Republican Ohio Rep. Bob Gibbs introduced legislation Tuesday that would shorten the time for stock purchases to be reported from 30 days or 45 days to 24 hours with a substantial increase in fines.
The legislation, titled Transparency in Government Officials Trading Act, would also change the penalty from one at the Ethics Committee’s discretion to a fine equal to the amount of the transaction if they don’t file within 24 hours. Republican Utah Rep. John Curtis co-sponsored the bill.
A number of social media users have been tracking the stock trades of several members of Congress in an effort to beat the market, as bipartisan attempts to ban members from trading stocks are on the rise. Thirty-five members of Congress outperformed the SPDR S&P 500 ETF Trust, an index fund that tracks the 500 most valuable stocks in the world.
Gibbs called out Speaker of the House Nancy Pelosi who is a frequent trader and has profited significantly during her time in Congress and also defended members for trading stocks.
“Everyone should be outraged about elected officials using inside information to make a profit, which is why insider trading is already illegal. Former Members of Congress rightly went to jail just a few years ago because of it. But banning members from owning stocks or forcing them to use a blind trust actually makes it easier for the super-wealthy like Pelosi to dominate Congress. Only those as wealthy as Pelosi and her husband can easily afford the management fees of a blind trust. The answer is not to ban trading and stock ownership, but to maximize transparency and accountability,” Gibbs said in a statement.
“My bill will require the reporting within 24 hours of the sale or purchase of stock. Firstly, this isn’t the 1980s, and stock trading doesn’t require the long paper trail it used to. The proliferation of online trading platforms means transaction confirmations are sent nearly instantly. Members who purchase or sell stocks or options have no excuse not to report it electronically within 24 hours,” Gibbs continued.
A majority of Americans believe members of Congress should be banned from trading stocks while in office, according to a Trafalgar Group/Convention of States Action poll released in January. Only 5% of respondents approved of lawmakers trading stocks, and 19% had no opinion.
“Secondly, this shortened window allows the American people to see, in near real-time, what elected officials are trading and allows them to make the same transactions if they so choose. If we are to increase transparency, we also need to mandate increased accountability. For any member that does not report a transaction in 24 hours, there must be a real, painful consequence. My bill makes it simple: the penalty for not reporting a transaction in a 24-hour window will be equal to the amount of the trade. Doesn’t matter if the transaction is $1,200 or $12 million,” Gibbs concluded.