By: Margo Rawlings

Editor-in-Chief

For decades, congressmen have unjustly economically benefited from insider knowledge undisclosed to the US public. In 2012, Congress passed the Stop Trading on Congressional Knowledge (STOCK) Act, which prohibited congressmen from making trades based on nonpublic information and set requirements for reporting transactions. While the act succeeded in its goal of creating transparency and recognizing possible conflicts in interest, it has blatantly failed to penalize those partaking in insider trading, as Congress has never prosecuted a congressman under the STOCK Act. In order to restore Congress’s integrity, they must pass the Transparent Representation Upholding Service and Trust (TRUST) in Congress Act, which requires all congressmen, their spouses, and their children to place their investments into a blind trust or establish that they do not own any covered investments for the length of their tenure and until 180 days afterwards. 

Most recently, members of Congress who voted to ban the popular social media platform, TikTok, in January, own between 29 million dollars and 129 million dollars of shares in TikTok’s competitors. Specifically, 44 of the 342 members of the House of Representatives who favored the bill own stocks in companies such as Meta, Google, Amazon, Microsoft, and Snap, which would benefit from TikTok’s sale or banning. The ability to use insider knowledge to make economic gains should alarm all Americans and prompt them to consider whether their representatives are voting in the interests of the American people or themselves. 

This instance of possible insider trading is far from the first of its kind. Congressmen have long benefited from national crises, such as the 2008 stock market crash, COVID-19 pandemic, and the 2023 bank failures, all while denying that their insider knowledge influenced their decisions. In 2022, 13 lawmakers admitted to trading stocks of companies that their committees were investigating; of 50 of the congressmen most active in the stock market, 44 traded shares in companies their committees influenced or received classified information regarding. Such behavior is unacceptable, undermining the principles upon which the United States embodies. How can a “government of the people, by the people, for the people” hold true if lawmakers have economic incentives to take certain political and economic stances? 

Congress must be held to the same standards as American citizens. If companies face severe repercussions for insider trading, so should Congress. While congressmen have repeatedly introduced bipartisan legislation to prevent such investments, no bills have gained enough traction to become law. The same body that benefits from these trades refusing to hold themselves accountable highlights the necessity for more stringent legislation. 

Passing the TRUST in Congress Act accomplishes this goal. By placing their covered assets into a secure blind trust, congressmen will be unable to use the private information they acquire in briefings to make their financial decisions, but will not suffer economically by being completely barred from trading. An alternative the bill offers is for lawmakers to certify they do not own covered investments. A covered investment includes investments acquired through the use of a derivative, but not mutual funds or bonds. Both options apply to members for the term and 180 days following their departure from Congress. This bill eliminates the issue of prosecution and penalty because congressmen will be unable to trade any covered stocks. 

At a time when the American people’s trust in Congress has significantly diminished, such legislation would help to reinforce Congress’s integrity and protect the principles of American democracy. 

(Sources: Ballard Spahr, Campaign Legal, Chip Roy, Independent, Quartz)