Speaker Nancy Pelosi on Congresspeople owning corporate stock: "We're a free market economy"

[lpetrich]

House Speaker Nancy Pelosi opposes banning stock buys by Congress members

House Speaker Nancy Pelosi scoffed Wednesday at the idea of banning congressional lawmakers and their spouses from owning shares of individual companies, despite the possibilities for conflicts of interest between their legislative duties and personal finances.

“No,” Pelosi, D-Calif., told reporters at a news conference where she was asked whether she would support such a prohibition.

“We’re a free market economy,” she said. “They should be able to participate in that.”

...
The Business Insider series found that 49 members of Congress and 182 senior-level congressional staffers had violated the so-called STOCK Act, which requires public disclosure by themselves and family members within 45 days of sales or purchases of individual stocks, bonds and commodity futures.

The Stop Trading on Congressional Knowledge Act, which became law in 2012, is supposed to prevent lawmakers and staffers from engaging in trading on information they glean from their jobs, as well as conflicts of interest.

Lucas Kunce on Twitter: "When asked about rampant insider trading in Congress, all Nancy Pelosi could say was, "We’re a free market."

All I heard was: "Let them eat cake."

Why are the rules harsher for you, me, and Martha Stewart than they are for the Speaker of the House? (vid link)" / Twitter

 

[lpetrich]

Walter Shaub on Twitter: "“Banning lawmakers, their top staffers, and their spouses from buying and selling individual stocks should be as non-controversial as crop rotation or pulling to the side of the street when an ambulance goes by.” (link)" / Twitter
then
Alexandria Ocasio-Cortez on Twitter: "There is no reason ..." / Twitter

There is no reason members of Congress should hold and trade individual stock when we write major policy and have access to sensitive information.

There are many ways members can invest w/o creating actual or appeared conflict of interest,like thrift savings plans or index funds

What’s worse is that many who engage in these practices publicly tout not approving cost of living or MRA increases in the leg branch as a way of claiming “fiscal responsibility,” yet compensate by engaging in this highly questionable trading. It incentivizes this bad behavior

Ppl rag on Congress’ salary &it’s easy to score political points on it, but many don’t know it requires paying 2 rents, can’t deduct work costs, etc

Result is grand gestures to tout that they/staff aren’t getting COLA adjustments, but then trading stock to make up for it -worse!

AOC Says She Doesn't Own Bitcoin to Do Her Job 'Ethically' - "AOC doesn't think members of Congress should be able to hold or trade digital assets given the nonpublic information they have."

On Monday, Rep. Alexandria Ocasio-Cortez clarified on Instagram that she does not hold any digital assets or tokens, including Bitcoin, and said she doesn’t believe policymakers should be able to hold financial products like stocks.

...
“Because we have access to sensitive information and upcoming policy, I do not believe members of Congress should hold/trade individual stock and I choose not to hold any so I can remain impartial about policy marking,” Ocasio-Cortez wrote on Instagram, answering a question about if she held any crypto. "I also extend that to digital assets/currencies (especially because I sit on the Financial Services Committee). So the answer is no because I want to do my job as ethically and impartially as I can," she added.

What a big difference between AOC and NP.

 

[laughing dog]

This idea is appealing when one does not really think about it.

Members of Congress face potential conflict of interests with any asset they may have. Holding funds in a bank vs a credit union poses a potential conflict of interest. Having a Visa as opposed to a American Express credit card poses a potential conflict of interest. Members of Congress with pension funds or mutual funds or IRAs from their other activities pose a potential of interest. Members of Congress who are farmers or lawyers pose potential conflict of interests.

This opens up a real nightmare of enforcement and equity issues.

Finally, I must say that not everything that comes out Ms. AOC's mouth is a good idea. The nasty implicit accusation that holding equity means one cannot perform their job as "ethically and impartially" as they can indicates to me that Ms. AOC is devolving into a reactionary puritanical prig.

 

[Don2 (Don1 Revised)]

Walter Shaub on Twitter: "“Banning lawmakers, their top staffers, and their spouses from buying and selling individual stocks should be as non-controversial as crop rotation or pulling to the side of the street when an ambulance goes by.” (link)" / Twitter
then
Alexandria Ocasio-Cortez on Twitter: "There is no reason ..." / Twitter

There is no reason members of Congress should hold and trade individual stock when we write major policy and have access to sensitive information.

There are many ways members can invest w/o creating actual or appeared conflict of interest,like thrift savings plans or index funds

What’s worse is that many who engage in these practices publicly tout not approving cost of living or MRA increases in the leg branch as a way of claiming “fiscal responsibility,” yet compensate by engaging in this highly questionable trading. It incentivizes this bad behavior

Ppl rag on Congress’ salary &it’s easy to score political points on it, but many don’t know it requires paying 2 rents, can’t deduct work costs, etc

Result is grand gestures to tout that they/staff aren’t getting COLA adjustments, but then trading stock to make up for it -worse!

AOC Says She Doesn't Own Bitcoin to Do Her Job 'Ethically' - "AOC doesn't think members of Congress should be able to hold or trade digital assets given the nonpublic information they have."

On Monday, Rep. Alexandria Ocasio-Cortez clarified on Instagram that she does not hold any digital assets or tokens, including Bitcoin, and said she doesn’t believe policymakers should be able to hold financial products like stocks.

...
“Because we have access to sensitive information and upcoming policy, I do not believe members of Congress should hold/trade individual stock and I choose not to hold any so I can remain impartial about policy marking,” Ocasio-Cortez wrote on Instagram, answering a question about if she held any crypto. "I also extend that to digital assets/currencies (especially because I sit on the Financial Services Committee). So the answer is no because I want to do my job as ethically and impartially as I can," she added.

What a big difference between AOC and NP.

One thing there is the usage of the phrase "individual stock." Most citizens who have retirement packages are passive investors who may or may not have different plans to invest in. Still, it sounds like "this is a free market" is a strawman argument, one in which congress critters could continue to act as expected by being passive investors in retirement.

On the opposite side of the spectrum could be, say, Diane Feinstein and her husband who is/was part owner of a defense company. For example, see this 2003 article:

Army contract for Feinstein's husband / Blum is a director of firm that will get up to $600 million

The award to help with troop mobilization, weapons systems training and anti-terrorism...

www.sfgate.com

 

[lpetrich]

Congress Members Are Trading Defense Stocks While Shaping Military Policy

At least 15 lawmakers who hold powerful positions on a pair of House and Senate committees that control US military policy have financial ties to prominent defense contractors that together were worth nearly $1 million in 2020, according to an Insider analysis of federal financial records.

And throughout 2021, both Democrats and Republicans serving on the congressional Armed Services committees have continued to invest in or cash out of the most important players in the military and defense industry.

The likes of Lockheed Martin, Boeing, Raytheon, Honeywell, General Electric, ...

Atop the list is the 16-term Rep. Jim Cooper, a Democrat of Tennessee who chairs the House panel's Strategic Forces Subcommittee. He reported owning up to $65,000 worth of stock in General Electric at the end of 2020, with up to $50,000 worth of it held in a tax-favored individual retirement account and up to $15,000 worth held in a brokerage account established for one of his children.

Referring to the House Armed Services Committee.

Some former military-contractor stockholders are Reps. Joe Courtney D-CT 8th term and Mikie Sherrill D-NJ 2nd term. JC is the head of the Seapower and Projection Forces Subcommittee.

The wife of Democratic Rep. Ro Khanna of California, Ritu Khanna, invested up to several hundred thousand dollars in a collection of defense contractor stocks at some point in 2020, including Boeing, General Dynamics, General Electric, Honeywell, Northrop Grumman, and Raytheon. Ro Khanna served on the House Armed Services Committee then, as he does now in his third term as a member of Congress.

While Ritu Khanna sold many of those stocks before 2021, she has made several four- or five-figure trades in Honeywell in 2021, according to federal financial disclosures.

"My wife has assets prior to marriage which are legally not mine, and it's not my place to tell her what to do with her separate assets," Ro Khanna told Insider.

They claim to have less than $1000 in military-contractor stock: Rick Larsen D-WA 11th term and oe Morelle D-NY 3rd term.

Several Republicans are also big military-contractor stock traders: Reps. Pat Fallon R-TX 1st term, Blake Moore R-UT 1st term, Austin Scott R-GA 6th term, Mike Gallagher R-GA 3rd term, Rob Wittman R-VA 8th term.

Across the Capitol, Republican Sen. Tommy Tuberville, a freshman of Alabama, reported owning nearly $200,000 worth of stock combined in Honeywell, Lockheed Martin, General Electric, Raytheon, and General Dynamics.

Tuberville also violated the federal Stop Trading on Congressional Knowledge Act of 2012 this year by disclosing nearly 130 stock trades weeks or months late.

Tuberville has continued trading defense contractor stocks during 2021, most recently on October 18, when he sold his stakes in General Dynamics and General Electric, each worth up to $50,000, according to federal records. Like Moore, Tuberville also trades heavily in Alibaba, buying and selling up to $215,000 in stock options on September 13.

He is a former college-football coach.

Other Senate military-stock owners: Jacky Rosen D-NV and Gary Peters D-MI, both of them junior members of the Senate Armed Services Committee.

 

[lpetrich]

One thing there is the usage of the phrase "individual stock." Most citizens who have retirement packages are passive investors who may or may not have different plans to invest in. Still, it sounds like "this is a free market" is a strawman argument, one in which congress critters could continue to act as expected by being passive investors in retirement.

On the opposite side of the spectrum could be, say, Diane Feinstein and her husband who is/was part owner of a defense company. For example, see this 2003 article:

Army contract for Feinstein's husband / Blum is a director of firm that will get up to $600 million

The award to help with troop mobilization, weapons systems training and anti-terrorism...

www.sfgate.com

AOC herself pointed out that there are ways to invest without creating potential conflicts of interest: "There are many ways members can invest w/o creating actual or appeared conflict of interest,like thrift savings plans or index funds"

 

[laughing dog]

One thing there is the usage of the phrase "individual stock." Most citizens who have retirement packages are passive investors who may or may not have different plans to invest in. Still, it sounds like "this is a free market" is a strawman argument, one in which congress critters could continue to act as expected by being passive investors in retirement.

On the opposite side of the spectrum could be, say, Diane Feinstein and her husband who is/was part owner of a defense company. For example, see this 2003 article:

Army contract for Feinstein's husband / Blum is a director of firm that will get up to $600 million

The award to help with troop mobilization, weapons systems training and anti-terrorism...

www.sfgate.com

AOC herself pointed out that there are ways to invest without creating potential conflicts of interest: "There are many ways members can invest w/o creating actual or appeared conflict of interest,like thrift savings plans or index funds"

Savings in any form that is held by some other institution opens one up to a potential conflict of interest.

 

[Loren Pechtel]

AOC herself pointed out that there are ways to invest without creating potential conflicts of interest: "There are many ways members can invest w/o creating actual or appeared conflict of interest,like thrift savings plans or index funds"

Yup. For the most part I think high officials should be required to put their investments into index funds. I would make an exception for an official with a substantial fraction of one company, they shouldn't be required to divest such an interest.

 

[RVonse]

This idea is appealing when one does not really think about it.

Members of Congress face potential conflict of interests with any asset they may have. Holding funds in a bank vs a credit union poses a potential conflict of interest. Having a Visa as opposed to a American Express credit card poses a potential conflict of interest. Members of Congress with pension funds or mutual funds or IRAs from their other activities pose a potential of interest. Members of Congress who are farmers or lawyers pose potential conflict of interests.

This opens up a real nightmare of enforcement and equity issues.

Finally, I must say that not everything that comes out Ms. AOC's mouth is a good idea. The nasty implicit accusation that holding equity means one cannot perform their job as "ethically and impartially" as they can indicates to me that Ms. AOC is devolving into a reactionary puritanical prig.

What did you think about Trump's supposed conflicts of interest? Was his performance fine with you since there would be no way to draw the line? And if not, then where would you and the rest of the liberals think the line be drawn? Because what is good for the Pelosi goose should be good for the Trump gander and the rest of us too.

If anything, some of the crap Trump pulled had much more integrity than the likes of Pelosi IMO. And that is saying something considering much of Trumps questionable deal making.. But at least with Trump, he had an already sucessful established business he simply wanted to continue. Contrast to Pelosi, who prefers keeping her quick get rich stock scam. Flipping the market on her insider knowledge..

IMO, ALL security transactions for all our political leaders (and especially the fed) should be looked at with extreme scrutiny by the SEC. These people have more insider knowledge than the CEO's of our largest corporations! Indeed, many times the CEO's are surprised and caught off guard by what takes place in congress.

Good for AOC, this is one of the times I agree with her!

 

[Metaphor]

I am sympathetic to nearly all the perspectives spoken about, but probably the least sympathetic to Pelosi's. But that's maybe just envy at her free market success. She has a $16,000 fridge and I don't even have a $16,000 car.

laughing dog is right that any investment, including not investing, could be seen as a conflict of interest. AOC is right that holding individual stocks (or the ability to buy individual stocks) creates insider knowledge opportunities. But her solution doesn't seem right either - an index/industry fund is less specialised, but also open to insider trading opportunities.

AOC kvetching about paying two rents whilst receiving triple the national median salary is a bit rich, though. You are not poor, AOC. Stop acting as if you are.

 

[Gospel]

$16,000 fridge

What's funny is not that this is bizarre to me, it's that someone out there considers this normal.

 

[Don2 (Don1 Revised)]

Need a fact check on aisle 5. Is this real?

Pelosi's fridge of posh ice cream blamed for hampering Dems in House election

A PROGRESSIVE group has blammed Nancy Pelosi’s sweet tooth as the reason why there was no “blue wave” in the election Pelosi appeared on James Corden’s Late Late Show on April 14 …

www.the-sun.com

 

[Loren Pechtel]

laughing dog is right that any investment, including not investing, could be seen as a conflict of interest. AOC is right that holding individual stocks (or the ability to buy individual stocks) creates insider knowledge opportunities. But her solution doesn't seem right either - an index/industry fund is less specialised, but also open to insider trading opportunities.

Restrict it to general index funds, not sector stuff. The only insider knowledge is things that will make the market go up or down. I would also subject them to the normal insider trade rules in most circumstances. Insiders are required to schedule their trades well in advance.

 

[Metaphor]

Need a fact check on aisle 5. Is this real?

Holy shit that story has the fridge priced at $24,000. What an insult to Pelosi for me to misremember her refrigeration rig as some poverty-class $16k clanker not fit to store the food of the domestics.

 

[laughing dog]

laughing dog is right that any investment, including not investing, could be seen as a conflict of interest. AOC is right that holding individual stocks (or the ability to buy individual stocks) creates insider knowledge opportunities. But her solution doesn't seem right either - an index/industry fund is less specialised, but also open to insider trading opportunities.

Restrict it to general index funds, not sector stuff. The only insider knowledge is things that will make the market go up or down. I would also subject them to the normal insider trade rules in most circumstances. Insiders are required to schedule their trades well in advance.

There would be potential conflict of interest on any law or regulation concerning index funds or the company's running them.

It is nearly impossible to avoid potential conflict of interest on the part of lawmakers.

I am much more in favor of draconian penalties for profiting from a conflict of interest. Something on the level of a fine equal to treble the profit and a lifetime ban from law making.

 

[Axulus]

Congressional bills can move the entire market positively or negatively. Limiting members of congress to index funds doesn't remove this potential conflict of interest.

 

[Axulus]

laughing dog is right that any investment, including not investing, could be seen as a conflict of interest. AOC is right that holding individual stocks (or the ability to buy individual stocks) creates insider knowledge opportunities. But her solution doesn't seem right either - an index/industry fund is less specialised, but also open to insider trading opportunities.

Restrict it to general index funds, not sector stuff. The only insider knowledge is things that will make the market go up or down. I would also subject them to the normal insider trade rules in most circumstances. Insiders are required to schedule their trades well in advance.

There would be potential conflict of interest on any law or regulation concerning index funds or the company's running them.

It is nearly impossible to avoid potential conflict of interest on the part of lawmakers.

I am much more in favor of draconian penalties for profiting from a conflict of interest. Something on the level of a fine equal to treble the profit and a lifetime ban from law making.

How do you define profiting from a conflict of interest? Does a yes vote on a stimulis bill where, when it passes, causes the entire stock market to react positively, constitute profiting off a conflict of interest when one owns any stock whatsoever?

 

[laughing dog]

laughing dog is right that any investment, including not investing, could be seen as a conflict of interest. AOC is right that holding individual stocks (or the ability to buy individual stocks) creates insider knowledge opportunities. But her solution doesn't seem right either - an index/industry fund is less specialised, but also open to insider trading opportunities.

Restrict it to general index funds, not sector stuff. The only insider knowledge is things that will make the market go up or down. I would also subject them to the normal insider trade rules in most circumstances. Insiders are required to schedule their trades well in advance.

There would be potential conflict of interest on any law or regulation concerning index funds or the company's running them.

It is nearly impossible to avoid potential conflict of interest on the part of lawmakers.

I am much more in favor of draconian penalties for profiting from a conflict of interest. Something on the level of a fine equal to treble the profit and a lifetime ban from law making.

How do you define profiting from a conflict of interest? Does a yes vote on a stimulis bill where, when it passes, causes the entire stock market to react positively, constitute profiting off a conflict of interest when one owns any stock whatsoever?

You raise a good point - defining what constitutes a conflict of interest. I think your example is a bit of a stretch on a conflict of interest. I think whatever the definition, the penalty should be severe.

 

[ZiprHead]

i think just reinforce insider trading rules in the congress and law. Right now it's nearly impossible to prosecute congress critters for insider trading because they've made themselves exempt by law.

 

[Loren Pechtel]

Congressional bills can move the entire market positively or negatively. Limiting members of congress to index funds doesn't remove this potential conflict of interest.

But the possible benefit would be so low that I don't think it matters, especially if you apply the normal insider rules of announcing trades well in advance.