Many members of Congress actively involved in the buying and trading of stocks are failing to disclose such trades in a timely manner. This has led to a widespread, bipartisan trend of ethics violations. Penalties for this behavior, governed by an opaque system, are rare and nominal. Consequently, members aren't deterred from future violations.
Campaign Legal Center (CLC) filed a complaint with the Office of Congressional Ethics (OCE) alleging that Rep. Byron Donalds (R-FL) violated the Stop Congressional Trading on Insider Knowledge (STOCK) Act by failing to timely disclose over 100 stock transactions worth up to $1.6 million.
The STOCK Act requires members of Congress to file Periodic...
Enacted in 2012, the Stop Trading on Congressional Knowledge (STOCK) Act requires members of Congress to report stock trades within 45 days of the transaction; failure to do so can result in civil and criminal penalties. Campaign Legal Center (CLC) played a role in advocating for the law’s passage.
At hand are legitimate concerns over conflicts of interest that may arise when an elected official has significant financial interest tied to an area over which they have significant influence. For example, a senator writing healthcare policy while holding substantial stock in a pharmaceutical firm; or a representative married to the chair of an energy firm sitting on a committee that can influence the energy sector.
But the penalties faced for violating the STOCK Act are often minimal and are not disclosed to the public. Fines for a first-time STOCK Act violator begin at $200 — barely a dent in undisclosed transactions that are frequently worth thousands and millions of dollars.
Put simply, as elected officials craft laws that directly impact the lives of Americans, voters have a right to know whether their representatives are acting in the public’s interest or for their own financial gain. If elected officials are not held accountable for failing to promptly and properly disclose stock trades, this trend of members failing to comply may continue and worsen.
Enforcement needs to become the norm for members of Congress violating the STOCK Act, not the exception. Complaints against members and the punishment for violations need to be more transparent and consequences for significant disclosure delays need to be more than a nominal fee.
