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Stock trading among Congress degrades ‘the trust’ of Americans, Rep. Spanberger says

Rep. Abigail Spanberger (D-VA) joins Yahoo Finance Live to discuss revising the STOCK Act, which would bar members of Congress from participating in stock trading while in office.

Video Transcript

- There is broad support for restricting members of Congress's investments. A "New York Times" analysis recently found that 97% current lawmakers or members of their immediate family made stock trades showing possible conflicts over the last three years. And proposals to amend the lack of restrictions in the Stock Act have been introduced, including one co-sponsored by Representative Abigail Spanberger and Representative Chip Roy, which would require active members of Congress to put these assets in a blind trust.

And Congresswoman Spanberger is joining us now. You've made these proposals, but it hasn't yet gone anywhere. As I mentioned, there's broad support for these measures. There seems to be some back-and-forth about adding a provision for the Supreme Court justices as well. What, ultimately, is the holdup here?

ABIGAIL SPANBERGER: Well, back in 2020, when there were reports of legislators and members of Congress buying or selling pharmaceutical company investments and stocks in companies that were clearly either going to go down because of the pandemic or up because of the pandemic, that's what motivated Chip Roy, a Republican from Texas, and I to write this legislation to say, let's just remove any opportunity for either inappropriate behavior or the perception of conflicted trading.

And so we said, it's very simple. You can't own individual stocks, and you can't buy and sell. So either you put your money into a diversified fund or you roll your money into a blind trust, hands off what's there. You leave that to a professional to handle so that every time you are taking a vote, we are taking a vote, the American people think that there are sure that there is no conflict, and we are removing even the perception.

And, of course, there's report after report of legislators who are buying or selling various different stocks that surely seem related to kind of the issues of the day, oftentimes issues of the day that we're receiving briefings on. The holdup is that, you know, it impacts members of Congress. And I think there's perhaps a hesitance towards change.

It's one that the American people want to see overwhelmingly. And it's one that bipartisan legislators, you know, across the political spectrum recognize a need to make this change to ensure that every time we are making a decision, or every time we enter a meeting with the CEO of a potential company, that we're there because it matters to our constituents and our country and not because there might be some benefit to our stock portfolio.

- You know, I think every individual that is represented by an elected official wants to ensure that there is no conflict of interest when you are going to approach a vote and that it's not just in favor of a personal portfolio. I guess where this also gets tricky, too, even as you're pushing this forward, is what this means for the future elected officials, future talent, and not deterring them from running for some of these public office positions out of fear that they won't be able to participate in the markets or in their portfolio.

And so, you know, what are some of the steps that you're implementing into the way of thinking around how the updates, the amendments could move forward in order to ensure that those in the future of representatives is not deterred as well?

ABIGAIL SPANBERGER: Absolutely. And this is something that I have talked about as we were developing this legislation with members of Congress who were very successful in the private sector before they ever came to Congress, who have substantial stock holdings and entered Congress with substantial stock holdings because we absolutely don't want to impede anybody from being able to save for their retirement.

We absolutely want to make sure that, you know, the choice to run for Congress should be one of commitment to service to country. It should not be one that gets a lawmaker, you know, undue opportunity to make money on the stock market. But we also should be able to save for our retirement.

So mutual funds, EFTs, those are permissible. What's not permissible is that we go to a briefing where we have members of the intelligence community saying Russia will invade Ukraine, and then members leave that classified briefing-- which, of course, now we know that was wholly correct-- and call their broker and say, I want to buy more stock in these defense contractors because we know we are going to be sending US-made weapons and weapons systems to Ukraine.

What we want to make sure is that back in January of 2020, when we were having classified briefings about a potential pandemic, that no one is able to leave, call their stockbroker, and say, I want you to put money in on Pfizer and Clorox and dump these other stocks, right, which, even whether it was ill-intended or not, those examples are real. And the perception even that those actions were following that briefing made this choice, that continues to degrade the trust that the American people have.

And we have examples of members of Congress who came to Congress with substantial wealth that they had chosen to have in individual stocks who have already chosen to abide by the legislation that Congressman Roy and I lead along with 65 other members of Congress. And they've gone through the process.

Some have chosen to diversify into mutual funds, put their individual stock holdings into mutual funds. And some have decided to roll their individual stocks into a blind trust, giving up that day-to-day control. So the choices are there, whichever path one chooses to take. And we have members who have he decided to become compliant with our legislation as they have signed on to it as a co-sponsor, recognizing that it's an important step for them to take to assure the American people and their constituents that they are deserving of their trust.

BRIAN SOZZI: Representative, let's say on perception here, should Speaker Pelosi be running point on this type of legislation, given the concerns around her husband's trading activity?

ABIGAIL SPANBERGER: I think the members who have been working on this legislation for years are the ones who should be running point on it. And we have formed our own working group. So, you know, I mentioned the bipartisan bill that I have with Congressman Roy of Texas. We've got 65 additional co-sponsors.

Congressman Raja Krishnamoorthi has a piece of legislation, Congresswoman Katie Porter, Congresswoman Ocasio-Cortez, there are-- Congressman Joe Neguse, Congresswoman Craig. There are various different proposals, either directly aligned with the legislation that I have put forward with Congressman Roy or complementary.

And so we have formed our own working group. We've been working for months to determine, you know, the differences between our legislation. Were they intentional differences? Can we all unite around potential principles and move forward with our legislation?

We have our principles and our priorities. But as is the case in this circumstance, the speaker is choosing to run point on this. I would prefer for the speaker to make the choice to look at the legislation that exists that already has broad support and bring that to the floor. But that's not the choice that she's made here.

JULIE HYMAN: Lastly, I want to circle back around to that Supreme Court measure, which seems to be a sticking point as well. Is that something that Democrats are willing to step aside on and just concentrate on Congress in this bill?

ABIGAIL SPANBERGER: I think it's important-- I'll say this. I think it's important. I am focused on all sorts of ethics reforms. And I think every branch of government needs increased ethics reforms. And I absolutely support a future in which we have the judiciary abide by these same sorts of reforms.

But I do think that pulling in the judiciary when we have not yet gotten our own house in order is potentially a delay tactic, is potentially something to kind of argue about on the side, and could potentially slow this legislation down. And so that's why I find it concerning that, you know, House Administration and the speaker has said that she definitely wants to include judiciary.

While I support it in principle, I recognize that, for some of our colleagues across the aisle, that may be a poison pill at this point in time. And I hope that choice is not intentional to bring in a poison pill. But I think this is an example of we are the ones who are elected by the people. We are the ones sitting down with CEOs of large companies getting classified briefings, taking votes that literally can move markets and invest billions of dollars in particular industries.

And so the importance that we put this change in place for us is of the utmost, highest importance. Applying the same standard and code of ethics across the government, I think, is valuable. But the priority, in my opinion, should absolutely be on getting our own house in order. And any efforts to sort of slow or delay that or further complicate that goal, I think, are ill-timed, though potentially intentional.

BRIAN SOZZI: All right, let's leave it there for now. Virginia Representative Abigail Spanberger, good to see you. Have a great weekend.

ABIGAIL SPANBERGER: Thank you.