Lawmakers – under the microscope for their own stock trading practices – are questioning whether senior executive branch officials should be banned from owning and trading individual stocks. On Monday, Sen. Josh Hawley, R-Mo, plans to propose legislation that would bar them from the practice.
“Senior members of the executive branch – who have access to privileged information – shouldn’t be using it to get rich,” Hawley told the Wall Street Journal. “While prohibitions already exist in federal law to prevent conflicts of interest, these laws are difficult to enforce and frankly, insufficient.”
The spotlight on stock-trading government employees follows a Journal investigation from October that revealed more than 2,600 officials across the executive branch reported owning or trading stocks that are influenced by decisions their agencies make.
For instance, they profiled a Defense Department director who bought Lockheed Martin stock five times in the weeks leading up to the company securing a $1 billion contract from the Pentagon to deliver more F-35 combat jets. The employee said he wasn’t involved in and had no inside knowledge ahead of the contract and that ethics officials didn’t raise any concerns about his trades.
In January, the Journal revealed that in recent years, ethics officials have warned one-third of senior Energy Department employees about stocks they or their families hold, reminding them of conflict-of-interest rules. U.S. law already prohibits federal officials from working on matters where they or their immediate family members hold significant financial stake, and Republicans like Hawley aren’t the only ones raising the alarm over whether this is sufficient.
This past week, Democratic lawmakers Sen. Elizabeth Warren and Rep. Pramila Jayapal sent letters to investigators at eight different federal agencies, asking them to review whether their ethics rules are effective enough. Both have previously introduced bills to ban members of Congress and their spouses from owning and trading stock, as has Hawley. So far, those proposals have made little progress over two sessions.
Those against banning federal officials and lawmakers from trading stocks have argued it could deter people from going into public service.
