‘Managed Independently on My Behalf’

Rashida Tlaib pens an op-ed reigniting the decade-long debate about the legality and morality of congressional stock trading

Late last month, the Detroit Free Press published an op-ed penned by Rashida Tlaib in which the Michigan congresswoman detailed her fierce opposition to her colleagues owning stock in companies that profit from endless war.

In the January 29 piece, Tlaib described the inherently despicable conflict of interest that arises when lawmakers benefit financially from legislation they themselves crafted and voted for.

“In the last three years, defense contractors like Lockheed Martin, RTX (formerly Raytheon), Honeywell, General Dynamics, Boeing and Northrop Grumman have taken over $380 billion in taxpayer money, according to data from Defense News and Forecast International, and made over $85 billion in profits, according to annual reports of the six firms,” Tlaib writes.

The staggering sums changing hands have done wonders for congressional portfolios.

In December, an analysis conducted by the Quincy Institute for Responsible Statecraft revealed that 37 members of Congress traded between $24 million and $113 million in defense stocks over the course of the past year.

The data show that Nancy Pelosi moved as much as $5 million in defense stocks in 2024. However, there was one lawmaker whose broker was even more active. According to Quincy, last year Congressman Josh Gottheimer reportedly traded between $22 million and $104.4 million in Pentagon stocks.

How Gottheimer approaches foreign policy and the issues that directly affect his investments shouldn’t be surprising to anyone. A glance at his record reveals that if there’s an unnecessarily hawkish or reckless and aggressive stance to take, there’s a good chance the New Jersey representative has taken it.

These positions continue to endanger the lives of millions of people around the world, but they also necessitate enormous contracts for weapons manufacturers. This is the type of infinite money glitch Wall Street loves. Lawmakers like Gottheimer set it in motion and then use it to get rich. That America’s elected officials could enrich themselves via the foreign entanglements and occupations they facilitate should be illegal. This is especially true for the individuals that are responsible for doling out the cash to begin with.

Last September, Sludge produced a comprehensive list of the members of Congress who are personally invested in war. This breakdown included roughly one-quarter of the lawmakers who sit on the immensely influential Senate Appropriations Committee. On its website, the committee describes its jurisdiction as writing the “the legislation that allocates federal funds to the numerous government agencies, departments, and organizations on an annual basis.”

Given that the weapons sector now soaks up approximately 54% of all federal discretionary spending, the fact that seven of the senators on this committee are actively buying and selling stock in the companies whose fate they control is a scandal that should anger every American. The seven individuals follow below:

Jerry Moran

John Boozman

Shelley Moore Capito

Bill Hagerty

Markwayne Mullin

Susan Collins, chair

Gary Peters

Seven additional lawmakers who also appear on this list sit on the committee’s counterpart in the other chamber of Congress, the House Committee on Appropriations:

House

Scott Franklin

Michael Guest

Glenn Ivey

David Joyce

Susie Lee

Dan Newhouse

Hal Rogers

There are plenty of other names worth mentioning that are included in Sludge’s list of lawmakers who’ve seized on the opportunity to cash in on the Pentagon’s racket.

Jacky Rosen, a member of the Senate Armed Services Committee, owns as much as $180,000 in General Electric, the massive conglomerate that doesn’t just produce washing machines and refrigerators, but also an extensive range of hardware for the military, including flight control systems, non-explosive components for weapons systems, and engines and propellers for the Air Force.

Gerry Connolly serves as the ranking member of the Oversight Committee, the House’s primary investigative body. This hasn’t stopped the Virginia congressman from holding up to $248,000 apiece in both SAIC and Leidos, the two engineering and IT giants serving the Pentagon.

Republican Congressman Pat Fallon is the owner of as much as $250,000 in Boeing stock.

House Foreign Affairs Committee member Michael McCaul, the fanatical war hawk and relentless supporter of funneling weapons to Ukraine, Taiwan, and just about everywhere else, owns a combined $2.6 million in three weapons contractors.

Oklahoma House member Kevin Hern boasts a defense portfolio that totals approximately $2.2 million.

Perhaps the most noteworthy lawmaker mentioned is Ro Khanna, who loves to play the role of progressive on television and social media but is really anything but. Over the years, Khanna has repeatedly advocated for a ban on congressional stock trading and even sponsored legislation to prohibit this kind of activity. The resolution Khanna introduced more than a year ago has gone nowhere and given the congressman’s rather sizeable portfolio, one can’t help but wonder if his “efforts” to put an end to this weren’t purely for show.

After all, just because it’s still legal for members of Congress to own stock in companies they’re tasked with regulating doesn’t mean that members like Khanna have to keep reinvesting. If Khanna really wanted to abolish this practice, he’d set an example, but he hasn’t. According to the data reviewed by Sludge, Khanna owns as much as $843,000 in six defense-related corporations.

Furthermore, it should be noted that this resolution, H. Res. 938, doesn’t mention anything about stock trading by congressional spouses or dependent children. One glance at the image below and it’s not hard to see why Khanna chose to omit this language from his proposal.

Khanna co-sponsored a separate proposal [spearheaded by Congresswoman Abigail Spanberger] that did include this provision [it required that all securities be placed into a blind trust], but that bill was doomed to fail from the day it was filed. Both bills were introduced during the 118^th Congress, at a time when the two Democrats were certain that the Republican-majority House would never pass them.

This is far from a new hustle. Congress has spent more than a decade pretending to rectify a problem it has absolutely no interest in solving.

After a November 2011 60 Minutes exposé about lawmakers trading on privileged information unavailable to the public, Congress felt it had no choice but to act. The public outcry that would ensue is how the Stop Trading on Congressional Knowledge Act (STOCK Act) – legislation signed by President Obama in 2012 – was born.

In theory, what the law was supposed to do was level the playing field to ensure that America’s elected officials were following the same rules as everyone else. How the law was actually implemented ensured that this didn’t actually happen.

For starters, the STOCK Act was incredibly weak to begin with. It mandated certain reporting requirements for congressional members but their ability to trade as they pleased remained intact. Because it was so incredibly difficult to prove, the ability of lawmakers to engage in what under any other circumstances would absolutely be considered insider trading also remained unchanged.

At the 11^th hour, the nation’s leaders conspired to strip some of the language from the text, watering down an already meaningless bill even further.

Congressional staff and most Executive Branch employees would now be exempt from filing the previously mandated financial disclosure information. The searchable public database of all governmental trading activity that the American people had been promised was also scrapped.

As explained by an old episode of Jennifer Briney’s Congressional Dish podcast, it wasn’t just that this vital piece of legislation was gutted. What’s really important is how these changes were pushed through, days before the bill’s more robust reporting requirements were scheduled to take effect.

The provisions of the STOCK ACT were scheduled to be enforced beginning on April 15, 2013.

On April 11, Senator Harry Reid passed S. 716 – the amendment with the aforementioned changes – via a congressional procedure known as unanimous consent. This essentially allows a piece of legislation to pass without a formal vote. With most senators already gone for the day, Reid just read the name of the bill into the official record and with that, the Senate’s approval of the changes was approved.

The following day, Republican House Majority Leader Eric Cantor essentially did the same. After his colleagues finished their legislative schedule for the day and cleared the chamber, Cantor introduced and passed S. 716, a bill that hadn’t been added to the House’s itinerary for that particular day. After Cantor asked for unanimous consent, the House Clerk declared that “without objection” the bill was passed. There wasn’t any objection because the room was empty.

On April 15, President Obama signed the bill into law.

The issue would resurface in the wake of the pandemic following reports that many members of Congress dumped their portfolios after being briefed on COVID. This occurred weeks before how severely the virus would impact the global economy was widely known.

During this time period, North Carolina Senator Richard Burr sold 33 stocks, with the transactions reportedly totaling between $628,033 and $1.72 million. The late Diane Feinstein sold securities valued between $1.5 million and $6 million.

Kelly Loeffler began her selling spree on January 24. As they all do, the Georgia senator insisted that these trades were completed independently by a third-party advisor, without her knowledge. As it just so happens, this completely autonomous financial oracle made these calls without any input from Loeffler on the same day that she attended a closed-door briefing on the impending coronavirus threat.

Loeffler sold millions in an array of companies, including an $18.7 million divestment in Intercontinental Exchange. Her husband, Jeffrey Sprecher, is chair of the New York Stock Exchange as well as its holding company, Intercontinental Exchange.

During this same timeframe, the couple also bought substantial holdings in Dupont, which produces protective gear to guard against virus transmission, as well as telecommuting company Citrix. The latter was purchased on the day of the Senate Health Committee’s private briefing.

The fresh wave of scrutiny would force Washington’s hand again but not to actually do anything of substance.

In February 2022, Nancy Pelosi directed House Democrats to draft a bill to finally put an end to congressional stock trading. This would take another seven months to accomplish.

When the proposal was finally made public, it was introduced by Congresswoman Zoe Lofgren.

Earlier that month, the New York Times published an extensive breakdown of questionable trades by 97 members of Congress. This report noted that the California representative had nine potential conflicts of interest in her portfolio and that “Ms. Lofgren’s husband traded stocks or bonds in several pharmaceutical companies, including AbbVie, Gilead Sciences and Pfizer, at a time when the Judiciary Committee, of which she is a member, was investigating drug prices.”

After a draft was introduced in September, on the third-to-last day before a month-long recess, House Majority Leader Steny Hoyer declared that lawmakers simply didn’t have enough time to analyze the specifics of the bill.

A few months later, Josh Hawley introduced a similar piece of legislation intentionally titled the Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act. Now that Democrats were no longer in control, the Republican Party had the power to act on Hawley’s bill, but of course they never did.

Tlaib’s bill, the Stop Politicians Profiting from War Act of 2024, is more specific and applies directly to the weapons sector.

As the proposal’s summary relays, the draft aims to prohibit “Members of Congress, their spouses, and their dependent children from owning or trading stocks, bonds, commodities, futures, or any other form of security from a defense contractor or which are significantly based upon defense contractors.”

Because the individuals who run Congress have no intention to alter the highly lucrative status quo, it’s a near certainty that this legislation will likely suffer the same fate as all of its predecessors.