"incredible" good luck

According to the Market Watch website, members of Congress and their spouses not only make a lot of stock investments, but also their return on investment is significantly above average.

Members of Congress and their relatives traded $355 million in shares last year, including buying $180 million in shares and selling $175 million in shares. Of this, Republican lawmakers are involved in stock transactions worth about $201 million and Democrats are involved in about $154 million. Last year, 41 members of the US Congress bought and sold more than 500000 US dollars in stocks, including Texas Congressman McCall, Republican, and California Federal Connor, Democrat Connor, known as the two "stock traders" on Capitol Hill. McCall was revealed to have bought about $31 million of shares and sold about $35 million in 2021. Connor bought about $34 million in shares and sold about $19 million.

Congress has become a place for many members to get rich. The New York Post used New Jersey Federal Congressman Gottheimer, a Democrat, as an example to describe the congressman's "operation" on the stock market. Gottheimer is one of the most active "stock traders" on Capitol Hill, with 134 trades in the first quarter of 2021 alone. After years of small stock trading, Mr Gottheimer turned to riskier options trading last year, worth as much as $1 million each. Last year, Gottheimer bought 64.5 million options and sold 62.18 million, according to public information collected by the website extraordinary Whale, which tracks politicians' stock market investments. The website estimates Gottheimer's return on investment at 12.7%.

Crisis becomes a good opportunity for investment

The New York Times quoted a survey as saying that some members of Congress made a profit by buying stocks before prices rose and selling stocks before prices fell, relying on their knowledge of policy changes. A number of US media reports show that many members of Congress have taken advantage of the crisis to "get rich," and the military conflict between Russia and Ukraine and the COVID-19 epidemic have become important investment opportunities for them.

According to a report in the Beast Daily on March 19, more than a dozen US congressmen were nervously trading stocks before and after the outbreak of the military conflict between Russia and Ukraine. Data show that from February 1 to March 19, the stock trading volume of some members of Congress reached 7.7 million US dollars. At least 20 members of Congress bought shares in Raytheon and Lockheed Martin Corp after the conflict between Russia and Ukraine, the US Business Insider website said in May. Shares of the two companies rose sharply, benefiting from U. S. military aid to Ukraine. In addition, Florida Rep. Schultz, a Democrat, also bought energy stocks in late January. Since the purchase, the prices of these stocks have also skyrocketed.

On February 13, 2020, about a month before World Health Organization (WHO) declared COVID-19 a pandemic, Senator Burr, a Republican of North Carolina, sold $1.6 million worth of shares in time to avoid a subsequent stock market circuit breaker. In addition, at least 75 members of the US Congress bought and sold shares of pharmaceutical companies, including Johnson & Johnson and Pfizer Inc, at the beginning of the outbreak, which was strongly boosted by trillions of dollars in relief bills passed by the US government.

"depend on the mountain to eat the mountain"

The alleged insider trading by members of the US Congress not only makes the public feel unfair, but also makes them worry that conflicts of interest may affect US policy. The Business Insider website recently reviewed nearly 9000 congressional financial disclosure reports and interviewed hundreds of people and found that many US congressmen have business in mind.

According to the website, more than 200 members of Congress and senior congressional staff are suspected of violating the principle of conflict of interest, including 15 lawmakers responsible for formulating US defense policy who actively invest in arms manufacturers. more than a dozen "environmentally conscious" Democratic lawmakers invested in fossil fuel companies, while 16 lawmakers bought and held shares in tobacco companies, including some who openly opposed smoking. The business insider website conflicting Congress rated members of Congress for suspected conflicts of interest and found that 13 senators and representatives were rated as red "dangerous" and 113 as yellow "critical".

In fact, many institutions in the United States, including Congress, violate the principle of conflict of interest. A 2021 Wall Street Journal investigation found that 131 federal judges and their families held or bought or sold shares in hundreds of cases from 2010 to 2018. In addition, Clarida resigned as vice chairman of the Federal Reserve in January on suspicion of insider trading. A day before Federal Reserve Chairman Powell announced the bailout, Clarida bought an equity fund that was accused of violating the conflict of interest principle.

The stock law is a "toothless tiger".

Why is there no law to limit the public outrage caused by members of the US Congress suspected of insider trading? In fact, the United States passed the stop using Congressional Information Trading Act (referred to as the Stock Act) in 2012 to prohibit insider trading by lawmakers, but the law is better than nothing.

Under the US Stock Act, members of Congress, the executive branch of Congress and their staff are not allowed to use non-public information to trade stocks. The above-mentioned persons are required to report the trading of stocks and other securities with a trading value of more than $1000 within 45 days to prevent them from profiting from undisclosed information. In addition, the above-mentioned persons are required to publish their stock and securities trading information online in a searchable, classifiable and downloadable form.

However, the U. S. Stock Act does not prohibit members of Congress and their relatives from holding or buying and selling stocks, and even if members of Congress violate the relevant provisions of the law, the penalties are very small. According to a recent survey by Business Insider, at least 55 members of Congress and 182 senior congressional staff submitted stock trading reports late in 2020 and 2021. They have a variety of excuses, such as not knowing the existence of the stock law, clerical errors, accountants' mistakes and so on. Under the stock law, late filing of the report is subject to a fine of $200, but Congress has not made public the penalty, so it is not clear how hard the law will be enforced. In addition, in the past decade, very few people have been prosecuted for violating stock laws. Although insider trading is common, it is difficult to prove. According to a 2020 study, only 15% of insider trading in the United States has been discovered and prosecuted.

The US stock law is already a "toothless tiger" and is extremely weak, but the US Congress used a quick process to pass an amendment to the law in 2013, abolishing provisions such as members of Congress that need to store their stock trading reports in a searchable database, further weakening the supervisory role of the law.

Few people believe in the "self-regulation" of Congress

Members of the US Congress are suspected of making profits through insider trading, which has aroused strong dissatisfaction in the media and the public. According to a survey, 76% of voters believe that members of Congress and their spouses have an unfair advantage in the stock market. Sixty-seven percent of American voters said lawmakers should be banned from trading stocks.

Despite general public support for banning lawmakers from investing in stocks, the vast majority of lawmakers from both parties in the United States are surprisingly consistent on this issue, which is rare in the politically polarized United States. Republican Congressman Sessions said there was no need for a ban, the Guardian reported. Democratic Congressman Loria asked the reporter: "Why do you think members of Congress are born bad guys or corrupt elements?" We already have a stock law that requires members to report on stock trading, so I strongly oppose any similar legislation that prohibits members of Congress from buying and selling stocks. "

The above remarks caused a storm of public opinion. According to the US Punchbowl News news network, several sources revealed that House Democrats may introduce a bill in August this year to prohibit members of Congress, their spouses and senior congressional staff from buying and selling stocks. The new bill would require lawmakers and other relevant parties to entrust their shares to a secret trust (handing control to an independent third party) or sell them all, otherwise they will be fined heavily. Republican Senator Holly has proposed a similar bill, but his bill does not include a fine clause, the Guardian said.

Some US media reported that the above-mentioned bill may be voted on in Congress in September. However, there are still many obstacles to passing these bills. U. S. President Joe Biden has been silent on related issues. Time is running out. Members of Congress will leave Washington, D.C., in August, and when the recess ends, they will soon have to prepare for the mid-term elections, making it difficult to pass the bill in September.

The New York Post interviewed some senior officials in Washington, D.C., about legislation banning lawmakers from stock trading. Some people told the newspaper that the possibility of real self-regulation in Congress was so low that it was ridiculous to say, "Why do they do things that are bad for them?" Some officials said that the bipartisan bill may be proposed to catch the eye rather than to carry out serious reforms. A cynical Senate staff member said bluntly: "this is all a show." There will be no results. "

This is not the first time Congress has discussed restricting lawmakers from trading stocks. Earlier this year, calls for a ban on stock trading among members of Congress were high, and lawmakers in both houses of Congress introduced bills, but to no avail.

An expert on US issues said in an interview with the Global Times on the 7th that members of the US Congress represent different interest groups, and they use their power not only to serve these interest groups, but also to serve themselves on behalf of these groups. therefore, it is conceivable that many congressmen are desperate to win re-election, and it is conceivable that they will pass laws restricting their own interests.

It is worth noting that most members of the United States Congress are millionaires. According to USA Today in 2021, the Center for responsive Politics, an NGO, estimates that most members of Congress have a net worth of more than $1 million. Senator Scott of Florida is the richest congressman with a net worth of nearly $260 million, according to the Washington-based nonprofit Open Secret website in 2020.