Republican senator Josh Hawley (Mo.) has proposed a ban on stock investments by members of Congress, drawing inspiration from former House Speaker Nancy Pelosi (D-Ca.).
The PELOSI Act, short for Preventing Elected Leaders from Owning Securities and Investments Act, would prevent lawmakers and their spouses from holding and trading stocks.
“Pelosi” ban introduced
If Hawley’s bill becomes law, lawmakers would be given six months to divest their holdings or place them in a blind trust. Investments in mutual funds, exchange-traded funds, and Treasury bonds would be exempt.
Any members who violate the PELOSI Act would forfeit their profits to taxpayers, Hawley said.
“Members of Congress and their spouses shouldn’t be using their position to get rich on the stock market,” Hawley tweeted.
Hawley, known for his populist broadsides against Wall Street, said politicians “have taken advantage of the economic system they write the rules for, turning profits for themselves at the expense of the American people.”
Hawley initially introduced the ban as the Banning Insider Trading in Congress Act last year before coming up with the new, eye-catching name.
He faces a heavy lift in passing the bill, with Democrats in control of the Senate and the looming example of past failures to regulate stock trading.
Banning members of Congress from trading stocks has been a popular rallying cry for years, one which intermittently captures the attention of lawmakers, but never long enough for meaningful reform to result. As always, a challenge remains convincing lawmakers to vote against self-interest.
Members of both parties have come under the microscope for suspected insider trading, although Pelosi, one of the wealthiest members of Congress, is often seen as Exhibit A among those advocating regulation.
Pelosi and her husband Paul Pelosi are multimillionaires, and they derive much of their wealth from the stock market.
While Pelosi has insisted her husband does the trading, she hasn’t been able to defuse suspicions that the couple have profited immensely from access to non-public information.
After facing backlash for defending her right to participate in the “free market,” Nancy Pelosi began to acquiesce to pressure for a ban last year, but the effort once again lost momentum.
A stock ban doesn’t appear to be a priority for House Republicans, who have capitalized on their new majority to push for sweeping tax reform.