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Spectrum News: Porter, Gillibrand reintroduce STOCK Act 2.0

Porter, Gillibrand reintroduce STOCK Act 2.0

Days after Santa Clarita Rep. Mike Garcia, R-Calif., came under scrutiny for a stock trade he made in 2020 that has resulted in calls for an investigation with the Office of Congressional Ethics, a fellow Californian is attempting to end stock trading by members of Congress altogether.

“This is truthfully a problem with the status quo in Washington,” said Rep. Katie Porter during a discussion about her new bill, the STOCK Act 2.0, with Spectrum News. “We need to restore confidence; we need to change our practices – because what we’re doing is really allowing the conversations that benefit members, the issues that elected representatives care about, that Wall Street cares about, that big corporations care about – control the conversation in Washington.”

The original STOCK Act, passed in 2012 and signed into law by President Barack Obama, outlawed members of Congress from using information gained in the performance of official duties and requires lawmakers to make public transactions valued at more than $1,000 within 45 days of the transaction date. Porter’s bill wants to take it one step further.

The STOCK Act 2.0 would ban members of Congress from trading individual stocks at all. But the legislation includes more than just members of the House and Senate; the bill would also ban the president and vice president, Supreme Court justices, Federal Reserve Board governors and Reserve Bank presidents and vice presidents from trading individual stocks. It’s already found a Senate lead in Sen. Kirsten Gillibrand, D-N.Y.

“The bill does not ban Congress people and elected officials from saving for their retirement; every American should try to put aside what they can for their family to have an emergency safety net to have funds for retirement. It just bans owning individual stocks,” explained Porter. “There’s a window after someone is elected that they are required to divest – they can take their individual stocks and purchase mutual funds – purchase widely held diversified mutual funds – in which investment managers are making the decisions about what to buy and what to sell.”

“That eliminates the conflict of interest and the appearance of conflicts that we have now,” she said.

The proposed legislation would also require members of Congress, senior congressional staff, the president, vice president, and executive branch senior employees to report any time they, or a direct family member such as spouse or child, applies for or receives loans, agreements, contracts, grants or payments from the government. It would also increase the penalty for failing to file transaction reports from $200 to $500.

There has been a growing bipartisan push to ban stock trading by lawmakers and other government officials, as recently as earlier this year, with the introduction of the Ban Stock Trading for Government Officials Act earlier this year in the Senate by Sens. Josh Hawley, R-Mo., and Gillibrand. In the House, Rep. Brian Fitzpatrick, R-Pa., introduced the Bipartisan Restoring Faith in Government Act, which found two unlikely co-sponsors: Rep. Alexandria Ocasio-Cortez, D-N.Y., and Rep. Matt Gaetz, R-Fla., a highly liberal Democrat and extremely conservative Republican, respectively.

Back in 2020, multiple members of the U.S. Senate from both parties – including then-Sens. Kelly Loeffler and David Perdue, both Georgia Republicans, as well as Sen. Richard Burr, D-N.C., and the late Sen. Dianne Feinstein, D-Calif., — either dumped stocks or invested in medical companies after receiving classified briefings on the spread of COVID-19 prior to the widespread public understanding of the pandemic’s severity. 

Porter says lawmakers have violated the STOCK Act repeatedly.

“Some of my colleagues, both Democrat and Republican who violated the rules didn’t win their re-elections,” said Porter of the consequences. “But the truth is, we ought to just have good rules that we follow, in general, not be playing a game of gotcha to see if the American people catch us and can hold us accountable.”

Porter didn’t share where she and Gillibrand stand on acquiring Republican lawmakers as co-sponsors to the legislation but mentioned Rep. Ken Buck, R-Colo., as a lawmaker across the aisle who has said in the past this is an issue that needs to be addressed.

“The truth is both leadership, Democrat and Republican, have failed to put these bills on the floor for a vote during my five years in Congress,” she said. “And that needs to change.”