In mid-December, Nancy Pelosi, the Democratic Speaker of the House of Representatives, brushed off calls for legislation to ban trading by members of Congress with a throwaway comment that has come back to haunt her.
“We are a free-market economy,” she told reporters at the time. “They should be able to participate in that.”
Pelosi’s quip was criticised for being tone-deaf not just because of her status as one of the wealthiest members of Congress, but also for the fact that it was made amid a growing outcry inside the Washington bubble and across the US over controversial investments by public officials.
Now the issue is coming to a head after a clutch of lawmakers this week introduced legislation that would ban or severely curtain active investing by their colleagues.
In the past two years, US lawmakers including Richard Burr, the North Carolina Republican senator, have been accused of improperly trading on confidential information about the pandemic. And Jay Powell, Federal Reserve chair, is battling a reputational crisis after three senior officials resigned following disclosures of questionable trades — including the central bank’s second-in-command Richard Clarida, who stood down this week.
In a separate but connected development, federal judges have been criticised for failing to recuse themselves from cases involving companies in which they or their families owned shares.
Chris Collins, a former Republican member of Congress, was convicted and sentenced to jail in January 2020 for participating in a scheme to commit insider trading, before being pardoned by former president Donald Trump.
According to the most recent OpenSecrets data from 2018, Pelosi’s net worth was $114.6m, making her the seventh-wealthiest member of Congress at the time.
The Speaker’s husband, Paul Pelosi, runs Financial Leasing Services, a San Francisco-based real estate and venture capital investment firm. The latest congressional disclosures show Paul Pelosi bought millions of dollars worth of call options in several companies last month alone, including Google parent Alphabet, Roblox, Salesforce and Disney. The trades made a splash on video app TikTok, underscoring the extent to which the issue is resonating beyond the Beltway.
The furore over powerful people having unfair opportunities to profit from investments has spurred cross-party momentum to crack down on securities trading in all three branches of the US government in an effort to disentangle Washington’s ties with Wall Street and corporate America.
According to a poll released this month by the conservative Convention of States, 76 per cent of Americans believe members of Congress and their spouses have an “unfair” edge in financial markets, with just 5 per cent saying they should be allowed to trade.
Read the full story at: https://www.ft.com/content/846a97f1-9128-4884-9765-0dd544180b63