The hottest new issue on the campaign trail: Lawmakers’ stock trades
In a fight for his political life in one of the most competitive House races of 2022, Rep. Tom Malinowski, a Democrat from New Jersey, has spoken out strongly against lawmakers who negotiate individual stocks, calling for a rapid bipartisan action to ban this practice.
It’s a position that Malinowski, under fire from his opponent and national Republican groups seeking to unseat him for his stock trades of more than $3 million since the start of 2020 that have not been properly disclosed, says that he regrets not having acted sooner.
“I wish I had come to that conclusion the day I was sworn in,” Malinowski said in an interview with NBC News.
There is no indication that he acted on the basis of inside information, and Malinowski claims that the transactions were carried out by a broker without his involvement. Still, about $1 million of the deals involved medical and technology companies with an interest in responding to the pandemic, as the Associated Press reported last year.
Malinowski has now said he has placed his assets in a blind trust and is pushing for legislation that would require others to do the same.
“We must take all possible steps to eliminate the perception that these decisions are made with our own financial interests in mind,” he said.
Malinowski isn’t the only candidate in a competitive race to be outraged over his stock trading and lack of disclosure. As bipartisan pressure mounts in Washington to pass legislation that would bar members and their spouses from trading or owning individual stock, the debate has followed a number of lawmakers home on the campaign trail.
The issue first arose in early 2020 after it was revealed that some members of Congress had made deals early in the pandemic before the general public knew the full extent of the upheaval facing them. was waiting. In the two Senate second-round races in Georgia early last year, former Republican senators David Perdue and Kelly Loeffler were skewered by their opponents over their pandemic-related trades.
Sen. Jon Ossoff, the Democrat who beat Perdue in the Georgia race, led an effort to prevent congressional stock swaps, partnering with Sen. Mark Kelly, a Democrat from Arizona, who faces a tough re-election race this fall.
In a sign of the issue’s popularity, Republicans are now trying to take credit for raising it. Matt Gorman, a GOP strategist, said his party “grabbed the issue right from under their noses” after Chair Nancy Pelosi, a California Democrat, initially resisted the idea in December.
The House Republicans’ campaign arm – the National Republican Congressional Committee – has targeted half a dozen vulnerable House Democrats, including Malinowski and Democratic Rep. Sean Patrick Maloney of New York and chairman of the Congressional Campaign Committee. Democrat, on trades and lack of timely disclosure. (Maloney said this week he thinks there’s “merit for a bunch” of proposals to impose new rules on members’ stock trading.)
The Congressional Leadership Fund, a PAC aligned with the GOP leadership, has targeted others, such as Representatives Cindy Axne, a Democrat from Iowa, and Elaine Luria, a Democrat from Virginia, over questions of trade and disclosure.
Some competitive races also feature members who are now at the forefront of debate in Congress, either pushing for reforms or arguing against a ban.
“We’ve seen attacks on stock trading have a devastating effect on people like Kelly Loeffler and David Perdue,” a national GOP strategist working on House campaigns told NBC News. “And there’s no reason these attacks shouldn’t translate into attacks on Democratic candidates as well. This is a very toxic issue for independent voters. Both Republicans and Democrats view the stock markets as very corrupt. .”
Polls show strong support for banning lawmakers from trading stocks. A Morning Consult/Politico poll last month showed 63% of voters think members should be banned from trading. A survey by the progressive polling firm Data for progress found that 67 percent of voters agree with the bans.
Malinowski agreed that the races in Georgia were “a key factor” in raising this issue both in Congress and on the campaign trail.
“The result of this has been intense media scrutiny of members investing in the stock market,” he said. “We have disclosure requirements. But they’re incredibly complicated. Virtually everyone stumbles, which has also led to greater suspicion and scrutiny.”
The disclosures are mandated by the Stop Trading on Congressional Knowledge Act, known as the STOCK Act. But a typical violation equates to a fine of just a few hundred dollars, and some lawmakers have expressed a desire to revise the law, increase penalties and clarify requirements. Last year, Insider identified 55 congressional lawmakers, including members of both parties, who misreported their stock trades.
“So I’ve come to the conclusion, through my own experience, that the only real solution to this problem is the simple one – prohibiting members from being actively involved in the stock market,” Malinowski said.
Tom Kean Jr., a Republican defiant Malinowski, called him a “presenter on why reform is needed in the House of Representatives,” adding that the congressman’s “investment strategy included betting on failure. of individual U.S. companies over the past two years.
Kean himself has come under fire from Democrats for his own stock trades, which included selling at least $175,000 of Johnson & Johnson stock in 2020, NJ.com reported. The company is one of the manufacturers of a coronavirus vaccine.
“If my opposition makes it an issue, I think they will invite scrutiny of themselves,” Malinowski said.
In an interview with NBC News, Kean said he, too, would put his assets in a blind trust, adding that he would support the Confidence in Congress Act and the Conflicting Trade Ban Act – laws bipartisan Malinowski co-sponsored.
On the opposite coast, Christy Smith, a Democrat locked in another competitive race with Republican Rep. Mike Garcia of California, took aim at the congressman for not disclosing some of his 2020 stock trades until after he was re-elected. close – long after he was mandated to report them – tweeting that he “jumped straight into the bottom of the swampA spokeswoman for Smith told NBC News she supports lawmakers’ ban on negotiations. Garcia’s campaign did not respond to requests for comment.
In Iowa, the issue has taken center stage in GOP efforts to unseat Axne, who has come under scrutiny for transactions she failed to properly report — which has prompted a complaint from the Campaign Legal Center, a government watchdog group. The transactions, according to his office, were made by a broker without his involvement. They involved his family’s retirement accounts and an investment account set up for his children’s college savings.
In a statement to NBC News, Axne said she was “strongly in favor of tougher and clearer guardrails for public officials.”
“I never personally executed or directed stock trades while I was in Congress, and I think there should be a ban on officials directing trades in individual stocks,” she said. said in a statement. “I’m having conversations with my colleagues to explore how we can institute this ban without creating the unintended consequence of forcing liquidation of retirement savings or college accounts that aren’t actively managed in order to be a member of Congress. .”
Iowa State Senator Zach Nunn, a Republican seeking to unseat Axne, criticized her for the dealings and disclosure issues.
“There’s a bipartisan frustration about this that Republicans and Democrats at the federal level have done this on more than one occasion, and now they’re getting caught,” he told NBC News. “People demand a certain responsibility.”
The problem also plays out in the primaries, where many candidates embrace reform as a populist signal to voters. During Pennsylvania’s Democratic Senate primary, Lieutenant Governor John Fetterman last month defended the ban on congressional lawmakers, spouses and senior executives from owning or trading individual stocks, calling it ” clear conflict of interest”. His rival, Democratic Representative Conor Lamb, quickly jumped in to note that he was already co-sponsoring the conflicting trade ban law.
But the details point to a split between the two Pennsylvania rivals. The Lamb-backed bill would not extend the ban to spouses. Fetterman’s campaign said he supported a separate bill proposed by Ossoff and Kelly that would cover spouses.
Other lawmakers, including some vulnerable members of the House, don’t see the need for the changes — and some are rooting squarely against them. Luria told Punchbowl this week that the potential reforms are “bulls —And Republican Senator Tommy Tuberville of Alabama told the Independent this week that the proposed changes were “ridiculous”.
“There’s nothing you can do,” added Tuberville, who has made more than 100 trades since September and is one of the biggest violators of STOCK law disclosure requirements. “I think that would really reduce the number of people who would want to come here and serve, really.”
The growing scrutiny has prompted some lawmakers to dump their individual actions.
“What little I have — stocks — I just sold,” said Democratic Rep. Bill Pascrell of New Jersey.