Michigan Congressman Dan Kildee, D-Flint, is co-sponsoring a bill that would ban members of Congress from trading stocks. The bill was re-introduced in January after receiving scrutiny from both parties and is still awaiting a hearing.
Rick Brewer recently spoke with Kildee about the feasibility of this bill becoming a reality.
This transcript has been lightly edited for clarity.
Rick Brewer: I want to simply start off this conversation with how do you think the Trust in Congress Act would change Congress?
Rep. Dan Kildee: I hope it would change Congress somewhat in that it would eliminate the possibility of members of Congress being involved in conflicts when it comes to their own personal finances. It's rare, but it can happen. And we have cases that are well known where members of Congress have traded on inside information. And in some cases, faced criminal penalty. So, that would change. But I think the more important change would be to give some assurance to the public that members of Congress are not in a position to influence their own personal wealth by using the information that comes into our hands because of our positions in order to affect policies that would benefit them.
RB: So, I want to dig into that a little bit deeper Congressman, so explain to me how this isn't about appearances of cracking down on these members of Congress, but maybe explain to your constituents why people should believe this bill will provide meaningful change?
DK: Well, because it would, it would essentially say that you can't own, or trade, you can own, but you have to put in a blind trust and can't actively trade individual stocks. And so it would be a fundamental change in the requirements. The financial requirements that members of Congress work under. So it's, you know, the optics, I think, as I mentioned, it's important that people know that that's the case. But fundamentally, it would just change the way things work for us. And I think for the better. It would mean that a member of Congress can't actively trade in individual stocks. That's a pretty big deal. And so while on one hand, one could argue that it's just simply a matter of creating a more positive perception. The perception is based on the reality. The reality is, no member of Congress would be trading individual stocks. If they own stocks, which I don't, but if they did, they'd have to put them in a blind trust.
RB: And I just want to add for the audience, I did check Congressman Kildee's financial disclosures, what he is saying is indeed true, he does not own any personal stocks. I also want to talk about, Congressman, in the bill, it talks about how members of Congress won't be allowed to place any investments into a qualified blind trust. To the average person who doesn't know what that means, explain that to them. The qualified blind trust.
DK: It's not just saying that you're putting in a trust or putting in the hands of somebody with whom you have control, but a blind trust that meets the standard for the arm's length between the person who places assets in the trust, and the trustee who makes the decisions about investments. So like, for example, you know, we've heard people say, well, I'm just going to transfer ownership of these assets, to, you know, my partner, my brother in law, my wife, that is not a qualified blind trust, it's a it's a threshold. It's a term of art in the law, that would require that firewall between the individual who owns the assets and the trustee who makes the investment decisions regarding those assets.
RB: I want to talk about the feasibility of this bill. I want to talk about former Speaker of the House, Nancy Pelosi who said in December of 2020. She doesn't think stock trading should be illegal. And she said, "we're a free market economy, they should be able to participate." Based on that type of opposition, Congressman, even within your own party from leadership, what is the feasibility of this becoming a reality?
DK: Yeah, it's a good question. And I think, actually, Speaker emerita Pelosi I think has even modified some of her positions on this, since it's become more of a public conversation. But I can't speak for her. I do think public sentiment is everything. I mean, I'm quoting Abraham Lincoln, when I say that, with it, you can accomplish almost anything without it practically nothing. 76% of Americans support legislation that would prevent members of Congress and their spouses from trading stocks while in office, in so, you know, the reason that we talk about this, the reason we raise the issue is that so the public is aware that there's an initiative in Congress to get this done. There's nothing as effective as the voice of our constituents when it comes to shaping the views that we have. And so it's not easy, you know, because there is pushback from members Congress themselves who are in a position to make the decision. But the only way it happens is if we keep talking about it and not let this issue just sort of come and go. And that's why this conversation is important.
RB: So, I want to talk about the Stock Act, which for people who don't know, it does give penalties to members of Congress who don't necessarily report them. There have been violations of this in the past, would a maybe more immediate solution, Congressman, or maybe you can elaborate or tell me if there's been any discussion about possible reform to the Stock Act, maybe making those penalties even more strict. So that transparency is an absolute, if that makes sense. Because there were reports, I believe back in 2022 of 72 members, roughly, this is October of 2022. 72 members, not reporting certain stocks being traded.
DK: Yeah, no, it's a good question. And I just came to the conclusion that, you know, the Stock Act is an important frame for all of this. But the way I would consider reforming the Stock Act, is with the Trust in Congress Act itself. In other words, not just simply marginally affecting the penalty for bad actors, you know, who maybe would continue to find ways to not comply, and not report because it takes somebody discovering a violation under the Stock Act in order to initiate an enforcement action. You know, if somebody doesn't file, if it weren't, for example, for the reporting that was done by the New York Times, I don't know, a year or so ago, a lot of this wouldn't even come out in terms of the number of members that, you know, may have failed to timely report transactions. The real reform of the Stock Act is pass the Trust in Congress Act. We're not saying that members of Congress can't own stock. I don't but we're not saying that members can't own stock. All we're saying is that if you do, you've got to put it in a blind trust. And you've got to certify that the resources that you have that are subject to the stock, or I'm sorry, to the Trust in Congress Act, are in a blind trust. But that wouldn't apply to mutual funds. It wouldn't apply to a treasury bill, or other sorts of bonds. We're really talking about equities, we're talking about stocks, in companies whose value fluctuates greatly on information and information known to members of Congress in decisions made by members of Congress. So it's not as pervasive as some would paint it. You know, most Americans who do have assets in the market, have it in a mutual fund, like I do, like a 401 program. That's the way most people do it. In that case, that would not be affected by this. What we're talking about is the most egregious behavior, which is buying and selling of individual stocks, which really raises the question of the integrity of our system.
RB: My next question actually segues nicely into what you just said there the integrity of the system. Do you think an issue like this is why so many people mistrust our government?
DK: I think it contributes to it. Anything that calls into question whether or not a member of Congress is really thinking about the interests of their constituents, or their own interests, contributes to this lack of trust that is so pervasive. And so, you know, I don't think this would solve the problem by itself. But it would be a tangible way to address it, number one. But I also think, public opinion being important, with or without public opinion, and, you know, the integrity or trust in Congress. I still think we should do this no matter what, even if people thought very highly, and didn't have a suspicion that certain members of Congress might be, you know, utilizing insider information or making decisions that affects their own fortune. I still think it's just better policy. You know, this is just not a good way to run an organization when the decisions you make could affect your own personal wealth. When you're taking no risks. The members of Congress are public servants. It's a unique opportunity to serve in this role. I don't think it's defensible for them to say, hey, wait a minute, you know, nobody else has to do this. Why do I have to? There's a real simple answer. You're a member of Congress. You have a unique responsibility to have standards applied to you that don't necessarily apply to everybody up and down the street. You are in a unique role. It's an important role, and it's one that you ought to take seriously.
RB: Congressman Dan, Kildee, thank you so much for your time today, sir, I really appreciate it.
DK: Thank you so much. Good to see you.
