Where’s the Maryland Delegation on Congressional Stock Trading?

Where’s the Maryland Delegation on Congressional Stock Trading?

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Maryland is home to the highest per capita rate of federal workers in the country, with about 240 out of every 10,000 Marylanders working for the federal government. Those federal workers must adhere to comprehensive ethics rules designed to prevent conflicts of interest and insider trading — and yet the members of Congress these federal workers elect to represent them are not held to those same standards.

Over the course of this year, the glaring lack of congressional ethics rules has become painfully obvious to the American public, and legislation to rectify this has overwhelming public support. Yet as legislative efforts to hold members of Congress to the same standard applied to federal workers have stalled in Congress, the majority of Maryland’s elected representatives in Congress have been conspicuously absent from the efforts to bring some parity to this system.

It’s hard to understand how our representatives in Washington, D.C. can justify holding themselves and their colleagues to a financial conflicts of interest standard so much lower than the one imposed on their federal employee constituents, all the way down to the most entry-level positions.

The 2022 midterm elections are fast approaching, and Maryland voters have important decisions to make about who they want to represent them in Congress. With a congressional delegation made up of 10 members — two Senators and eight members of the House of Representatives — the Free State has a critical role to play in crafting solutions to some of the nation’s biggest challenges. Maryland’s congressional delegation includes the second most powerful member of the House, Majority Leader Steny Hoyer, and the Chairman of the Senate Small Business Committee, Senator Ben Cardin.

By wide and bipartisan margins, the public has made it clear that members of Congress engaging in the buying and selling of stocks is unacceptable and must be prohibited. At the time of this writing, Business Insider has reported that at least 70 members of Congress have violated the existing law meant to bring transparency to members’ financial transactions, including at least two members of the Maryland delegation (Representatives David Trone and Jamie Raskin). Public reports of suspiciously timed stock trades at the outset of the COVID-19 pandemic have also fed into a preexisting sentiment of public distrust in Congress, which has likely influenced a dismally low, 17% public approval rating.

In response to the growing public outcry against congressional corruption (and the perception of corruption), several members of Congress have introduced measures that would restrict or ban stock trading by members of Congress and their immediate families. These measures have garnered bipartisan support, including from Maryland Representatives Andy Harris, Anthony Brown, and Jamie Raskin.

Let’s pause to think about how preposterous the current situation is: Members of Congress, who can move markets and directly impact share prices through their positions of legislative power and privilege as elected officials, are free to essentially hold any financial investments they want to, no matter how much of a conflict of interest such holdings may pose. By way of contrast, in order to comply with a criminal conflict of interest law that Congress exempted itself from, an entry-level worker employed at a random federal agency is required by the Office of Government Ethics to divest any investments that could potentially present a conflict of interest. To say that this is a laughable double standard would be an insult to laughable double standards.

And that’s not to say the divestment standard is too onerous to apply to federal employees. It isn’t. It’s a common sense rule that should apply to every federal employee — including members of Congress.

Given how much of Maryland’s population is employed in the federal workforce, and given how much the public worries about government corruption, it defies logic that the Maryland congressional delegation isn’t leading the way on this issue.

As residents of this state, we have every reason to demand this of our elected representatives. The entire Maryland congressional delegation should be jumping at the chance to support crucial legislation to limit their own potential conflicts of interest. And any member of Congress who does not throw their support behind these efforts should have to explain their opposition to voters in this state.

It is long past time for Congress to step up and hold itself to higher standards of ethical conduct, just like Congress requires of the thousands of Marylanders who are employed by the executive branch. To do anything less is a slap in the face to the people of Maryland.

About The Author

Dylan Hedtler-Gaudette

Dylan.HedtlerGaudette@pogo.org

Dylan Hedtler-Gaudette is a resident of Baltimore and a registered independent. He works for the Project On Government Oversight (POGO), a nonpartisan federal government watchdog group based in Washington, DC. Dylan works on bringing more accountability and transparency to the federal government by helping to advance reforms aimed at making government more effective, responsive, and responsible. He obtained degrees in political science and economics from the University of Southern Maine and a master’s degree in Global Studies and International Relations from Northeastern University. He lives with his wife and three cats in the Union Square neighborhood of Baltimore.

1 Comment

  1. Walt French

    Reformers who want to ensure the public *knows* its officials aren’t exploiting their positions have an easy option available

    Every congressperson or other covered position and their close relatives should be required to publish their trades 5 days BEFOREHAND. If there’s apparent inside info in them, the public can do the math and decide if they want to get in before, at possibly a better price, and thereby possibly moving the price to one based on full information available

    Trades that are simply to sell shares to finance a kid’s college or get into a promising industry, would be seen as such; publishing that Congressperson X wants to buy $10,000 of some mega-company like Apple would be seen as ho-hum and nobody would jump in based on the assumption of inside info

    So this rule wouldn’t prohibit ANY trade except day-trading. Which (1) is NOT what we want our reps to be doing, and (2) probably loses them more money than they make–unless they’re going on inside info

    Finally, enforcement, which this commentary smartly calls out: any time a trade is executed in violation of the rule, the violator would be forced to disgorge any profits from it. Note that violating trades that DON’T work out well wouldn’t need to be reversed, giving potential offenders a sharp reminder that they can only lose from violating the rule.

    I’m a retired investment manager. I had stronger rules against even the appearance of using inside info or exploiting my responsibility to others. That’s generally true in the industry. No reason why those who we entrust with our nation shouldn’t show they aren’t abusing that trust

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