Sen. Josh Hawley (R-MO) reintroduced a bill to ban lawmakers from trading stocks and took a political jab at former House Speaker Nancy Pelosi (D-CA) in the process by naming the bill the PELOSI Act.
The Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act would prohibit members of Congress and their spouses from holding or trading individual stocks and require any individuals found in violation of the law to give up their profits to the U.S. Treasury.
Members who are caught and have to turn over their profits to the Treasury would also lose the ability to deduct their losses on their taxes, and the ethics committees of Congress could levy additional fines and will publicize violations.
Lawmakers and their spouses are still allowed to own diversified mutual funds, exchange-traded funds, or U.S. Treasury bonds under Hawley’s bill.
The act would give members of Congress up to six months to divest from their prohibited investments or to place those investments in a blind trust for the duration of their time as lawmakers.
“For too long, politicians in Washington have taken advantage of the economic system they write the rules for, turning profits for themselves at the expense of the American people,” Hawley said in a Tuesday press statement. “As members of Congress, both Senators and Representatives are tasked with providing oversight of the same companies they invest in, yet they continually buy and sell stocks, outperforming the market time and again.”
“While Wall Street and Big Tech work hand-in-hand with elected officials to enrich each other, hardworking Americans pay the price,” Hawley’s press statement continued. “The solution is clear: we must immediately and permanently ban all members of Congress from trading stocks.”
Hawley’s bill is named the PELOSI Act after Rep. Pelosi’s husband, Paul Pelosi, traded between $1 million and $5 million of stocks for semiconductors just days before Congress allocated $52 million to the industry. In September, Fox Business reported the timing of his stock sale of 25,000 shares of Nvidia stock allowed Paul Pelosi to avoid a 20 percent loss he would have seen if he had waited until after Congress passed the CHIPS Act.
Pelosi is not the only lawmaker who has come under scrutiny for stock purchases. Lawmakers from both parties have been the subject of stock trading controversies.
In 2020, Sens. Richard Burr (R-NC), Dianne Feinstein (D-CA), Kelly Loeffler (R-GA) and Jim Inhofe (R-OK) came under investigation for sales of stocks as the Covid-19 pandemic hit. Those investigations saw Burr step down as chairman of the Senate Intelligence Committee, though the U.S. Department of Justice and the U.S. Securities and Exchange Commission have since concluded their investigations of him without raising charges.
Hawley introduced a similar bill in the Senate last year, simply called the “Banning Insider Trading in Congress Act.” Then-House Speaker Nancy Pelosi said, at the time, that she opposed the bill, but indicated such legislation could proceed if it had the support of members of her party.