When it comes to conflict-of-interest issues, sometimes it’s easier to see the ethical path when someone else is walking it.
That’s what may have happened in Congress, which is able to see the problems that could occur if people in government agencies own stock in industries that they oversee or that their department policies could influence. Such financial relationships are forbidden by Congress, if only to avoid the perception of undue influence.
Congress, unfortunately, does not see as clearly when it comes to keeping its own appearance clean.
It was only this year that the STOCK Act was passed. The Stop Trading on Congressional Knowledge Act for the first time forbids members of Congress from using inside knowledge — gained from their jobs — to profit in the stock market. That’s fine, although it is a difficult practice to discover, much less prove.
However, members of Congress can and do trade in the stocks and bonds of companies that are lobbying them to vote a certain way on legislation, or to introduce or block bills that could positively affect stock they own.
The Washington Post recently published results of the newspaper’s research that revealed that 130 members of Congress and their families own stocks worth tens of millions of dollars in companies that are lobbying about bills that come for committees upon which the lawmakers serve.
It’s all perfectly legal. But it surely opens them up to fair questions about whether their actions were influenced by how the decision affected their net worth.
Members of Congress interviewed for the story dismissed the idea that their stock holdings influenced their votes. They make the fair point that many of their assets are controlled by financial managers, and the members of Congress are likely not even aware that they have stock in the company whose representative is testifying before the committee. Further, some had net worth so large that it was virtually impossible that some of their holdings wouldn’t, at last on paper, overlap with their congressional duties.
The same, though, can be said for administration employees, yet they are prohibited — and rightly so — from investments that could prosper as a result of the companies they oversee.
The same rules should apply for Congress. While the story failed to produce a conflict-of-interest smoking gun, it did turn up 30 instances of congressmen who significantly reshaped their portfolios following high-level administrative briefings during the financial meltdown. At the very least, that suggests some may have been privy to information that motivated those decisions.
This is not a partisan issue. Of the 130 congressmen identified by the Post, 68 were Democrats and 62 were Republicans.
It’s also not impossible to resolve the perception. One obvious solution is for congressmen to place their investments in a blind trust. Six U.S. senators currently do so. The House does not keep records on this topic.
Such care to preserve the public trust should not be so rare as six senators out of 100. Congress slowly took a first step toward solving the problem with the STOCK Act. But more must be done to remove the perception — or worse — of this conflict of interest.
— LIVINGSTON DAILY