Senators Propose Ban on Stock Ownership for U.S. Lawmakers
WASHINGTON—Two U.S. senators are set this week to introduce bipartisan legislation to bar members of the federal executive branch and lawmakers from owning stock in individual companies, as new polling shows broad public support for such a measure.
The bill from Sens. Kirsten Gillibrand (D., N.Y.) and Josh Hawley (R., Mo.) would permit the president, vice president, lawmakers, Capitol Hill aides and employees of the executive branch to own mutual funds and broad industry and index funds.
But it would prohibit them from owning stocks in individual companies, even in blind trusts.
The legislation is the latest in a series of measures to be introduced in Congress in response to The Wall Street Journal’s Capital Assets series last year, which found that many top executive-branch employees owned stocks in companies that their agencies helped to regulate.
“It is critical that the American people know that their elected leaders are putting the public first,” said Gillibrand in a statement, “not looking for ways to line their own pockets.”
Employees of the executive branch face strict conflict-of-interest rules that prohibit them from owning or trading shares in companies that they oversee as part of their jobs. The Journal’s series found that those rules contain loopholes and omissions and can be waived and ignored.
The bill includes stiff penalties for government officials who violate the rules. Employees of the executive branch would have to forfeit any profits from stock trading and face fines of $10,000 or more.
The new bill would outright ban ownership of individual stocks by members of Congress and their aides. Lawmakers and their aides are currently permitted to own and trade individual stocks as long as they don’t make investment decisions based on nonpublic information they learn from their jobs in Congress.
Under the new bill, members of Congress would face a penalty of at least 10% of the value of the prohibited investments for not complying with the ban.
A poll released Wednesday by the University of Maryland’s Program for Public Consultation found that 80% of voters support a ban on stock ownership by members of Congress, the president, vice president, Supreme Court justices and their families. The survey of 2,625 registered voters has a margin of error of plus or minus 1.9%.
“While the prospect of a stock-trading ban is controversial within Congress, public support approaches unanimity,” said Steven Kull, the director of the Program for Public Consultation.
Roughly one dozen bills have been introduced in Congress this year to overhaul the government’s rules for stock trading in Congress and the executive branch.
The Senate Homeland Security and Governmental Affairs Committee has scheduled a vote Wednesday on a bill from Sens. Gary Peters (D., Mich.) and Chuck Grassley (R., Iowa), that would create an online and searchable database of the corporate stocks, mutual funds and other assets owned by senior officials in the executive branch.
The Gillibrand-Hawley bill would create a similar public and searchable database for stock transactions by members of Congress, their staff and employees of the executive branch.
Write to Brody Mullins at Brody.Mullins@wsj.com