![Members of the U.S. congress have traded stocks in the same companies appearing before them as legislators, the Washington Post reveals. (Photo via shutterstock) Members of the U.S. congress have traded stocks in the same companies appearing before them as legislators, the Washington Post reveals. (Photo via shutterstock)](https://www.mintpress.net/wp-content/uploads/2012/06/us-flag2.jpg)
The latest instalment in an extended investigation by the Washington Post into American lawmakers and their personal finances revealed that members of Congress frequently trade in companies while simultaneously dealing with legislation that would affect that particular stock.
The Washington Post examined 45,000 individual congressional stock transactions that occurred between 2007 to 2010 to reveal that 130 – nearly a quarter – of the nation’s lawmakers traded between $85m and $218m in 323 companies that had registered to lobby on legislation that appeared before the House. (There is a range because members of Congress do not have to register the exact amount of each share transaction, but instead indicate that it fell in a certain monetary range).
Some of the lawmakers’ transactions were made only a short time before or after major legislative changes.
The study is an even-handed reproof to both sides of American politics: 62 Republican and 68 Democrat members of congress are cited in the report.
The Washington Post is careful to point out that its analysis does not suggest that any politician knowingly traded stocks on the basis on information obtained through their work on Capitol Hill.
Related article: Analysis: Lawmakers should not be lobbyists
Senior government officials are prohibited from trading stocks in industries they may influence, but members of congress are not restrained. And although the Stock Act (Stop Trading on Congressional Knowledge) passed in April 2012 prevents congressmen and women and civil servants from obtaining direct financial gain through their privileged positions, this study is strong proof that more should be done.
The Washington Post’s analysis, complete with interactive graphics, provides four case studies on individual congressmen and women.
In one example, Republican congressman Ed Whitfield, from Kentucky, sold up to $100,000 worth of shares in energy giant General Electric that he had held for 12 years just weeks before the share price fell by $6. Whitfield was a member of an energy subcommittee charged with drafting legislation on climate change before which General Electric was a registered lobbyist. It was Whitfield’s own party that defeated the bill in the Senate after which the share price plummeted.
There is no suggestion that Whitfield did anything wrong.
The investigation does raise questions about potential conflicts of interest. The Washington Post suggests that blind trusts are a solution to the murky mix of personal interests and political knowledge.
But while a small number of Capitol Hill members have their assets managed in such trusts, most politicians, including former Presidential Democrat candidate, John Kerry, delegate the management of their interests to financial advisers or to family members. In response to questioning, one congressman’s defence was that there was no possible conflict of interest because he never speaks to his wife about investment decisions.
In the UK members of parliament are not obliged to publish share transactions. They only need to register a substantial holding – more than 15% of a company or a shareholding worth more than their annual parliamentary salary. Many members put substantial shareholdings into blind trusts to avoid conflicts of interests. The Guardian reported that 16 Coalitions ministers had such trusts, in 2011. A Cabinet office statement concluded that blind trusts were the ‘fairest way’ to manage Ministers’ financial interests.
The Washington Post’s research does not show evidence that Congressmen had been lobbied.
Related article: PR uncovered – Top lobbyists boast of how they influence the PM
Last week the Bureau ran a major investigation into the House of Lords looking at conflicts of interests, undeclared business interests and their sponsorship of business events in the House. Read the investigation here.
Read the original article in the Washington Post here.
This story was originally published by The Bureau of Investigative Journalism.