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Congress passed the “Stop Trading on Congressional Knowledge Act of 2012,” known as “the STOCK Act,” to combat insider trading and conflicts of interest by lawmakers; among its provisions, the law requires prompt and public disclosure of any stock trade made by officials, their spouses or their dependent children.
TRENDPOST: The STOCK Act figured in another Trends Journal article not long ago; see “GEN Z USING LAWMAKERS AS STOCK ORACLES” (28 Sep 2021). Many of our lawmakers, it would appear, do a good bit of stock trading (or their spouses do), and their trades often seem to be informed by an uncanny knack for knowing how stocks will move; see, also, “PELOSIS PROFIT FROM PENTAGON SWITCH TO AMAZON” (13 Jul 2021).
Now an investigation by Business Insider, called the “Conflicted Congress Project,” with results published on 13 December, rates every member of Congress on his or her financial conflicts and transparency, and finds that 52 of them have violated the act.
The violations exposed among members of Congress almost pale in comparison to those committed by their various staffers, such as chiefs of staff, legislative directors, communications directors and other professional staff members. Such staffers not only influence the lawmakers they serve, but they also are in contact with lobbyists and representatives of special interests, and their own investments are subject to disclosure laws.
182 such staffers were found to have violated those disclosure laws.
Many of the violations amounted to late filings of disclosure statements; such late filings were regularly committed by roughly equal numbers of Republicans and Democrats.
Excuses for violations included claiming to not understand the rules, claiming clerical errors, and blaming accountants, financial advisors and even spouses.
The rules do tend to be murky, enforcement spotty, and penalties minimal, often just $200. There are liberal “grace periods” for violators, and the Senate Select Committee on Ethics often waives penalties in cases where “a reasonable excuse” is presented. Prior to the Business Insider investigation, very few disclosures were available to the public, nor were they required to be.
The Business Insider concludes that, although greater transparency is desired, it’s unlikely because of privacy concerns and the potential that publicly-accessed disclosure statements might enable abuse of the information revealed.
Two bills reintroduced this congressional session could make the STOCK Act stronger: one, the Transparent Representation Upholding Service and Trust (TRUST) in Congress would require all assets of lawmakers, their spouses and dependent children be placed in blind trusts, out of the lawmakers’ and families’ control; the other, the Ban Conflicted Trading Act, would simply bar members of Congress and their staffers from buying individual stocks. Both bills have “languished,” with no votes or formal hearings on them appearing imminent.
TRENDPOST: One would have to have a Pollyanna-ish sense of idealism (and perhaps be deaf and blind) to avoid being deeply cynical and depressed at the level of hypocrisy exhibited by what has become our ruling class, particularly if one has been reading Trends Journal; consider, for example:
- “ETHICS? WE’RE JUDGES. WE DON’T NEED NO STINKIN’ ETHICS!” (26 Oct 2021)
- “SUSAN RICE: WORTH $37.9M, PLUS VAX DRUG STOCK” (30 Mar 2021)
- “WALL ST. CRIME GANG” (23 Nov 2021)
- “VAX DRUG GANG ON PARADE: FOLLOW THE MONEY” (14 Dec 2021)
- “BIG PHARMA BRIBES U.S. POLITICIANS. MORONS CALL IT ‘CAMPAIGN CONTRIBUTIONS'” (28 Sep 2021)