So-Called Anti-Corruption Legislation is a Trojan Horse for Trump’s Anti-Voter Campaign

The Stop Insider Trading Act isn't what it seems.

The House recently passed the Stop Insider Trading Act (SITA), which sounds like a good thing. Congressmembers routinely trade stock, including involving industries that directly overlap with their committee work that provides them privileged information. An overwhelming majority of Americans disapprove of Congressional stock trading.

The problem with the Stop Insider Trading Act is simple: This bill doesn’t actually solve the problem of members of Congress using their positions to get rich. Worse, Republicans are selling this legislation as anti-corruption reform, but they added voting-related provisions Republicans haven’t been able to pass in their overtly anti-voter bills like the SAVE Act. So, the Stop Insider Trading Act is best understood as a Trojan Horse that looks like they’re taking on corruption but in reality is just another Republican attempt to retain GOP political power.

Campaign Legal Center issued a statement opposing SITA by summarizing its flaws: “SITA does not actually ban congressional stock trading, and it will thus not remove the cloud of distrust that hands over lawmakers’ suspicious stock trades. Moreover, this legislation does nothing to limit members’ ability to use official actions to benefit the stocks they own, even if no trading occurs. Finally, SITA’s limited ban on stock purchases creates exceptions that swallow the rule.”

What would SITA do? It would ban members of Congress from making some new stock purchases, require advance notice for stock sales, and levy penalties for any Congressmembers who break those rules.

Each of those new rules on their own would be a step in the right direction. However, SITA is missing the key rules that would make it a meaningful stock trading ban. The most glaring omission: SITA doesn’t prohibit members of Congress from selling stocks while in office.

Yes, of course, Congressmembers buying stocks is one way they can enrich themselves with insider information. Many Congressmembers have bought stocks related to the industries that they’re supposed to be overseeing as part of their committee assignments. There’s no escaping that there’s an inherent conflict of interest because they have privileged information while making those purchases.

For example, Senator Susan Collins (ME) sits on the Senate Health, Education, Labor and Pensions Committee, and this spring she bought shares in pharma giant Pfizer. While serving on the Senate Committee for Armed Services, then-Senator and now Department of Homeland Secretary Markwayne Mullin, purchased stock in the major defense contractor Raytheon and the oil companies Chevron and Conoco Phillips, mere days before the Trump Administration invaded Venezuela. The list goes on. These are just a couple of prominent examples.

But members of Congress have also sold large shares of stocks at opportune times, while having insider information, and they’ve made more (or have lost less) money because of when they sold their stocks. As we’ve written here previously: Rep. Rob Bresnahan (PA-8) dumped stocks in Medicaid providers valued at roughly $130,000 while having access to privileged information about the Republicans’ mega-bill that gutted Medicaid spending. So, Congressmembers selling stock is a central part of the corruption.

Meanwhile, SITA also contains so many other loopholes that anyone in Congress interested in enriching themselves off insider information still has plenty of opportunity to use their position for personal gain. According to Campaign Legal Center, SITA specifically applies exceptions to:

• Crypto currency purchases

• Commodity purchases

• Bond purchases

• Industry-specific mutual fund or exchange-traded fund purchases

• Any purchases made from a non-blind trust

That’s a lot of ways to make money off trading as a Congressmember that aren’t covered by the bill.

What does SITA restrict? Access to the ballot box. “Republicans have corrupted their so-called stock trading bill with a decaying piece of the SAVE America Act corpse,” Rep. Joe Morelle (D-NY) said on the House floor. SITA would impose a nationwide requirement that voters show ID when voting in a federal election – one of President Trump’s demands ahead of the midterms.

We can also understand SITA better when we understand that its sponsor is Rep. Bryan Steil (WI). Steil also sponsored the Make Elections Great Again (MEGA) Act that would’ve enshrined national extreme voter ID requirements, made DHS the clearinghouse for deciding which Americans can vote, and many more actions that are incompatible with Americans’ Constitutional right to vote. Steil led the politically motivated investigations into ActBlue, the online platform that Democratic candidates use to raise money from grassroots donors. And his biggest political contributors include members of the financial services industry.

Hiding voting restrictions in a bill that looks from a distance like a government reform is a politically shrewd way for Republicans to try pass voter restrictions. Democrats running for reelection in swing districts could have a very hard time voting no on a bill that ostensibly stops insider trading – because a majority of Americans consider Congress corrupt and support anti-corruption reforms, and because Democratic incumbents need to prove their anti-corruption stance to win back those voters. So, by putting this bill up for a vote, Republicans have put those Democratic members in a tough position.

The deceptive nature of this bill is also why we’re glad you’re here and reading this. Chatting about SITA’s flaws might not be the fastest way to make friends at a barbecue this weekend, but we have to keep each other educated about the enormous gap between what Republican lawmakers say they’re doing for the American people and what they’re actually doing. Steil and his Republican allies may be stumping on ending corruption, but they’re perpetuating it – while also trying to make it harder for the American people to kick them out of office in November.