It is a long-running scandal that members of Congress are allowed to trade individual stocks. They have access to privileged information. They oversee a sprawling web of federal policy. Their actions can have direct effects on the companies in which they have stakes. The potential for real or perceived conflicts of interest is enormous.
Yet House Speaker Nancy Pelosi (D-Calif.) has not always favored cracking down on lawmaker stock-trading. “It’s a free-market economy,” she said last year, dismissing concerns. Lately, she has changed her stance, indicating that a stock-trading bill from Rep. Zoe Lofgren (D-Calif.) will make it to the House floor this month. That’s good. The question is whether the speaker will do what’s necessary to get it over the finish line.
Ms. Lofgren sent a letter to colleagues last week laying out a framework for a bill that would restrict public officials from exploiting their positions for personal gain: banning them as well as their spouses and dependent children from dealing in stocks, securities, commodities, futures, cryptocurrencies and similar investments, and mandating that they either divest existing assets or put them in a qualified blind trust. Those officials would still be able to hold diversified funds as well as government bonds, on the theory that dealing in those sorts of investments doesn’t present the same potential for abuse. Disclosure requirements would also become more detailed, and the penalties for noncompliance more severe.
The proposal Ms. Lofgren described is appealing. But good-government advocates are nevertheless wary. Democratic congressional leaders have not allowed votes this year on multiple bipartisan bills written along similar lines, which hardly builds confidence that they are committed to reform. Timing is now an issue: Lawmakers leave Capitol Hill on Friday and will not return until after the midterm elections, so any knotty disputes will need fast untangling if the Lofgren bill is to pass.
The proposal’s prospects are made even murkier by the pressure to apply the bill’s restrictions to Supreme Court justices along with members of Congress. This is a guaranteed nonstarter for Senate Republicans, at least some of whom would need to support the bill for it to advance. Otherwise, the bill might pass the lower chamber, handing Ms. Pelosi a victory and a talking point, but perish in the upper one.
The speaker shouldn’t allow that to happen. If Ms. Lofgren and her allies believe their bill is better than those already introduced, they should seize the opportunity to fix their own branch and leave the others for separate legislation. Some reform is better than none.
A recent New York Times report on congressional conflicts of interest revealed that nearly one-fifth of lawmakers bought or sold assets in industries possibly affected by their work. Some of the examples appear to show impropriety; the majority likely show only the appearance of it. But both are corrosive to citizens’ faith in good government. In bringing a viable bill quickly to the floor, House Democrats would help restore public faith — by holding themselves to account on stock-trading, and by doing what they said they would.
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