He was a stockbroker before he became a politician, and he continued playing the markets during his rise through Congress.

Rep. James P. Moran Jr. (D-Va.), a member of the powerful House Appropriations Committee, brought a swagger to both endeavors, sometimes winning big, sometimes losing big. At times, his investing became so busy it verged on what later came to be known as day trading.

Moran’s dual focus illustrates the latitude that every lawmaker has under congressional rules to invest largely as each chooses, a much less regulated approach than what Congress has required for other government officials and private-sector executives.

Moran’s trading has evolved over the years. Between 1995 and 2003, while representing bustling Northern Virginia, Moran made more than 537 options trades, potentially worth more than $3 million in all, according to a Washington Post review of records compiled by the nonprofit Center for Responsive Politics. In 1999, after the congressman lost about $120,000 over two years through options investments, attorneys for Moran’s second wife described his behavior as “stock market gambling” in court papers filed as part of a divorce.

Since Moran’s remarriage in 2004 to a wealthy entrepreneur, his disclosure statements show one of the most actively traded portfolios in Congress, with assets owned by his wife. In early 2005, he personally made more than two dozen risky, short-term investments designed to profit on the rise or fall of stock indices, his disclosure forms show.

Austin Durrer, Moran’s chief of staff, said Moran has not made stock trades himself in five years. Durrer played down the significance of the congressman’s investing activity in the 1990s, saying it had been addressed in his personal financial disclosures and written about in media accounts.

Moran and his wife did not respond to a request for an interview.

In recent years, his forms show that his wife’s holdings have been managed by professional brokers. The sprawling nature of those investments has caused them on occasion to intersect with Moran’s role as a legislator. Recently, the holdings included small investments in two companies for which Moran requested earmarks in 2008, the Post review found. Recently adopted congressional ethics rules require members of Congress to certify that they have no financial interest in the companies that receive their earmarks.

In the case of Moran’s earmarks, Durrer said, there was no conflict of interest because the holdings were modest and placed in diversified accounts managed by professional brokers for Moran’s wife, LuAnn Bennett, an entrepreneur and developer in the Washington region.

“The congressman had no concerns signing the certification,” Durrer said. “The 85 shares worth less than $4,200 were only a small fraction of a broadly diversified account managed outside of her control.”

Not alone in the markets

The type of trading detailed in Moran’s disclosure reports used to be relatively rare on Capitol Hill. But as the number of wealthy lawmakers grew over the past decade, so too did the number of lawmakers who owned stocks or engaged in speculative or sophisticated trades.

In the House, for instance, the proportion of lawmakers with stock investments has risen sharply, from 21 percent in 2001 to 60 percent at the beginning of last year, according to academic researchers and the Center for Responsive Politics. That includes 68 lawmakers who owned more than $100,000 in stock, not including mutual funds, according to records compiled for 2008, the most recent available for electronic analysis.

Long-standing congressional ethics rules allow almost any kind of trading and investment, subject in general to the judgment of individual lawmakers.

Those rules also allow spouses to have jobs in areas that touch on a lawmaker’s activity or investments. Moreover, lawmakers are not required to abstain from voting or divest themselves of stock when most potential conflicts arise.

Those standards stand in stark contrast to rules that the lawmakers have mandated for others in government and the private sector. Congress, for instance, has passed laws requiring that judges recuse themselves when they own stock in companies with pending cases. Cabinet secretaries and other presidential appointees must divest their portfolios of shares of companies their agencies regulate.

The permissive rules for lawmakers leave open the way for a wide array of investments, some of them aggressive. More than a dozen lawmakers in recent years have put money into highly volatile short-selling funds that bet against the economy and purport to pay $2 for every $1 invested. Others have invested in mortgage-backed securities, private equity placements and offshore hedge funds. They own shares in hamburger restaurants and breweries, drug companies, hometown banks, investment firms and blue-chip corporations such as General Electric -- including industries that are overseen by Congress or have received billions in bailout and stimulus funding.

Some ethics specialists contend that the growing personal financial ties between Congress and the private sector have added to the perception that lawmakers might be looking out for themselves rather than the citizens they represent.

Some critics say it’s time for stricter conflict-of-interest rules, possibly including mandates for blind trusts or divestment.

Sheila Krumholz, executive director of the Center for Responsive Politics, said lawmakers generally behave appropriately as investors.

“But there needs to be a sense, an assurance, this is aboveboard and transparent,” she said. “There needs to be electronic filing. The system has not kept up with the 21st century and the trading habits of lawmakers.”

Caleb Burns, a lawyer who represents lawmakers before congressional ethics committees, said it would be a “pretty onerous burden” to require members of Congress to put their holdings in blind trusts.

But he agrees that the current pen-and-paper reporting process can be improved by going to a digital system.

“Is the disclosure system adequate enough for voters to understand what kinds of holdings they’ve got?” said Burns, a partner at Wiley Rein in the District. “It could probably use some updating.”

‘Nothing new here’

For James Moran, the markets have played a background role throughout his political career. Moran worked as a stockbroker while cutting his political teeth on the Alexandria City Council in the early 1980s. He continued working as a broker after he became mayor in 1985, until he was elected to represent Virginia’s 8th Congressional District in 1990.

By the late 1990s, Moran had secured a coveted seat on the House Appropriations Committee. But he had suffered losses from his trading that compounded debts he accumulated after his daughter’s successful battle against cancer in 1994.

In 1995 and 1996, Moran lost about $120,000 in investments on risky stock options and futures contracts, according to subsequent news accounts. In dozens of instances, the profits essentially depended on whether the S&P 500 and 100 stock indices rose or fell.

Some experts consider such investments akin to betting, because the outcome is linked to the future price of a commodity, stock or group of stocks.

When Moran’s second marriage faltered, both sides in the divorce proceedings accused the other of misspending. A lawyer for Mary Moran said in court filings in 1999 that her husband had a history of “wasting the family assets on his stock market gambling.”

In a statement at the time, James Moran’s attorney said: “The Morans, like millions of Americans, made investments. Mr. Moran used the knowledge he acquired as a stockbroker during the 1980s. Unfortunately it didn’t work out. All the information about the Morans’ investments has been fully and completely disclosed in his annual financial disclosure statement. . . . There’s nothing new here.”

In 2000, Moran acknowledged borrowing $25,000 from a pharmaceutical lobbyist. The next year, he took a $50,000 loan from an America Online executive. He continued to make options bets, documents show.

“The other issues you’ve raised regarding the congressman’s personal finances have been covered by The Post in depth in the past,” said Durrer, his chief of staff. “Nothing new there.”

By 2003, Moran’s stock trading had waned. He disclosed prior losses and few investments that year. But his fortunes changed in 2004, when he married Bennett, the owner of a real estate and sports-management company. Moran’s disclosure statements became among the most detailed in Congress.

In the first three months of 2005, Moran again became personally active as a trader when he bought or sold 30 “puts” and “calls,” in transactions potentially worth as much as $1 million. Puts and calls are risky bets that a stock or asset will either rise or fall in value at some point in the future. They usually are highly leveraged, meaning an investor places his bet by putting down a small amount of an asset’s value and can reap huge profits or losses.

That kind of investing, though, was a relatively small part of the couple’s holdings in recent years. Their portfolio, including private equity funds and other investments, was worth between $3 million and $12 million as of the start of 2009.

There’s no way to know with precision how much those holdings are worth because congressional rules allow lawmakers to report assets in broad ranges.

The holdings disclosed by Moran in 2008 included stock in General Dynamics and BAE Systems, which both received earmarks requested by Moran that year, according to financial and earmark disclosure records. The earmarks were for $1.6 million each.

Moran submitted letters to Congress certifying that neither he nor his wife had any “financial interest” at stake.

When asked about the earmark letters, Durrer said Moran did not believe that the holdings counted as a financial interest under the House conflict-of-interest rules because they were modest -- Durrer estimated them at less than $4,200 -- and they were in a diversified portfolio, and decisions about them were made by Bennett’s brokers without her input.

In a March 2007 memo, the House ethics committee offered guidance about how to comply with new rules that leave it largely up to the lawmaker to decide if there is a conflict or seek guidance.

“A financial interest would exist in an earmark when it would be reasonable to conclude that the provision would have a direct and foreseeable effect on the pecuniary interests of the Member or the Member’s spouse,” the memo states. “Such interests may relate to one’s financial assets, liabilities, or other interests of the Member and spouse, such as ownership of certain financial instruments or investments in stocks, bonds, mutual funds, or real estate.”

The memo also said: “A financial interest would not include remote, inconsequential, or speculative interests,” which it generally defined as “shares in a diversified mutual fund, employee benefit plan . . . or pension plan that, in turn, holds stock in the company.”