Complaints on STOCK Act violations stack up against members of Congress | Fox Business

Published September 07, 2021

Watchdog groups question lawmakers' late disclosure of stock transactions

Check out what's clicking on FoxBusiness.com.

A government watchdog group asked the Office of Congressional Ethics last week to investigate Assistant Speaker of the House Katherine Clark, D-Mass., for apparently failing to timely disclose up to $285,000 in financial transactions — making the potential successor to House Speaker Nancy Pelosi, D-Calif., the latest among numerous House and Senate members to face ethics complaints about allegedly violating the STOCK Act

The Stop Trading on Congressional Knowledge Act, better known as the STOCK Act, has gained renewed attention during the COVID-19 pandemic when some lawmakers were suspected of using information from government roles to profit. 

Broadly, the law prohibits members of Congress, congressional staffers and certain members of the executive branch and federal judiciary from engaging in insider trading based on information they learn through their government jobs. One provision of the law requires members of Congress to make a "full and complete" statement of their assets and their spouse’s assets, debts and income, as well as periodic reports of financial transactions that exceed $1,000 within 30 to 45 days of the transaction.

PROGRESSIVES' TAX-THE-RICH DREAMS FADE AS DEMOCRATS STRUGGLE FOR VOTES

Other lawmakers targeted with ethics complaints in recent weeks for potentially violating the law have included former Democratic National Committee Chairwoman Rep. Debbie Wasserman Schultz of Florida and Sen. Rand Paul, R-Ky.

Specifically, Clark, first elected in 2012, failed to publicly disclose 19 personal stock transactions by her husband within 45 days, according to the ethics complaint. This included investments in Google’s parent company Alphabet Inc.; Best Buy; First Solar; investment firm BlackRock; pharmaceutical company GlaxoSmithKline; data management company Iron Mountain; and water technology company Xylem Inc. The transactions valued between $19,019 and $285,000, were made on June 4 but were not disclosed until Aug. 15.

Clark’s potential violation was first reported by Business Insider. Clark’s office did not respond to voicemail and email inquiries from Fox News for this story last week. 

The Foundation for Accountability and Civic Trust has filed a complaint against Wasserman Schultz, as well as Reps. Lori Trahan of Massachusetts and Kathy Castor of Florida for tardy financial disclosures. Last week, the group also filed a complaint against freshman Sen. Mark Kelly, D-Ariz, but the Senate Ethics Committee appears to have already resolved the questions regarding Kelly’s transaction.

HOW TO SQUEEZE AN EXTRA 24% OUT OF SOCIAL SECURITY

"These disclosure reports are the only way for citizens and watchdog organizations to monitor election officials and determine if they are profiting from positions," Kendra Arnold, executive director of FACT, told Fox News. "The only way to determine this in a timely manner is if they file the reports on time. Some lawmakers file the reports two years or six months late."

The complaint against Wasserman Schultz, first elected in 2004, says the former DNC chair bought up to $15,000 in stock in Westell Technologies, a telecommunications firm, while her dependent child bought up to $45,000 in stock in the company. The purchases were in October 2020, but she did not disclose the trades until July 2021 – well past the required deadline.

Business Insider first reported on the three House members on Aug. 2. FACT made the complaints on Aug. 20. The offices of Wasserman Schultz, Castor and Trahan did not respond to Fox News inquiries for this story.

The STOCK Act, enacted in 2012 with broad bipartisan support and signed by President Obama, was high profile at the time it passed in response to reporting by author Peter Schweizer in his book, "Throw Them All Out: How Politicians and Their Friends Get Rich Off Insider Stock Tips, Land Deals, and Cronyism That Would Send the Rest of Us to Prison," and by 60 Minutes.

"All members are trained on this law. It is a commonly known law," Arnold continued. "When it was passed, it was high profile. It is especially puzzling when longstanding Senate and House members don’t follow it." 

The complaint against Castor alleges the Florida congresswoman first elected in 2006 bought $45,000 worth of Berkshire Hathaway stock in June and July of 2020 but waited a year – July 27, 2021 – to disclose the investments.  

The ethics complaint against Trahan alleges the Massachusetts congresswoman first elected in 2018, sold up to $15,000 in the software company Stella Connect on Sept. 10, 2020 but waited 10 months – July 27, to disclose the matter. 

Senators, as well as several other House members, have been accused of violating the STOCK Act in recent months. 

In the case of Paul, the Kentucky senator, it was for a purchase his wife Kelly Paul made of up to $15,000 stock in Gilead Sciences, maker of the medicine remdesivir in February 2020 before the FDA approved it for treatment of COVID-19. She responded that she bought the stock based on the World Health Organization information touting the drug as a promising COVID-19 treatment and that she lost money. 

Still, the Campaign Legal Center filed a complaint against Paul on Aug. 16.

"This filing, coming over a year late and detailing the financial interest a senator held in a company producing an antiviral drug from the onset of a global pandemic, is a clear example of why greater STOCK Act enforcement is needed," Kedric Payne, general counsel and senior director of ethics at Campaign Legal Center, said in a statement.  

The Campaign Legal Center also filed a complaint against Sen. Tommy Tuberville, R-Ala., in July alleging the freshman senator failed to properly report 130 separate stock and stock option trades valued at a price of at least $894,000.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

A Tuberville spokeswoman told CNBC the senator’s financial advisers handle his stock trading and that he didn’t know about the individual stock and stock option trades and thus didn’t realize the need for disclosure for the STOCK Act’s deadline. She said the office put processes in place for timely reporting in the future. 

CLICK HERE TO READ MORE ON FOX BUSINESS

FACT’s complaint against Kelly, the Arizona freshman Democratic senator, filed last Monday says he bought up to $15,000 in Boom Technology by exercising his stock option on April 13, but he didn’t report within the 30-45 day deadline. He eventually reported on Aug. 16. However, on Aug. 31, one day after FACT filed the complaint, the Senate Select Committee on Ethics provided a waiver to Kelly for the late filing. This is because Kelly’s office previously explained the transaction was required for the senator to move the asset into his newly established, qualified blind trust that the Ethics Committee had approved, and didn’t involve the purchase of any new asset. Kelly merely exercised the options that he already held.

"Based upon the circumstances described and the committee’s precedent with respect to penalty waivers, the committee approves your waiver request," the Senate Select Committee on Ethics responded on Aug. 31. "Because you have filed your report and the committee has waived the penalty, the committee considers the matter of this penalty closed."

https://www.foxbusiness.com/politics/stock-act-violations-complaints-members-of-congress.amp?__twitter_impression=true