Democrats in Congress Point Fingers at Their Leaders Over Stock Trading Ban

Loeffler lost her seat to a Democrat, Raphael Warnock, in 2020. And Burr, a moderate, is retiring. His old seat is one of Democrats’ few pickup opportunities this year.

The New York Times’s investigative reporter Kate Kelly, along with our colleagues Adam Playford and Alicia Parlapiano, recently examined thousands of publicly reported trades by 97 members of Congress or their immediate family members.

Drawing on data from a three-year period, they discovered more than 3,700 trades that posed what they described as “potential conflicts between their public responsibilities and private finances.” Read their investigation here.

To get her insights, I asked Kelly four questions about the flap over stock trading. Here is our conversation, edited lightly for length and clarity:

There’s already a law on the books, the 2012 STOCK Act, that bars insider trading by members of Congress. So why do some lawmakers think it needs an update?

The STOCK Act reaffirmed that lawmakers aren’t allowed to insider-trade — nobody in the U.S. is — and it mandated that they disclose periodic transactions they and their immediate family made in stocks, bonds and other financial assets that were valued at $1,000 or more within 45 days. But the law did nothing to dissuade those lawmakers and family members from trading assets that could be influenced by their work in Congress.

Let’s say you’re investigating a catastrophic manufacturing glitch in an American-made car and you sell shares of the auto company involved a couple of days before your committee issues a negative report that makes the stock plunge. That’s inappropriate and should be against the law, according to many lawmakers. There are other, grayer areas, and insider-trading cases against members are pretty rare. But the mere fact that Americans see conflicts of interest in congressional trading is problem enough, is the feeling.

From talking to lawmakers about this topic, I get the sense that many resent the implication that they’re using their positions to make money on the side. How much of what you uncovered is merely the appearance of corruption, as opposed to the real thing?

It’s entirely the former, though we can’t rule out the latter — we just didn’t uncover enough evidence to show that any particular case was insider trading. The rarity of civil or criminal investigations into these cases makes it hard to know what’s really going on, whether it’s essentially routine transactions based on market research and common knowledge or a trade that was inspired by information learned in Congress.