WASHINGTON — Lawmakers have renewed their interest in the past week in banning members of Congress from buying and selling stock.
The bipartisan push comes as the Securities and Exchange Commission continues an investigation into Sen. Richard Burr about whether he used non-public information regarding the COVID-19 pandemic to sell off stocks before the market plummeted.
On Jan. 12, Sen. Jon Ossoff, D-Georgia, introduced Senate Bill 3494 which, if passed, would amend the Ethics in Government Act to require members of Congress, their spouses and their dependents to use a blind trust for buying and selling stocks. The bill clarifies that this does not include diversified mutual funds, diversified exchange-traded funds and primary compensation from a spouse or dependent. It also does not include U.S. Treasury bills, notes or bonds.
Blind trusts give a trustee the ability to make decisions regarding stocks on behalf of another person without discussion. It would prevent members of Congress from using non-public information to make decisions about their stocks, the allegation Burr has faced.
Burr, a North Carolina Republican, faced two investigations into whether he used “non-public” information he received as a member of Congress to sell off his stocks before the pandemic widely hit the United States. The Department of Justice dropped its investigation, but the Securities and Exchange Commission’s investigation remains ongoing and involves stocks belonging to Burr, his brother-in-law Gerald Fauth and their wives.
“Members of Congress should not be playing the stock market while we make federal policy and have extraordinary access to confidential information,” Ossoff said in a news release last week.
Sen. Mark Kelly, D-Arizona, introduced the bill with Ossoff and said that he is dedicated to making government transparent and accountable.
“This legislation I am introducing with Senator Ossoff will put an end to corrupt insider trading and ensure that leaders in Congress focus on delivering results for their constituents, not their stock portfolios,” Kelly said.
Just days before Burr announced last January that he wouldn’t face charges from the DOJ investigation, Rep. Abigail Spanberger, D-Virginia, filed House Bill 336, similar to Ossoff’s.
She had 15 bipartisan co-sponsors, but the bill never gained any traction and showed no hope of becoming law until last week. Since Ossoff filed his bill last week, Spanberger gained six more Democratic and one more Republican co-sponsors.
But national leaders seem divided on the issue.
House Speaker Nancy Pelosi is OK with members owning stocks, Business Insider reported.
House Minority Leader Kevin McCarthy said he was against it, Bloomberg reported.
The White House said President Joe Biden will leave a ban for Congress to figure out.
Huffington Post politics reporter Igor Bobic caught up with Burr last week and asked him about the latest bill. Burr told Bobic he had no problem with it, adding that he wouldn’t be in Congress next year.
Burr announced in 2016 that he wouldn’t run for a fourth term.
He also told Bobic that “I wouldn’t wish for anybody to go through what I have gone through.”
McClatchy reached out to Burr to ask for further information. Burr’s spokeswoman said they would decline comment for the story.
Burr was one of five senators who faced allegations that they may have used information from Congress to make decisions on buying and selling stocks as the pandemic began to hit the United States. The Justice Department opened investigations, which were later dropped, into Sens. Dianne Feinstein (D-California) and James Inhofe (R-Oklahoma) and former Sens. Kelly Loeffler (R-Georgia) and David Perdue (R-Georgia), the latter of which was succeeded by Ossoff.
All five, including Burr, have denied any wrongdoing. Burr said he used publicly available information to make his decisions.
The Los Angeles Times broke the news about the Burr investigation after federal agents served a search warrant at Burr’s Washington, D.C., residence.
The FBI seized Burr’s cell phone after he sold more than $1.6 million in stocks in February 2020 after a briefing on the pandemic. At the time, he served as chairman of the Senate Intelligence Committee, but chose to step down following the allegations.
It seemed as if Burr’s problems were over when he announced the DOJ dropped the investigation. That is until attorneys for Fauth, Burr’s brother-in-law, told the SEC that he could not sit for an investigative interview regarding stock trades of his own.
In October 2021, the SEC asked for a federal judge to intervene, filing public court records that revealed some of the allegations against Burr.
It turned out that SEC officials had knowledge that Burr spoke with Fauth by phone the same day Burr sold his own stocks. Within 6 minutes of their call, Fauth called two brokers and sold several of his own stocks, the SEC said in court filings.
In the court filings, the SEC took issue with claims from Fauth’s attorneys saying he wasn’t well enough to sit for a three-hour interview.
Attorneys pointed out that Fauth had no issue doing so in a confirmation hearing when Biden nominated Fauth to serve on the National Mediation Board.
A federal judge ordered Fauth to comply and he was interviewed on Nov. 30.
The current status of the case has not been made public.