairly busy man this month — fair to say. But have you had any personal conversations with him about this topic?
Spanberger: I haven't. Not yet, not yet. I wasn't about to vote for him for speaker. So I figured anybody who is willing to make that deal probably got first dibs on catching up with him. But certainly, I will plan to do that into the future.
Levinthal: One thing a lot of our readers have asked is a very basic question: Why didn’t some version of your bill, or the Democratic leadership backed bill from September, ever get a vote in Congress last session. Why did nothing, in any form or fashion, ultimately get to the floor for a vote?
Spanberger: Because the leadership bill — and I'll use of air quotes — it wasn't a good faith effort. It wasn't a piece of legislation that actually did what we want to do ... Our bill ultimately didn't get a vote because the folks who had the power to bring it for a vote didn't want to bring it for a vote. I do think that notably, there's new members of Congress on our side of the aisle, most definitely ... who actually campaigned on this legislation. So, there's a real interest — and I don't know if the word is 'excitement,' but commitment to the principle, at least. Not just among people like Chip and me and the folks who have really been championing this legislation since we first introduced it in 2020, but also quite a few of our new members who believe in it as a reform. That's at least on the Democratic side of the aisle. But when you look at the mix of people that we've got on both sides of the aisle, Democrat and Republican, we do have a good mix of people really across the ideological spectrum. You know the players well. I mean, we've got Scott Perry and Adam Schiff, right? We've got Matt Gaetz and we've got Barbara Lee. Now they've come up before on some authorization of use of military force. But it's that interesting kind of sweet spot where people who might disagree with each other on just about everything else — this is a piece of legislation that they agree on.
Levinthal: One more question about the past, and then I'll move forward back to the future. Who truly is responsible for the bill, or any of the bills, not coming to the floor last session? Was it then Speaker Nancy Pelosi? Was it Steny Hoyer? Representative Zoe Lofgren? All of the above?
Spanberger: If I may, I'll just answer the question in the reverse. Any of the people you've named could have really aggressively forced votes to come to the floor, and none of them took that action. So whether it was intentional — 'no, we don't want this bill to move forward'? Perhaps it wasn't. But really, any of those people that you just mentioned could have been the leaders in bringing it forward had they wanted to.
Levinthal: You mentioned sort of the odd political friendships, bedfellows, who have coalesced around the idea of having a congressional stock ban. Talk a little bit about your relationship with Chip Roy. How do you guys work together and press this issue forward when at least it seems, from a reporter's vantage point, that you don't have commonality around many, if any, other issues.
Spanberger: Yeah, that's true. Can confirm. (Laughter.) You know, he was talking with me the other day about this one issue that he wanted to work on. He was like, 'Come on, give me work on this?' And he starts going down the path of what it is. I'm like, 'I think we're just gonna have to stick to stocks right now. I think that's where we're going to have to live.' The two of us, we have long had a personal friendship. We both went to [the University of Virginia], we like UVA basketball, we became friends when UVA was doing really well in the basketball playoffs and he was wearing a UVA tie. We have the same birthday. There's, you know, charming little similarities. He grew up in Virginia. He knows my district very well — he grew up north of my district and then lived for a time south of my district. So, you know, we've had some nice commonalities that have allowed us to just be very friendly with each other. So, on this legislation, we're both truly committed to it. 'Pragmatist' is not always the word I might always use to describe Chip Roy, but he's actually pretty pragmatic on this. We have had conversations upon conversations about, 'What are the principles?' We wrote the legislation based on our research, based on our team's research, based on our work, based on our assessment of the problem and what we were trying to solve for anyway made sense to us. And we keep telling people who come to us, 'Listen, if you have an idea for how to make this better, if you have an amendment that addresses a circumstance we haven't conceived or a solution for how to make this legislation better, please bring it to us.' Because we want to see, at the end of the day, a bill that bans members of Congress, their spouses, their dependent children from selling or buying individual stocks. And if there's ways that we can get to that goal by making some tweaks to our legislation, having more clarifying language, etc., etc., that's what we want to see happen. And so we have really pretty constant communications around how to move this forward. He's certainly brought some co-sponsors to the bill. I've brought co-sponsors to the bill. And it truly — really, really — has been a strong partnership.
Levinthal: I trust there's some Democrats who might question whether you should be working with, in their opinion, 'someone like Chip Roy.' What would be your argument back as to why there's a political, or a policy or a legislative advantage to doing so?
Spanberger: This is a reform. My first response back is, 'Do you agree with this reform? Do you think this is an important reform?' And when I have gotten pushback like you're describing, I've never heard someone say, 'no,' I've always heard someone say, 'Yeah, but could you have somebody who is not Chip Roy?' My response is: 'But doesn't it show that even though we disagree on 100 different things and have very different kind of notions of what it is to be a member of Congress and what it is to be part of governing the United States of America, the fact that we agree on this actually makes this bill stronger.' There are some Democrats — I agree with them on all sorts of other policies — and they're not with me on this legislation. And there are Republicans who also disagree with Chip Roy on a whole host of things, but are with him on this. My argument here is — it truly, I think, speaks to the type of legislation. And frankly, this is what governing is about, right? We have to find the places of commonality. And I give him credit: His people back home are very much like, 'Abigail Spanberger, are you kidding me?' They may have the same reaction to me that, you know, some of my bigger supporters might have to Chip. Again, to his credit, the two of us have sat down and said, 'what are the areas where we do agree?' I'm sure he's back home telling people, 'Look, I disagree with her on this and this and this and this, but this is the legislation we agree on and this is how we get it across the finish line.
Levinthal: A U.S. House controlled by Republicans, a US Senate controlled by Democrats. Does that divided power make it more likely, less likely, or about the same for this legislation to advance?
Spanberger: It's probably a wash. I could be wrong on that. I think it just matters whether or not we've got a House speaker who's willing to bring it up. That's really kind of what it comes down to. To my knowledge, [Senate Majority Leader Chuck] Schumer has spoken, generally speaking, relatively positively about the premise of banning lawmakers from trading stocks. While he hasn't necessarily commented on a particular piece of legislation — and, of course, there are multiple pieces of legislation in the Senate — he has indicated an overall willingness to accept the notion, or the principle, of this legislation. I think that's good on the Senate side. So, then it just becomes a question of — when McCarthy was saying that he supported this legislation — was he being sincere? And what does that look like? And I am hearing some positive indicators from Chip related to the willingness of the House Admin Committee to have, as I would classify it, a slightly more earnest committee hearing of this legislation. And so that's really important to step forward.
Levinthal: Why do you think President Biden has not given this issue more of a tailwind or even spoken much about it at all?
Spanberger: I would be guessing if I answered your question, but I will guess: There's a lot going on in the world, and while this is a very national issue, and while this is something that I hear about across my district, it also does feel hyper local. So it's one thing for legislators to speak about things and changes that they want to make to the legislative branch. Of all the things that the president has to talk about in a day, this is probably not the most obvious or even the sort of punchline-y type thing. But I don't think he's ever said anything that indicates that he would oppose it or that he would think it's a good idea.
Levinthal: Congress has a relatively important role to play when it comes to the funding of our military. And defense contractors, of course, stand to benefit, to a great deal, based on the decisions of Congress. And yet members of Congress are buying and selling lots of stock in Raytheon and Lockheed Martin and General Dynamics and Boeing. Absent a ban, what would be your hope or wish for members of Congress when it comes to voluntarily engaging in stock trades that involve defense contractors, specifically?
Spanberger: When the announcement was made that apparently Speaker McCarthy had said he was going to cut defense spending by $75 billion — this proves the point, right — the defense sector stocks tanked for a day. So I think that speaks to the fact that our words, our pronouncements, impact the market. Not to mention our votes and the money that we are directing, frankly, to these defense contractors. To answer your question, I think people should be compliant with our legislation. And the challenge, here, becomes difficult, right? Because it's always a good market bet to invest in defense contractors. Lockheed is generally going to do well. Boeing is generally going to do well. So then it becomes a difficult thing where, you know, someone can easily say, 'Of course I support American made products, and I support American industry. Why wouldn't I invest in Lockheed?' But then it becomes the overlay of, 'Yeah, but did you know what was coming up? Did you know where some of the money and some of the development [were going?] Like, if you know you're funding X-Y-Z programs and those programs [involve] Lockheed products or Lockheed work, it becomes really mushy because — and this is the problem — it's totally defensible. It's totally reasonable that a member of Congress would own stock in any of these companies, right? Like, they do good work. They are major drivers of the U.S. economy. I mean, especially in Virginia. But to somebody sort of looking at it from a distance — and that somebody being your average American citizen who already maybe thinks that Congress is just a bit of a mess — how does that not seem just improper? It just doesn't really pass the smell test because, you know, you're going to vote on something. You're pushing money to defense contractors. It's just — yecccch. If we can avoid a circumstance where the American people have too many of those "I-don't-know-about-those-guys' moments, that is, in my opinion, good for democracy. Our bill —I would call it generous. Like, go invest in ETFs. Go invest in mutual funds. You can even sort of skew toward sectors with your ETFs obviously, so do that. But it's very different from, 'OK, we know we're sending X-Y-Z aid to Ukraine, that means we're going to have to up our dollar investment in A-B-C [defense] company.'
Levinthal: Then-Speaker Pelosi herself back in December 2021 provided the devil's advocate position. To paraphrase, she said that it's a free market economy, that members of Congress should have the right to participate in it. So why should members of Congress not be able to participate in the free market economy like any American when it comes to specific individual stocks? What's so important about individual stocks versus an exchange traded fund or something similar?
Spanberger: First I would argue the premise of the question — not aggressively with you, but the speaker's comments. It's not like any other American. Because, in fact, if you worked in the executive branch, you're limited on what you can do with individual stocks and the holdings you can have. If you're a journalist for certain news outlets and you predominantly cover financial industry news, you're limited. If you work on Wall Street, you're limited. If you're a CEO of a company, you're limited ... If you're CEO of a company, there's really strict guidelines about when you're allowed to sell your stock holdings in a declaration you have to make and all of those sorts of things. But that's a private sector job, right? This is a position of public trust. In my background in public service as a law enforcement officer, as a CIA officer, I submitted to full-scope lifestyle polys, where you sit down in a chair, they strap you to the chair and they ask you invasive questions about every aspect of your life. And that — totally — my right to privacy did not exist. Right? I mean, any foreign national friends you had, you had to declare. Any travel, you had to declare. And so, I think there are certain things that you accept when you accept a certain role — and particularly a role of public trust — that is part and parcel of being in Congress. I mean, I can't go to the grocery store without getting recognized. I signed up for that. If I don't want that reality, then I shouldn't have run for Congress. If the idea that, while you have a busy job representing 800,000 people, you want to moonlight as a day trader or you want to dabble in the stock market, and that enough to be a make or break in your decision to run for Congress, then ... maybe just stick to what you're doing. People across all sorts of sectors have limitations put on them based on even just the basics of — first responders who work nights and weekends and holidays. I mean, come on. People make all sorts of, quote unquote, "sacrifices". And I have very little sympathy for anyone who thinks that giving up the ability to buy or sell individual stocks is a sacrifice.
Levinthal: Cryptocurrency has factored into some of the ban proposals that have been floated, not in others. Make the argument for or against why members of Congress should — or should not — be able to invest in Bitcoin or Ethereum or any of the other tokens that exist.
Spanberger: Within our bill, it does apply to crypto. I welcome an argument against it or somebody just wants to make an argument that perhaps we should do it differently. But from my perspective — especially with a newer growing industry that has been in the news kind of in the space of us, Congress, and the United States government trying to figure out how to regulate crypto or not regulate crypto, and, of course, we know the FTX disaster — it just doesn't make sense. Essentially, what will be the day trading of the future, or for some people who are already participating in crypto markets is the day trading reality ... it should be treated as individual stocks, in the same way that we treat individual stocks. Now, if someday there's some majorly diversified funds across various different types of crypto, then, you know, maybe that's treated similarly to mutual funds. But for the moment, if you can go out and buy this crypto or that crypto ... from my perspective, and this was the perspective when we wrote the legislation, it's the same as buying stocks in GE or stocks in X-Y-Z pharmaceutical company.
Levinthal: Blind trusts. This became kind of a hot issue a few months ago when the Democratic leadership bill was floated and there was criticism by some ethics groups that there's never going to be a blind trust that is truly blind. Do you agree with that? And if not, why are blind trusts not a solution, at least in terms of lawmakers being able to hold and trade individual stocks that might go into one.
Spanberger: If people don't like the notion of blind trusts, I welcome full diversification. I would be totally in favor of a bill where we said, 'You come to Congress, you divest your stocks, throw it into mutual funds, throw it into ETFs, those are your options.' I'm OK with that. The choice to allow for blind trusts is a choice trying to be responsive to members who do come to Congress with significant stock holdings, and for whom they don't want to simply diversify. Now, blind trust can be challenging to set up. It's not an easy thing to set up. They cost money to set up ... As far as the argument about, 'Is a blind trust a blind enough blind trust?' there's an element of that which I don't think is a very earnest argument. It's a really easy way to say, 'Oh my gosh, we're not gonna be able to have a blind trust that's really blind, truly, truly blind — whatever — like a double blind, triple blind, quadruple ... like they're just making stuff up at that point. The 'ultra, ultra blind trust.' I have heard some people say, well, to make it truly law and you have to divest all of your assets and just give your money to a money manager and then they roll it into whatever they roll it into. That's a silly thing because if you're going to do that, you may as well just make your own financial choices, divest your stock holdings and throw them into mutual funds or ETFs of your choice. Really, what people are missing the point on: The stock holdings are not what I have a problem with and not what we're trying to solve for ... What is different is we have briefings on Ukraine, we have briefings on COVID. And the people go out and say, 'Ooh, this pandemic thing that they're talking about, or this illness in China, and these nursing homes in Washington state — like, this could really be a thing. I'm going to go buy stock in pharmaceutical companies. I'm going to go buy stock in Clorox. I'm going to go buy stock in Zoom because this isn't ending anytime soon. It's the buying and selling that's really the problem. Like, 'Oh, my gosh. There was a big natural disaster. We know where the federal funds are going to go, let's buy stock in the companies that are going to be doing response or response related things.' Or we're having a classified briefing and saying, 'It's not a question of when Russia invades Ukraine — they will — it's a question of when, and p.s., these are going to be the forms of military aid they're going to need.' And someone leaves that briefing and calls their broker and says, stock up on X-Y-Z defense contracting stocks. Those are the problems. What you hold, for me, is actually ... they're conflicts, but that's not the place where you are making choices based on information that other people don't have. You have lunch with a CEO and he was like, 'Yeah, things have been tough for us,' and you leave the lunch and dump your stock. Or conversely, 'Oh, can't tell you it is, but we've got some exciting news on the horizon,' and you leave that lunch and you buy stock.
Rep. Abigail Spanberger (D-VA) is leading an effort to ban members of Congress from trading individual stocks. Win McNamee/Getty Images
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