PITTSBURG (TNS) — For a state often divided by red and blue, Pennsylvanians have found common ground on one hot topic — banning high-level federal government officials from trading stocks.
A new poll by the University of Maryland’s Program For Public Consultation found an overwhelming majority of Pennsylvania Republicans and Democrats agree that sitting members of Congress, the Supreme Court and the president and vice president should not be trading stocks.
A staggering 74% of Pennsylvanians — including 70% of Republicans and 77% of Democrats — support a prohibition on stock trading by members of Congress and their live-in family members.Pennsylvanians also were strongly in favor — 79% Democrats and 72% Republicans — of prohibiting the president, vice president and Supreme Court justices from trading stocks.
“Keep them honest,” said one poll respondent. “We need to know they are serving the interest of the people,” and “It’s just too much of a conflict of interest,” others said.
There are more than a few examples in recent years of some members of Congress seeming to have mastered the art of perfectly timing stock buys right before a rally, and selling stock just before a crash.
Some observers feel there needs to be a balance between an outright ban on stock trading and something that still allows public officials to participate in the stock markets.
“A ban might actually discourage some people from serving in public office, because they may not feel as in control of their financial future,” said David Nows, an assistant professor of law at Duquesne University.
But investors don’t like when others have an unfair advantage in the stock market, and the bipartisan agreement on this issue among survey respondents sends a clear message that voters want public officials to play by the same rules.
This survey is part of a series of polls on major policies — the Swing Six Issue Surveys — being conducted in the run-up to the November election in six swing states. Unlike traditional polls, respondents in a Program for Public Consultation survey go through an online “policy making simulation,” in which they are provided briefings and arguments for and against each policy.
About 600 people were surveyed in mid-July in the six states seen as key in the upcoming election — in addition to Pennsylvanians, people were polled in Arizona, Georgia, Michigan, Nevada and Wisconsin — with another 1,000 polled nationally, according to the PPC report. For the state samples, the margin of error is around 4.5%.
The topic of stock trading by elected officials has come back to the forefront now that a bill prohibiting stock trading by members of Congress is out of committee and headed to the Senate.
Legislation to prohibit any stock trading in individual companies was first introduced in 2022. The current bill called Ending Trading and Holdings in Congressional Stock (ETHICS) Act would allow officials to buy and sell shares in large portfolios, like mutual funds. They could also retain their existing stocks if they turned over the management to a blind trust.
“By virtue of their positions, they have access to material non-public information that they can use to engage in a form of insider trading, which erodes trust in public markets,” said Jay Kesten, a professor at Florida State University and an expert in corporate governance and public markets.
“Ultimately, it’s deeply problematic when those who have been granted the public’s trust to govern on their behalf abuse that trust to enrich themselves,” Mr. Kesten said.
While 26% of the people surveyed by the University of Maryland researchers said they do not support a law banning high-ranking federal officials from trading stocks, 48% found the argument against a law convincing.
A much larger group [85%] found convincing the argument in favor of a new law banning stock trading.
“Americans of all political stripes have great concerns about potential conflicts of interest and self-serving decisions on the part of policymakers,” said Steven Kull, director of the Program For Public Consultation at the University of Maryland, in the official release.
Those polled in Pennsylvania who said a law prohibiting trading is unnecessary, explained their reasoning in comments submitted to the survey. They said making such investments is fine if government officials “do it legitimately,” and “we already have laws against insider trading, and members of Congress can be investigated and charged just like anyone else.”
Congress took some action to police its members in 2012, with the passage of the Stock Act. While the act doesn’t prohibit trading individual stocks, it requires members of Congress to report their stock market transactions on a public registry for public inspection.
Some of the reports thus far have been damning.
According to the non-partisan Campaign Legal Center, just before the stock market took a nosedive at the onset of the global pandemic in 2020, dozens of House and Senate members made over a thousand financial transactions after receiving closed-door briefings.
“To me, that’s a perfect illustration of why limiting the ability of public officials to trade stocks is the right way to go because it’s very difficult to discern when and how information is acquired,” said Jonathan Doh, who teaches business ethics at Villanova University.
A 2022 New York Times investigation reported that a fifth of all lawmakers had traded in companies directly related to their work on a congressional committee.
“How could you buy chemical company stocks when you sit on a committee that’s reviewing the chemical industry?,” said Robert Fragasso, chairman and CEO of Fragasso Financial Advisors in Sewickley.
“Of course, [public officials] should not put themselves in that conflict of interest situation,” he said.”
A prime example of the issue has played out in the Pittsburgh region with the wife of Rep. Mike Kelly, R-Butler, buying steel manufacturer Cleveland Cliffs stock in April 2020 while he was lobbying on behalf of the steel industry. According to filings, she sold the shares in January 2021 for a 400% profit.
The Office of Congressional Ethics launched a probe into the stock buy and later transferred the case to the House Committee on Ethics in July 2021. There have apparently been no updates on the status of the probe as of June, according to news reports.
But last week, the Senate took a major step with their ETHICS bill. The Homeland Security and Governmental Affairs Committee advanced a bill backed by a bi-partisan group of senators. The proposed bill, which has not yet been put up for a floor vote, has one change from the original. It will not include Supreme Court justices, which was an ask from the Republicans.
The bill as worded would still prohibit Congress, the president and vice president, and their live-in families from trading stocks of individual companies.
Some of the region’s political figures have spoken out on the issue.
Sen. John Fetterman, D-Pa., was one of more than 20 co-sponsors of the Senate ETHICS bill that was originally introduced in April 2023. In a press conference the day the bill was announced, he said, “Lawmakers should not be able to profit off the same companies that they are regulating.”
“No member of Congress should be profiting off of the companies they’re supposed to be regulating,” Rep. Summer Lee, D-Swissvale, said in a social media post earlier this year. “That’s why I’m proud to fight for legislation to ban all members of Congress from trading stocks.”
Sen. Bob Casey, D-Pa., in a statement in 2022, said barring lawmakers from trading stocks is “a critical step in restoring public faith in government.
“Members of Congress are here to deliver for their constituents, not to use confidential information to enrich themselves. I support the efforts of my colleagues to ban Members of Congress from trading stocks and will work to get legislation passed quickly.”
