“Your wife isn’t a blind trust. Your financial adviser isn’t either,” Painter said. “If you truly want to create some distance, you should set up a blind trust. The rules that Congress has set for itself with blind trusts are a lot more liberal than the rules they created for the executive branch. This should be the route they take if they want the public to believe they don’t know what’s going on with their investments.”
Only six members of the Senate have set up blind trusts that have been approved by the ethics committee. The House does not keep a tally of the number of members who set up such trusts.
Under ethics rules, lawmakers may establish a blind trust by shifting all of their assets into an account managed by a financial adviser. The lawmaker may set general parameters for the blind trust investment decisions, but they surrender control and cannot know the details of the decisions.
Georgia State University professor Alan J. Ziobrowski said lawmakers who own stocks in companies lobbying on legislation before them have built-in conflicts.
“You can’t get into their heads to know what is motivating them,” said Ziobrowski, whose research helped prompt the initial push for the Stock Act by showing that members of Congress outperformed the market as a whole — senators by 10 percent and representatives by 6 percent. “Are they thinking about their investment, or about what is best for their constituents?”
The Post analysis is based on a comparison of federal financial disclosure forms from all members of Congress to a wide array of public records, drawing on work by the Center for Responsive Politics and Govtrack.us to convert paper documents to databases. The analysis does not include 2011 data because they have not yet been computerized.
Under Congress’s interpretation of its own conflict rules, lawmakers can take official actions that benefit themselves as long as they are not the sole beneficiaries.
Former representative Brian Baird (D-Wash.), who co-authored the original, unsuccessful version of the Stock Act in 2006, said members of Congress and their staffs do not understand that public trust is eroded when people see lawmakers take actions that have the potential to benefit themselves.
“They don’t get it, but they need to,” Baird said. “Why? Because people who are taking actions for venal and nefarious purposes might make the same argument you’re making about your innocence. That’s why if there is an appearance of an impropriety, there just might be an impropriety. Members need to bend over backwards to show people they are there for the good of the country.”
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