Designed To Fail? Some Democrats Point Finger At Nancy Pelosi Over Insider Trading Bill

Lawmakers and watchdogs think House leadership is trying to tank a ban on congressional stock trading: “It would please the voters but hurt their wallets.”
House Speaker Nancy Pelosi (D-Calif.) gives her weekly news conference at the U.S. Capitol in Washington on Friday.
House Speaker Nancy Pelosi (D-Calif.) gives her weekly news conference at the U.S. Capitol in Washington on Friday.
Alex Wong via Getty Images

A bipartisan movement to ban members of Congress from trading stocks failed to pass the House of Representatives this week, assuring that no action will be taken on the issue until after the midterm elections — if at all.

House Speaker Nancy Pelosi said she hoped to pass a bill before members left for a lengthy recess. But some in her own party are now accusing her of manufacturing repeated delays and unnecessary roadblocks.

Pelosi, who previously opposed a prohibition on congressional stock trading, surprised many who have been pushing for a ban by introducing her own lengthy ethics bill earlier this week.

Pelosi’s bill looks like an expansive proposal on its face. It would bar virtually all senior government officials from trading stocks, not just those in Congress.

But it contains wide loopholes that have infuriated ethics watchdogs, and critics said expanding the proposed ban to the executive and judiciary branches seems designed to draw new opposition and slow its chances of passing.

Sure enough, Majority Leader Steny Hoyer, who decides which bills go to a vote, told reporters Tuesday that the proposal had arrived too late and introduced too many new issues for him to schedule a vote before the November midterms.

The bill was also written without input from many key lawmakers in the ongoing push to ban congressional stock trades, according to good-government groups and members of Congress.

One of those members, Rep. Abigail Spanberger (D-Va.), who introduced a ban with Rep. Chip Roy (R-Texas) in January 2021, strafed Hoyer and Pelosi on Friday for introducing “a kitchen-sink package that they knew would fail.”

“I don’t think this bill was written to pass the House,” she told Business Insider. In another interview, she called for new party leadership.

“Absolutely this was a bill designed not to pass.”

- Dylan Hedtler-Gaudette, manager of government affairs at the Project on Government Oversight

Watchdogs echoed her suspicions that Pelosi and Hoyer were trying to snuff out any chance of reform.

“Absolutely this was a bill designed not to pass,” said Dylan Hedtler-Gaudette, manager of government affairs at the Project on Government Oversight. “Pelosi is very good at her job when she wants to get something done. … The approach they took was not designed to get anything done. It was designed to say, ‘We tried.’”

Among the issues critics highlighted is the fact that the bill would obliterate the high standard for blind trusts in favor of a standard that would allow government officials to conceal their assets from the public.

“This bill is the equivalent of a wrecking ball for the executive branch ethics program,” said Walter Shaub, a senior ethics fellow at the Project on Government Oversight who ran the U.S. Office of Government Ethics until he publicly clashed with former President Donald Trump’s administration.

Parts of the bill dealing with the judiciary are written poorly, other critics said, including language that is likely unconstitutional.

Gabe Roth, the executive director of Fix the Court, a group that supports sweeping ethics reform of the judiciary, said extending the bill to federal judges could provoke the opposition of one of the most powerful lobbying groups in the Capitol: the Judicial Conference, the policymaking body for the federal courts.

“It’s just inviting new resistance when we know the problem is most acute in the legislative branch,” he said.

What’s more, Congress has already passed part of a package to reform ethics requirements for federal judges. A second bill, which would expand those reforms to the Supreme Court, is still awaiting a vote.

On Friday, Rep. Hank Johnson (D-Ga.), a co-author of those judicial reforms, went on Twitter to needle House leadership about bringing the Supreme Court ethics bill to a vote.

Pelosi shot back Friday against accusations that her bill was designed to fail, saying her proposal had taken Spanberger’s proposed reforms and “made the bill stronger.”

“Whatever the members want to do, I fully support,” she said.

But good-government groups are accepting that a congressional stock ban has little hope under the current Congress.

Kedric Payne, general counsel and senior director of ethics at the Campaign Legal Center, said the reason why many members of Congress don’t want the ban is simple: “It would please the voters but hurt their wallets.”

Jonathan Nicholson contributed reporting.

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