In his State of the Union address, President Obama urged lawmakers to reduce the “deficit of trust” between Washington and the rest of the country, in part through a series of institutional reforms. At the top of the list: banning insider trading by members of Congress and limiting elected officials “from owning stocks in industries they impact.”
Those are two related ideas, but they’re not quite identical. The “STOCK Act” is already pending in the Senate, and it’s a companion measure to a House bill intended to restrict insider trading on Capitol Hill. But Sen. Sherrod Brown (D-Ohio) told Greg Sargent today about a plan to expand the legislation considerably.
Senator Brown tells me he is introducing a measure in the Senate today that would require all Senators to divest themselves of any stocks in companies that are impacted by their actions as a Senator. The idea is that members of Congress – who are suffering historically low approval ratings while enjoying historically high levels of personal wealth – have some work to do in building confidence that the institution is representing the public interest, rather than the interests of the wealthy and well-connected, some of whom are, well, them. […]
Brown says he supports the STOCK Act, but that it isn’t good enough. His proposal would formally prohibit members from owning individual stock in any companies directly affected by any of their official duties. This rule already applies to committee staff and executive branch employees, but not officials elected to the legislative branch.
Brown’s amendment would add some pretty significant teeth to the existing STOCK Act. A ban on insider trading would be a step forward, but it would limit a fairly small number of members. As Greg explained, the “far more pervasive situation” in one in which lawmakers cast votes “that directly impact companies they have a financial stake in.”
There’s no word yet on whether Brown’s idea would face opposition from his colleagues, but if reducing the “deficit of trust” is the goal, it’s a worthwhile proposal that Hill watchers should keep an eye on.