In May 2007, a bill entitled the Stop Trading on Congressional Knowledge Act, or STOCK Act, was introduced that would hold congressional and federal employees liable for stock trades they made using information they gained through their jobs, and would regulate analysts or political intelligence firms that research government activities. The bill was finally enacted in 2012.
Under the STOCK Act, members of Congress are prohibited from using information not available to the public for private profit.
It amended securities law to say that all senators and representatives owe a duty of trust and confidence to the nation with respect to material, nonpublic information they obtain in the course of their official duties. That expanded on existing ethics rules that forbid members of Congress to use information they gain as part of their official duties to make a private profit.
A Texas Republican praised the legislation saying, "The American people deserve to know that no one in any branch of government can profit from their office."
One person brought into the spotlight because of the STOCK Act was former Georgia Senator Kelly Loeffler. She was caught in a highly suspicious stock trade when she sold off $20 million in stock after a classified COVID-19 briefing on January 24, 2020. She was thus able to preserve her profits before the market crashed in March – all while misleading the public that the COVID-19 was a hoax.
Democratic House Rep. Alexandria Ocasio-Cortez has introduced legislation to further address this unethical behavior: the Ban Conflicted Trading Act, a bill that would bar members of Congress and congressional staff from buying or selling individual stocks.
Since members of Congress and their staff have access to information that can impact stock prices beyond what is available to the average American, I think we all can agree that any elected official, no matter their party, should be banned from buying or selling individual stocks.
Members of Congress are elected to represent the interests of the people, not the amount of money in their brokerage accounts.
Congress’ first obligation is to the American people. Acting on nonpublic information to cash out before crashes — and invest in stocks of companies well before anyone in the general public would have thought to — just because of privileged status as a Member of Congress is corruption, plain and simple.
This past week, we learned that Kentucky Senator Rand Paul did not report his wife’s February 2020 stock purchases of Gilead, whose antiviral drug was the first to receive emergency use authorization as a potential COVID-19 treatment from the Food and Drug Administration in May 2020.
Weeks before the public knew how bad the pandemic would be, Kelly Paul bought stock in Gilead, which makes a remdesivir, an antiviral originally developed to treat hepatitis C that was also tested for use against infectious diseases.
Just days after they bought Gilead, Rand Paul cast the only vote in the Senate against an emergency spending bill to combat the emerging outbreak.
As a U.S. Senator, Rand Paul had access to secret intelligence briefings about the massive threat that COVID-19 posed to the United States. We deserve to know what he knew about that and when he knew it.
This is a story with two parts. First, Rand Paul is a member of the Senate committee that oversees health policy, which received a coronavirus briefing from Trump administration officials in early 2020. Though his spokesperson claims Paul did not attend any COVID-related briefings, it was a month later when his wife bought stock in Gilead.
Second, there's the lengthy delay: Paul was required to disclose the transaction within 45 days. It instead came 16 months later (or 486 days late).
“The stock purchase and extremely late filing raise questions about whether Paul and his family used information given to lawmakers about the coronavirus and the government's plans to fight it so they could make a profit,” said Prof. James D. Cox of Duke University. "The senator ought to have a [very good] explanation for the trade, and why it took him almost a year and a half to discover it from his wife," he said.
Senator Paul has become the “Town Cryer” for the belief that personal freedom trumps community safety. Does he now also believe that personal freedom means he is above the law, including such things as ethics?
It's time for the Senator to use his personal freedom by freely addressing both the purchase and the delay, and the apparent ethical violations he and his wife committed. It's time for him to freely tell the truth.