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A new bill being introduced by two senators would require Congressional members to divest themselves of stock holdings or place them in a blind trust.
Democratic U.S. Sens. Sherrod Brown, of Ohio, and Jeff Merkley, of Oregon, penned and sponsored the Putting the People’s Interests First Act of 2012 which would build on the Stop Trading on Congressional Knowledge Act of 2012, or the STOCK Act, which is aimed at preventing Congressional members from using inside information gained on Capitol Hill to make money on the stock market or to increase their stock portfolio.
“Members of Congress should feel privileged and honored to be elected to serve the public, but some elected officials abuse the information they have acquired through their service in Congress to enrich their stock holdings,” Brown said Wednesday during a media teleconference. “That is wrong. Public servants should not receive financial benefits for any vote they cast or issues they work on.”
He explained the Senate is considering the STOCK Act, which would apply the same laws to Congress as it does to any other person in the United States.
“The STOCK Act only deals with insider trading, which is only a small part of Washington’s problem,” Brown said. “I would like to see this go further because why should members of Senate vote on issues that affect the oil industry when some members of the Senate own oil stock.
“The idea is simple — senators should not be voting on issues that affects their financial investments,” he said. “While this bill will not win Jeff or I any popularity contests with our colleagues, this is the right thing to do.”
He explained Congress deals with this issue in a limited way with such committees as the Senate Arms Services Committee and the Senate Intelligence Committee which requires staff members to divest themselves of any stock affected by committee decisions — but this rule does not apply to members of Congress.
Federal regulations and federal criminal law also prohibit executive branch employees, their spouses, and children from owning stock in companies that they regulate, but the prohibition is not extended to congressional members who make laws affecting publicly-traded companies, Brown explained during the media teleconference.
Under Brown’s and Merkley’s proposal, the Putting the People’s Interests First Act of 2012 would prohibit members of the Senate and staff from owning and requiring them to divest themselves of individual stock in, or short selling, companies directly affected by their official duties. The act would permit senators and staff to invest in broad-based funds and place their assets in blind trusts.
“American democracy depends upon the public trusting that their representatives will the act in the public interest,” Merkley said. “We should do everything in our power to eliminate conflicts of interest. We need a bright line separating personal interest and the public interest — members shouldn’t be holding individual stock that could be affected by the votes we take on the floor of the Senate.”