Congress Must Do More to Address Conflicts of Interest After Insider Trading Scandal
Statement of Craig Holman, Government Affairs Lobbyist, Public Citizen
Note: In January 2017, Public Citizen filed a complaint against U.S. Rep. Chris Collins (R-N.Y.) alleging congressional insider trading. The 116th Congress amended its ethics rules to prohibit members from sitting on the boards of public corporations and directed the U.S. House Ethics Committee to address other potential conflicts of interest related to outside service or positions. Today, Public Citizen submitted recommendations to the committee calling for further reforms.
In the wake of Collins’ insider trading scandal, the nation was stunned to discover that congressional ethics rules allowed a lawmaker to sit on the board of directors of a corporation, buy and sell stock of that company and promote legislation that could benefit the bottom line of the company and its stock holders.
Congress promptly changed its rules to prohibit members from sitting on boards of public companies, but that is not enough. The same conflicts of interest arise when a lawmaker sits on the board of a private company or a non-profit organization that employs family members of the lawmaker, or when the lawmaker owns stock in a company their committee oversees and regulates.
Congress must strengthen its ethics rules by extending the ban on serving on a board of directors of a public company to LLCs and private corporations, establishing recusal requirements for members who serve as an officer or director of a non-profit organization and requiring that members and senior staff avoid individual stock ownership in entities they oversee from their official committee positions.