Profiting In Congress

Dozens of lawmakers trade stocks related to their work, and it’s harming trust in the government.

Members of Congress have access to information that ordinary Americans don’t. They meet with chief executives, read classified intelligence reports and help set the rules by which the economy works.

That level of knowledge can give them an advantage if they or their families want to invest in the stock market — and many of them do: Nearly one in five members of Congress, from both parties, have in recent years bought stocks that intersected with their congressional committee work, a Times investigation found. And that’s probably an underestimate because lawmakers’ work extends beyond their committee duties, my colleague Kate Kelly, who reported on the story, told me.

Among the conflicts uncovered:

  • The wife of Representative Alan Lowenthal, a California Democrat, sold Boeing shares a day before a House committee that he sits on released a report exposing the company’s mishandling of its 737 Max jet, which had been involved in two deadly crashes.

  • Representative John Rose, a Republican of Tennessee, sold $100,000 to $250,000 in Wells Fargo stock a few months before a committee he is on released a report that was critical of the bank.

  • Senator Tommy Tuberville, an Alabama Republican on the Armed Services Committee, and his wife sold options tied to Microsoft less than two weeks before the company lost a $10 billion contract with the Defense Department.

(You can see whether your representative or senator made the list.)

Anna Rose Layden for The New York Times

In many of these cases, little or no evidence directly links congressional work to a purchase or a sale. Most lawmakers questioned about potential conflicts of interest say that they followed the law or that a relative or broker with no knowledge of their congressional work made a purchase or sale.

But that demonstrates the problem: Lawmakers can profit from their inside knowledge while remaining within the bounds of the law but creating, at a minimum, the appearance of a conflict of interest.

The trades exacerbate many voters’ sense that politicians put their own interests above the public’s or the country’s. That, in turn, helps fuel Americans’ distrust of their government. Congress in particular consistently scores poorly in surveys about confidence in institutions.

Each of the past three presidents promised to restore that trust, in his own way. Barack Obama campaigned on his anticorruption record and later signed a law trying to stop congressional insider trading. Donald Trump vowed to “drain the swamp” of corruption and self-dealing (though his administration was plagued by ethics scandals). President Biden has called on Congress to prove that “democracy still works” and that government “can deliver for our people.”

The institutional distrust can pose a threat to democracy, scholars warn. If Americans don’t believe the government is working for them, they may be more likely to support alternatives, even nondemocratic options. In other countries, authoritarians have tapped into public distrust to justify more extreme measures and changes, eroding democracy around the world.

Greg Kahn for The New York Times

Lawmakers have proposed bills to restrict their own stock trading. Some proposals would bar members of Congress and their spouses from buying stocks, a measure that majorities of voters support. Other legislation would force lawmakers and their spouses to put their investments into blind trusts.

On Wednesday, Speaker Nancy Pelosi promised a House vote on a congressional stock-trading bill this month. But neither that bill nor any other appears to have the bipartisan support needed to pass the Senate.

Why? For one, congressional stock trading can be a genuinely tricky issue. Some proposals would effectively force spouses to abandon yearslong careers that preceded a lawmaker’s time in Congress. That would be the case with, for example, Pelosi and Senator Tina Smith, whose husbands are professional investors.

It’s also unclear where to draw the line. Should lawmakers’ children, for example, be barred from buying stocks? (Some members of Congress think so: Representative Angie Craig said her college-age son had bought stocks without her knowledge. She told The Times that she disapproved of her son’s purchases and wanted to pass a law “to force him to listen to his mother.”)

And despite the optics, members of Congress may not be profiting much. Lawmakers’ stock purchases and sales from 2012 to 2020 did not perform better than other, similar stocks, a recent study found.

Still, there may be a simpler explanation for why lawmakers haven’t passed a bill, Kate said: “It’s not in their personal interest.”

  • Democrats remain even with Republicans in the battle for Congress, and support for Biden is growing, a New York Times/Siena College poll found.

  • The judge in the Mar-a-Lago documents case appointed a special master and continued to bar the Justice Department from using the seized files in its investigation.

  • Decisions by the governors of Florida and Texas to send migrants to liberal states were meant to protest border crossings they blame on Biden.

  • The Senate will delay a vote to protect same-sex marriage until after the midterms. Bipartisan negotiators haven’t yet secured enough Republican support to pass it.

  • After winning the New Hampshire Republican Senate primary on Tuesday, Don Bolduc said the 2020 presidential election “was not stolen” — despite having repeatedly claimed that it was.

Pool photo by Alexandr Demyanchuk

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Thanks for spending part of your morning with The Times. See you tomorrow. — German

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Matthew Cullen, Lauren Hard, Claire Moses, Ian Prasad Philbrick, Tom Wright-Piersanti and Ashley Wu contributed to The Morning. You can reach the team at [email protected].

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