We Need Stronger Oversight of Congressional Stock Trades

At a Glance

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. 
 

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About This Case/Action

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.   

Wisconsin Groups File Redistricting Challenge

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MADISON, WI – Yesterday, Campaign Legal Center (CLC), Law Forward, Inc. and Stafford Rosenbaum LLP filed suit in the United States District Court for the Western District of Wisconsin on behalf nonpartisan groups and individual voters challenging Wisconsin’s state legislative map, which the 2020 Census has revealed to have unequally populated districts. The suit asks the court to strike down the current maps as unconstitutional and implement new maps that do not violate the rights of voters, given the likelihood the legislature and governor are unable to agree on new maps.

Plaintiffs in the suit are nonprofit, nonpartisan organizations with members whose voting power is weakened because they live in districts that are now overpopulated. Black Leaders Organizing for Communities, Voces de la Frontera and the League of Women Voters of Wisconsin, along with three individual voters seek new state legislative maps that reflect Wisconsin’s population shifts over the past decade and comply with federal and state law. The August 12 data release by the Census Bureau revealed a population gain of 199,243 residents for Wisconsin in the past decade, with the population of existing districts now out of balance.

“Wisconsin’s current State Assembly district map is one of the most egregious gerrymanders ever seen, and the court should ensure that this decade’s maps are fair and treat all Wisconsin voters equally," said Paul Smith, vice president at Campaign Legal Center (CLC).

“As we have experienced first-hand in Wisconsin since the Legislature gerrymandered districts in 2011 to entrench the control of one political party for an entire decade, the redistricting process cuts to the heart of our democratic form of government," added Doug Poland, Law Forward’s Litigation Director. "All Wisconsin voters deserve to have their voices reflected in our state government. Our Legislature and the policy choices they make should reflect the will of the people, not what a minority of legislators want for us. The Census data demonstrates that Wisconsin’s current maps are now unconstitutional. If the Legislature won’t follow a process to ensure that new districts are constitutional and fair, the Court must act to protect voters.”

“The Black community has had to fight constant challenges including our voices to be heard in our democracy,” said Angela Lang, executive director of BLOC. “We know how important the redistricting process is and we need to make sure our community is represented. In order to have a true democracy we need to have a fair process that includes everyone.”

“It is imperative that the Census 2020 data is transformed into fair, nonpartisan maps” says Debra Cronmiller, League of Women Voters of Wisconsin Executive Director. “Our legislators must draw fair maps that represent everyone – no matter their race, background, zip code, or income – to ensure a representative government. For over 100 years the League has defended voters, and the fight for fair maps is an extension of that mission. We are proud to stand with our partners in this important fight.”

In each of the past four decades when control over Wisconsin’s government has been divided between members of the Republican and Democratic Parties (as it is now), the legislature and governor have failed to reach a compromise, requiring a federal court to step in and implement new state legislative district plans.

At Campaign Legal Center, we are advancing democracy through law. Learn more about our work.

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Passage of John Lewis Bill in House Is Critical Step. Now the Senate Must Act.

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Washington, D.C. – Today, the U.S. House of Representatives passed the John Lewis Voting Rights Advancement Act, otherwise known as the VRAA or H.R. 4.

Trevor Potter, president of Campaign Legal Center (CLC), and a Republican former chairman of the Federal Election Commission, released the following statement:

“At this pivotal moment for the future of our country, the House has taken a critical step to prevent states from passing voting laws that discriminate against racial minorities. Now the pressure is on the Senate to act. The Department of Justice does not currently have the tools it needs to hold states with a history of discrimination in voting accountable for passing discriminatory voting laws. The Voting Rights Act has a long track record of earning overwhelming bipartisan support, as protecting voting access was a goal that transcended the political divide. By passing H.R. 4, Congress would strengthen the guardrails of democracy and stop attacks on Americans’ freedom to vote in their tracks. All voters should have a say in the future direction of our country.”

In a hearing before the House Committee on the Judiciary on Aug. 16, 2021, witness testimony demonstrated the urgency of congressional action addressing challenges faced by communities of color with access to voting. According to a recent report released by CLC, at least four states that passed restrictive laws in the first half of this year would have been subject to preclearance if the John Lewis Voting Rights Advancement Act were in place – which would have required them to prove to the U.S. Department of Justice or a federal court that their laws did not discriminate against voters of color. Under the new formula provided by the VRAA, Alabama, California, Florida, Georgia, Louisiana, Mississippi, New York, North Carolina, South Carolina, Texas and Virginia would likely be subject to preclearance.

The Voting Rights Act (VRA) of 1965 was renewed by Congress five times after hours of hearings proving the persistence of racial discrimination in voting laws and the law’s unequivocal success at combatting it. If the end of the twentieth century was a period of voting rights expansion, the twenty first century has been a period of rising attacks on voting rights. Signed into law on July 27, 2006 by former President George W. Bush, the most recent renewal  of the VRA followed many hours of hearings that demonstrated the persistence of racially targeted policies in our democracy and the continued effectiveness of this law in combatting them. It passed the Senate that year 98-0.

Attacks on voting rights have reached a new fever pitch after the U.S. Supreme Court’s decision in the 2013 case Shelby County v. Holder. In the past decade, Americans have seen cutbacks to early voting periods, new burdensome requirements to cast ballots and restrictions on the right of civic groups to assist citizens in participating fully in the democratic process.

At Campaign Legal Center, we are advancing democracy through law. Learn more about our work.

BREAKING: Campaign Legal Center Files Ethics Complaint Against Tennessee’s Rep. Diana Harshbarger for Failing to Properly Disclose Over 700 Stock Trades this Year

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Under the Stop Trading on Congressional Knowledge (STOCK) Act, members of Congress must disclose a stock trade within 45 days of the trade with no exceptions. All members and their staff receive mandatory STOCK Act training.

Washington D.C. – Today, Campaign Legal Center (CLC) filed complaint with the Office of Congressional Ethics against Rep. Diana Harshbarger for failure to comply with the Stop Trading on Congressional Knowledge (STOCK) Act.

In a periodic transaction report filed earlier this week, Rep. Harshbarger acknowledged over 700 trades that violate the STOCK Act due to the fact that they were not disclosed within the proper window of time. While the stocks are assets of her trust, this is not a blind trust, and the report concedes that she was notified of the transactions soon after they occurred.

“The reason we have the STOCK Act is to allow voters full, real-time awareness of interests held by elected officials that may conflict with their official duties. But we don’t currently have meaningful enforcement,” said Kedric Payne, general counsel and senior director of ethics at Campaign Legal Center. “Members of Congress cannot continue to shirk their responsibility and see a nominal fine as their only repercussion for denying voters transparency when it comes to their financial interests.”

The actions of Rep. Harshbarger follow a troubling, bipartisan trend. Already this year, CLC has filed similar complaints over violations of the STOCK Act by Sen. Rand Paul and Sen. Tommy Tuberville as well as Reps. Pat Fallon, Blake Moore and Tom Malinowski.

This is just one more example of an elected official ignoring the STOCK Act by failing to report a large volume of stock trades and facing little consequence. Because ethics proceedings lack significant transparency, it is next to impossible to determine what consequences, if any, members who commit such violations face.

What we are witnessing is the dismantling of the STOCK Act as members wait until their annual financial disclosures to reveal stock trades and are thus not held accountable for failing to provide real-time disclosure under the law. It is clear that the current ethics enforcement system, built on a foundation of self-policing in which members of Congress are responsible for enforcing their own ethics rules for their own colleagues, is not working. As elected officials craft laws that directly impact the lives of all Americans, the public must be able to trust that their representatives are acting in the public’s interest, and not for their own financial gain.

At Campaign Legal Center, we are advancing democracy through law. Learn more about our work.

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