Congressional stock trading is a talking point in last days of the campaign

Woodbridge, VA — Before Democratic canvassers left to search for any last-minute undecided voters on Sunday, Rep. Abigail Spanberger (D-VA) gave a pep talk on the hot-button topics that might come up — such as infrastructure, prescription drug prices, and gun violence.

But after she finished, a canvasser named Frank Krogh asked about another issue in this northern Virginia town: stock trading by lawmakers.

Speaking to Yahoo Finance later, Krogh said he likes to broach the topic because “it’s a two-fer.” That is, it’s a bipartisan issue that Spanberger is involved in and also addresses voters’ overall distrust of Washington.

Congress’s failure to regulate its own trading activity is a talking point for Spanberger, who’s been outspoken on the need to police the practice. The 43-year-old Democrat co-sponsored a bipartisan bill aiming to block the practice, one of several proposals seeking to stop or further police the stock trading activity of lawmakers. Those in favor of a ban or new regulations argue that lawmakers often have access to non-public information that could give them an edge in the stock market.

“Basically any place that I might be, somebody wants to talk about it,” Spanberger told Yahoo Finance Sunday, between conversations with voters. “People say: ‘Well I don’t agree with everything you’re doing but I like that banning members of Congress from trading stocks.’”

Stock trading on the campaign trail

Efforts to curb Congressional stock trading have hit more than one roadblock. When Congress adjourned at the end of September, lawmakers missed a deadline to vote on the practice. House leaders promise to take up the issue when they re-convene. However, they have yet to take concrete action to address an issue that exploded into public consciousness in late 2021 when reports emerged that lawmakers privy to information about the coronavirus sold stock just before the stock market tanked.

Despite the lack of action, efforts to rein in lawmaker stock trading have attracted the public’s support.

A recent poll from Morning Consult found that two in three voters back a stock trading ban for officials across the government. Support for a ban has grown following a steady stream of news reports throughout the year revealing members of Congress and government officials trade stocks while working on issues that moved the prices of those securities.

In a screenshot from a recent campaign ad, Senate Candidate John Fetterman touted his position on lawmaker stock trading.

Democratic candidates have been particularly vocal in support of a ban. In Pennsylvania, Senate candidate John Fetterman cut an ad touting his positions and attacking Mitch McConnell over the issue. Another challenged Democrat, Sen. Michael Bennet (D-CO), also mentions it prominently. Sen. Mark Kelly (D-AZ) also brings up the issue often and lists it high on his campaign website. Like Spanberger, Kelly has been one of the loudest voices calling for a ban on trading.

It’s time to end corrupt insider trading in Congress, because elected leaders should be working for you — not their stock portfolios.

— Captain Mark Kelly (@CaptMarkKelly) October 11, 2022

“It’s not right for individuals to be elected to Congress and then be able to trade on information that the American people don’t have,” Kelly said in an interview with Yahoo Finance earlier this year.

Some Republicans are taking up the cause, as well. The Congressional Leadership Fund, a Republican super PAC closely aligned with House Minority Leader Kevin McCarthy, has made a habit of cutting attack ads against candidates who haven’t followed the disclosure rules around stock trading in the past. The fund has aired ads against Rep. Susie Lee (D-NV) and Rep. Tom Malinowski (D-NJ) in those key races.

Lee and Malinowski both failed to follow the rules of prompt disclosure of trades required by 2012’s STOCK Act around activity that took place in 2020 and 2021. Malinowski has since announced he put his assets into a qualified blind trust. Mitch McConnell, the leader of Senate Republicans, doesn’t appear to have broken any of the disclosure rules — but he has traded stocks, as have hundreds of lawmakers.

‘I want a vote on that bill’

Lawmakers will return to Washington in mid-November for the so-called lame duck session and could make one more push on the issue. House Democrats are still debating one bill that would require lawmakers and other officials to move their assets into a qualified blind trust or a mutual fund, ETF, or a government bond.

The new rules would also apply to the president, the vice president, White House staff, Supreme Court Justices, and Federal Reserve officials with some advocates fearing that going too big will sink the entire effort.

WASHINGTON, DC - SEPTEMBER 30: U.S. Speaker of the House Rep. Nancy Pelosi (D-CA) speaks during her weekly news conference at the U.S. Capitol on September 30, 2022 in Washington, DC. Speaker Pelosi held a weekly news conference to answer questions from members of the press. (Photo by Alex Wong/Getty Images) — During a press conference as Congress adjourned before the 2022 election, Speaker of the House Nancy Pelosi said “well, you have to have the votes to bring it up,” when pressed on why a stock trading bill had again been delayed. “This is a legislative process.” (Alex Wong/Getty Images)

House Minority Leader Kevin McCarthy has also promised to revisit the issue if he becomes the speaker. But it’s unclear how this issue will play out on the campaign trail. Both Spanberger and Kelly are two of the most prominent leaders in the effort to ban stock trading — and both could lose their jobs at the hands of voters next week.

Spanberger is in the middle of a toss-up race against Republican Yesli Vega that has drawn national attention and visits from Virginia Gov. Glenn Youngkin in recent days. Spanberger has also faced a series of campaign ads calling her a rubber stamp for Pelosi. Fact-checkers have knocked those ads because Spanberger called out Pelosi specifically on the stock trading issues.

Spanberger hopes her overall record of “just getting things to work” will carry her to victory next Tuesday. But she acknowledges that Congress’s repeated failure to tackle the stock trading issue hasn’t helped her make the case as an incumbent in 2022.

“I would’ve loved to have a vote on it two years ago,” she says. Striking a hopeful note, she added, “I expect to vote on that bill and I want a vote on that bill because it matters to people and it matters to voters.”

Ben Werschkul is a Washington correspondent for Yahoo Finance.

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