BUSINESS INSIDER, BRYAN METZGER AND KIMBERLY LEONARD
A ban on stock trading by members of Congress is “sensible” and would “restore faith in our institutions,” says Brian Deese, a top economic advisor to President Joe Biden and head of the National Economic Council.
The comments were in response to CNBC’s “Squawk Box” host Andrew Sorkin asking Deese what he thought about banning members from trading individual stocks after House Speaker Nancy Pelosi said lawmakers should be allowed to do so in comments to Insider last month. Deese began by noting that executive branch employees are barred from trading individual stocks.
“I can tell you, the restrictions on the executive branch are quite significant,” said Deese. “There’s no engagement on individual stock transactions.”
He went on to praise the idea more broadly. “I think that’s certainly sensible. It’s a rule that we all operate by and live by in the executive branch, and [it] doesn’t put any real practical burden on our ability to do our jobs,” he said.
Deese then said restrictions on stock trades were important for the goal of restoring faith and trust in American political institutions.
“There’s a lot of distrust and mistrust around how politics works, around the political process,” he said. “One of the things that we need to do across the board is restore faith in our institutions, whether that be Congress and the legislative branch, whether that be the Fed and otherwise and so anything we can do to try to restore that faith, I think makes a lot of sense.”
The White House is not endorsing a specific approach to ethics in Congress, officials told Insider after Deese’s comments aired.
“As Brian said this morning, President Biden believes that all government agencies and officials, including independent agencies, should be held to the highest ethical standards, including the avoidance of any suggestion of conflicts of interest,” Emilie Simons, White House assistant press secretary, said. “At this early point in the legislative process, the White House has not endorsed any bill text.”
The 2012 STOCK Act allows members of Congress and their top staff to trade stocks but requires them to regularly report their trades, as well as other ways they earn money outside their congressional salaries. Though there has been a flurry of activity in recent weeks to tighten stock trading rules, numerous lawmakers including Democratic Sens. Kyrsten Gillibrand of New York and Jeff Merkely of Oregon have long pushed to make the law stronger.
In December, Insider published “Conflicted Congress,” a five-month long investigation that found dozens of lawmakers and 182 senior congressional staffers had violated the STOCK Act by failing to properly report their stock trades.
Insider reached out to the White House for comment before the project launched, alerting officials about the investigation’s findings. Officials were asked to comment on the findings given that Biden was vice president when President Barack Obama signed the STOCK Act into law. At the time, Obama said the law was crucial to restoring faith in government.
Yet the White House did not reply to requests to comment on what it wanted Congress to do in light of Insider’s findings. During Biden’s 2020 presidential campaign, he pledged to work with Congress to pass legislation to prevent self-enrichment via personal financial holdings.
Deese’s remarks come as lawmakers on both sides of the aisle have proposed a slew of bills to ban stock trading in recent days, including a pair of competing proposals unveiled on Wednesday by Sen. Jon Ossoff, a Democrat of Georgia, and Sen. Josh Hawley, a Republican of Missouri.
Ossoff’s proposal, which he’s co-sponsoring with fellow Democratic Sen. Mark Kelly of Arizona, would force members to place stocks in a blind trust. It’s similar to the House’s TRUST in Congress Act, introduced by Reps. Abigail Spanberger, a Democrat of Virginia, and Chip Roy, a Republican of Texas.
Connor Joseph, a spokesman for Spanberger, told Insider that the congresswoman was “very encouraged by Deese’s comments this morning” and is “excited about the growing momentum behind this push.”
Democratic Rep. Angie Craig of Minnesota said Thursday that she would be introducing a bill to ban lawmakers from holding individual stocks outright, going beyond blind trusts.
Pelosi rejected the idea of a ban when asked by Insider at a December press conference.
“We are a free-market economy. They should be able to participate in that,” she said.
House Minority Leader Kevin McCarthy is reportedly supportive of curtailing stock-trading by lawmakers.
Democratic Sen. Mark Warner of Virginia — chairman of the US Senate Select Committee on Intelligence and the 6th wealthiest member of Congress, per an Insider analysis — endorsed a ban on members of Congress trading individual stocks.
“Members ought to restrain themselves from playing in the market … If you take these jobs and responsibility, you have to be willing to give up something,” Warner told Alan Kantrowitz of the Big Technology Podcast.
“Even if you’re not doing anything wrong,” he said, “it looks bad.”