Josh Hawley has it right: Members of Congress shouldn’t be playing the stock market

Sen. Josh Hawley of Missouri has a good idea that deserves the widespread public support it’s getting.

Wednesday, the Republican said he would offer a bill prohibiting members of Congress from holding, selling or purchasing shares of stock in individual companies. He thinks U.S. senators and representatives should not vote on policies that directly impact their net worth.

“Wall Street and Big Tech work hand-in-hand with elected officials to enrich each other at the expense of the country,” Hawley said in a statement. “Here’s something we can do: ban all members of Congress from trading stocks.”

Democrats have proposed similar measures.

It’s an important issue. According to the website Capitol Trades, members from both parties have bought or sold stocks and assets worth more than $107 million over the last three months. Stocks bought and sold include companies such as Microsoft, Apple and Netflix.

According to his latest financial disclosure, Sen. Jerry Moran of Kansas owns stock in Alphabet (Google), Costco, CVS, Facebook, Exxon Mobil, Johnson & Johnson and Amazon. All of those companies are deeply involved with federal policy and legislation. The potential for a conflict of interest seems clear.

Any measure requiring Moran to either sell those shares or place them in a blind trust would help restore public confidence in congressional decision-making. Under a blind trust, members would not know if their decisions would impact their finances.

Other members, including House Speaker Nancy Pelosi, should also stop buying, selling or holding stocks.

Of course, there are important loopholes in Hawley’s bill that deserve close attention. He would allow members of Congress to hold shares in mutual funds, which are like a bucket of stocks.

Mutual funds are presumably less prone to legislative manipulation because they hold lots of different stocks. As it turns out, though, the potential for conflict is still there.

Hawley’s disclosure, for example, shows he owns shares in a mutual fund called Fidelity Contrafund. Hawley’s investment is worth between $50,001 and $100,000.

Where does Fidelity Contrafund invest the senator’s money? Surprise! Big Tech: Amazon, Facebook, Microsoft, Spotify, Twitter and Alphabet, according to the fund’s 2021 Securities and Exchange Commission filing.

That means Josh Hawley is an indirect investor in, and supporter of, the very tech companies he attacks on a daily basis. And it isn’t a deep secret: Hawley (and the public) can generally know the top stocks owned by any mutual fund.

Fidelity Contrafund also owns (or owned) shares in WuXi AppTec, a China-based pharmaceutical research firm. Hawley is an indirect investor with WuXi as well.

Sens. Jon Ossoff of Georgia and Mark Kelly of Arizona, both Democrats, have introduced a bill requiring members of Congress to place stock assets in a blind trust. “Members of Congress should not be playing the stock market while we make federal policy and have extraordinary access to confidential information,” Ossoff said.

Their bill also exempts mutual funds from the blind trust requirement. That seems like a mistake.

But the error should not deter Congress from consideration and passage of a comprehensive bill getting our elected representatives and their immediate families out of the stock market, at least for the time they serve.

Conflicts are clear and unavoidable. The public deserves better.

This story was originally published January 14, 2022 at 5:00 AM.