Lofgren signals that stock trading ban will include Supreme Court justices
Rep. Zoe Lofgren (D-Calif.) signaled in a letter to colleagues that legislation banning congressional lawmakers from trading stocks will include Supreme Court justices.
Lofgren, the chair of the House Administration Committee, outlined a framework for “Combating Financial Conflicts of Interest and Restoring Public Faith and Trust in Government” in Thursday’s letter, with the first prong pertaining to a stock trading ban for “senior government officials,” their spouses and their dependent children.
That group of officials, according to Lofgren, includes members of Congress and the Supreme Court.
If enacted, individuals subject to the ban would be prohibited from investing in securities, commodities, futures, cryptocurrency and other similar investments and be banned from shorting stocks. Investments in diversified mutual funds, exchange-traded funds, widely held investment funds and U.S. Treasury or state and local government bills, notes or bonds would, however, be allowed.
Officials would have the choice of divesting their holdings or placing them in a qualified blind trust.
Lofgren’s framework comes as the House is preparing to consider a lawmaker stock trading ban next week, after months of deliberations on the topic. But it was unclear if Supreme Court justices would be included in the ban.
The push for such a prohibition gained supporters on Capitol Hill after reports surfaced that members violated laws meant to prevent financial conflicts of interest.
Earlier this month, The New York Times published an extensive report that found nearly 100 lawmakers or their family members made financial trades in the past three years that may be conflicts of interest.
Speaker Nancy Pelosi (D-Calif.) threw her support behind a lawmaker stock ban in February, a reversal of her previous opposition to the push, while also floating the idea of including the judiciary in any reforms made to financial reporting requirements.
Under current law, Supreme Court justices are permitted to trade stocks, which some say could pose a conflict of interest.
Lofgren in Thursday’s letter said she will introduce legislation reflecting her four-point framework.
“A number of bills that have been introduced to date address some of these issues and include thoughtful proposals, but no one bill addresses each of these four elements with this level of detail. I will soon introduce legislative text for a bill built on this framework for reform,” the California Democrat wrote.
“Many Members have already concluded that reforms are necessary. I agree,” she added.
Lofgren’s framework also calls for increasing the “granularity” of financial disclosures by asking for more specific information. It would additionally require electronic filings of all financial disclosure filings from all three branches of government.
Thirdly, the framework would increase penalties for failure to comply with financial disclosure requirements and implement additional fines that would be tied to the sum of assets or transactions that violated rules.
The fourth tenet of the framework is aimed at increasing accountability and public awareness. The measure would require that information about compliance is publicly disclosed and direct the Justice Department to present an annual report to Congress outlining criminal and civil proceedings taken against violators.
Pelosi told reporters last week that a ban on lawmaker stock trading could come to the floor this month. The House is scheduled to leave Washington next week, and it is not set to return until after the November midterm elections.
On the House floor Thursday, top lawmakers said the House may consider legislation to reform the STOCK Act next week. That 2012 statute, an acronym for the Stop Trading on Congressional Knowledge Act, banned congressional employees and staffers from utilizing information received through work to benefit personally.