Congress’ stock trades became a hot topic after several members of Congress were revealed to have sold or bought shares last February and March after receiving private briefings on the seriousness of the then-looming coronavirus threat. The transactions revealed how lawmakers can use their access to information for personal gain, as well as how the lawmaking process could be corrupted due to the conflicts of interest members’ stock investments pose.
In the wake of those scandals, there’s been a growing movement—inside and outside of Congress—toward wanting to prohibit members of Congress and spouses with whom they share money from trading corporate stocks. Bills have been proposed in both chambers to address the issue, including proposals that would make members divest from corporate securities and others that would require such assets be held in blind trusts.
Earlier this week, several House members tried to get their proposals attached to H.R. 1, the omnibus ethics, campaign finance, and voting rights bill that already has several provisions in it related to reducing congressional conflicts of interest. At least three amendments on stock ownership were submitted to the House Rules Committee by members who hoped the committee would agree to allow them to get a vote on the House floor. The most widely supported of these was an amendment from Reps. Abigail Spanberger (D-Va.) and Chip Roy (R-Texas), co-sponsored by 5 other bipartisan House members, that would require senators and representatives, their spouses, and their dependent children to put stocks and other covered investments into blind trusts until after they are out of office. The amendment language mirrored Spanberger’s TRUST in Congress Act, which currently has 14 co-sponsors.
But the Spanberger-Roy amendment was not one of the dozens of amendments that the committee allowed to advance to the floor for a vote. Neither was Rep. Angie Craig’s (D-Minn.) amendment to ban members from owning individual corporate stocks, or Rep. Raja Krishnamoorthi’s (D-Ill.) amendment that would prohibit members from buying or selling such assets.
Why did the Rules Committee block these amendments from getting votes? You’d have to ask House Speaker Nancy Pelosi (D-Calif.) to know.
The Rules Committee is known as the “Speaker’s Committee” because, according to its website, “it is the mechanism that the Speaker uses to maintain control of the House Floor.” The Rules Committee is one of the two committees whose members are appointed by Pelosi, rather than being elected by the House Democrats’ Steering and Policy Committee, and nothing happens in the committee without Pelosi’s consent. “The Rules Committee is known as the Speaker’s committee because it does what she wants,” said congressional procedure expert Daniel Schuman, policy director at Demand Progress.
Nancy Pelosi is one of the wealthiest members of Congress and her husband, Paul Pelosi, is one of the most active stock traders among congressional spouses. Paul Pelosi would have to give up his stock trading if the Spanberger amendment were law.
Nancy and Paul Pelosi have dramatically increased their wealth while Nancy has been a top figure in the House. In 2008, Nancy Pelosi’s net worth was approximately $31.8 million, according to the Center for Responsive Politics’ analysis of her financial disclosures. By 2018, the Center estimates her net wealth to have ballooned to $114 million.
Most recently, Pelosi disclosed that her husband bought up to $1 million worth of shares each in Tesla and Walt Disney, as well as up to $500,000 in Apple stock. The periodic transaction report prior to that showed Pelosi exercising call options to buy up to $5 million worth of Amazon stock and 5,000 shares of Facebook stock valued at up to $1 million.
Paul Pelosi also made some good trades late last February as the pandemic was coming into focus. On Feb. 20, 2020 he purchased 10,000 shares of Slack Technologies, which makes messaging software that exploded in usage as companies shifted to remote work. He also picked up millions of dollars worth of shares over the next week in Alphabet and Microsoft, both companies that make software that would surge in remote-work usage over the following months.
Trading in tech stocks has been particularly profitable for the Pelosis. The Center for Responsive Politics finds that the Pelosi’s investments in the communications/electronics sector increased from $5.6 million in 2008 to $25 million in 2018, by far the largest increase of the couple’s investments in any sector.
House Rules Committee Chair Jim McGovern (D-Mass.) is a key ally of Pelosi, having backed her in a leadership challenge following the 2016 election raised by Rep. Tim Ryan of Ohio. In another leadership showdown in 2018, McGovern was Pelosi’s emissary to Democratic members of the Problem Solvers Caucus.
The Spanberger-Roy TRUST in Congress Act could still be considered as a stand-alone piece of legislation, but it has been referred to the House Administration Committee, which is the only other committee whose members are appointed directly by Pelosi.
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