House Democratic Leadership Designed Stock Trade Ban to Fail, Negotiators Say

Nancy Pelosi is a controversial figure, but one thing her supporters and detractors agree on is her tactical skill as a legislator and power broker. Somehow, those legendary skills failed her this week.

A general view of the U.S. Capitol Dome, in Washington, D.C., on Friday, September 9, 2022. (Graeme Sloan/Sipa USA)(Sipa via AP Images)
View of the U.S. Capitol Dome, in Washington, D.C., September 9, 2022. Photo: Graeme Sloan/Sipa via AP

Democratic leadership in the House of Representatives tanked an opportunity to pass a key ethics reform Thursday, according to several Democratic and Republican staffers involved in bipartisan efforts to ban stock trading by members of Congress. Those staffers say leadership’s move appears crafted to head off broad bipartisan support for reform.

After House leaders introduced a bill to curtail stock trading by federal officials on Tuesday, Democrats and Republicans pointed out the discrepancies between the leadership-approved version and the carefully negotiated bipartisan bills that predated it. Those discrepancies led to several members saying they could not vote on the measure without reviewing the text and determining whether the bill could draw enough votes in both chambers to become law.

When backlash to the leadership version of the bill emerged, leaders pulled it from the schedule. The decision to punt further action until after the midterm elections imperils the odds that any version of the ban will pass the House and Senate. Several sources close to bipartisan negotiations on the subject tell The Intercept that may have been the point. On Friday, Rep. Abigail Spanberger, D-Va., called it “a kitchen-sink package that they knew would immediately crash upon arrival.”

The “non-starters” in the leadership’s legislation, according to one Democratic staffer, included issues around the structure of qualified blind trusts, the inclusion of dependent children in the ban, and a measure expanding the ethics rules to members of the judiciary — sticking points that negotiators addressed in bipartisan reforms hashed out earlier this year. “The qualified blind trusts are kind of fake and are not an appropriate safeguard to really ensure that we have, you know, real divestiture from conflicting interests,” the staffer, who was not authorized to speak publicly on the matter, said.

Several Democratic and Republican staffers involved in earlier bipartisan efforts say House leadership made no effort to consult them on what sort of framework might pass. In particular, the process ignored a version of the legislation co-authored by Congressional Progressive Caucus Chair Pramila Jayapal, D-Wash., and Rep. Matt Rosendale, R-Mont. That measure also has bipartisan support in the Senate, where Sens. Elizabeth Warren, D-Mass., and Steve Daines, R-Mont., have introduced a corresponding bill. Rosendale’s chief of staff, Trevor Whetstone, told The Intercept his office has long believed that package has the votes to pass both chambers.

“It wasn’t a real process,” one Democratic staffer told The Intercept. “There were all these things thrown in here that on the surface look good, but make it so expansive, that, you know, it’s not going to make it to the President’s desk.”

Those sources claim that the leadership’s introduction — and quick scuttling — of legislative text on the issue make sense only if viewed as a calculated play to kill efforts at reform. “Several of the key issues that were worked out in some of the bipartisan efforts just weren’t addressed,” a Republican staffer told The Intercept. “There’s a lot of overwhelming consensus here, a lot of work that’s been done to achieve that. You don’t completely ignore all that on accident.”

Representatives for House Speaker Nancy Pelosi and Majority Leader Steny Hoyer did not respond to requests for comment. Christiana Stephenson, the communications director for House Democratic Caucus Chair Hakeem Jeffries, did not address the substance of the questions, instead referring The Intercept to Jeffries’s public comments on the scuttling of the stock trade ban earlier Thursday, where Jeffries deflected responsibility to Hoyer, who controls the floor schedule. Hoyer has expressed varying levels of hostility to any potential reform for months. Pelosi, one of the wealthiest members of Congress, has mostly declined to speak at length on the issue since declaring members of Congress have a right to participate in the “free market” in December of last year.

Joel Valdez, a spokesperson for Rep. Matt Gaetz, R-Fla., who has been an outspoken advocate for reforms, told The Intercept that the episode is indicative of how Congress functions when popular ethics reforms are pitted against the financial interests of members. “The last-minute shenanigans are unfortunate, but predictable, because Congress is corrupt,” he said.


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The comments echo some of the implications made publicly by members who have been pushing for such legislation, including vulnerable front-liners who see the issue as electorally beneficial. As Insider’s Bryan Metzger reported Thursday afternoon, Reps. Chip Roy, D-Texas, and Spanberger, who have partnered on one of several bipartisan efforts to ban stock trades, made comments that also seemed to suggest they were suspicious of leadership’s maneuvering. “I don’t think this bill was written to pass the House,” Spanberger said.

While some conservative Democrats — most notably retiring Blue Dog and perennial corporate-friendly obstructionist Stephanie Murphy, D-Fla. — have tried to claim reforms are a tough sell for front-liners, that argument is hard to square with the considerable amount of data indicating any ban would be overwhelmingly popular. With further action delayed until after the midterms, Democrats have deprived members in tough races of the benefits the popular legislation might confer.

The fate of any potential reform now rests on the volatile politics of what appears to be an increasingly packed lame duck session. The session is set to be dominated by negotiations over the annual budget and the National Defense Authorization Act — two sprawling and time-consuming packages that are considered must-pass. In addition, other higher priority pieces of legislation, like the Electoral Count Act and the Respect for Marriage Act, may sap away what little legislating energy remains. Those bills are expected to advance because careful bipartisan negotiations have primed them to achieve consensus, regardless of how the November elections turn out. House leadership has ensured the stock trade ban is in no such position.

One Democratic staffer summed up leadership’s feint: “We have bills that were bicameral and bipartisan, and none of us involved with those were consulted, and now we have a bill that can’t move. … A lot of folks are calling the release of any text a step forward. But it’s not a genuine step forward.”

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