Half of Congress is Trading Stocks, and It’s Determining Our Laws

Fifty percent of Congress members own stock for a total of up to $746 million, according to new research from More Perfect Union.

And they’re not just getting rich off of trading stocks while in the Senate and House of Representatives. We found that members’ portfolios often determine what bills become law. 

Our findings provide a comprehensive picture of the scope of stock holdings of members of the Senate and House of Representatives. The 2020 disclosures show that: 

• 49.7 percent of voting members of Congress disclosed that they, their spouses, or their children owned stock in 2020. This includes 62 Senators and 204 Representatives.
• 50 percent of committee chairs or ranking members – representing Congressional leadership in both parties – own stocks. 
• For comparison, according to Federal Reserve data from 2019, only about 16 percent of American families are directly invested in individual stocks and bonds (more are invested indirectly via assets like retirement accounts).
• Members of Congress collectively own between $218 million and $746.4 million in corporate stock. The exact number is much more difficult to determine, given that current transparency laws, that require members of Congress to disclose their holdings, only require them to report a general range of the dollar amount they hold.
• See a spreadsheet here listing which members of Congressional leadership disclosed ownership of corporate securities in 2020.

A Tale of Two Bills: Cracking Down on Big Tech vs. Manufacturing Semiconductor Chips

To provide an example of how these conflicts can affect policymaking, we looked at the trajectories of two different bipartisan legislative proposals making their way through Congress over the past year. 

The first, the American Innovation and Choice Online Act, is part of a series of bold policy proposals to crack down on anticompetitive practices by Big Tech platforms like Google, Amazon, and Apple – all three of which oppose the bill. The bill would stop these companies from abusing control over their platforms to give special treatment to their own products and services – for example, Amazon ranking its own products above their competitors’ products on the marketplace. The Senate version of the bill, led by Senator Amy Klobuchar (D-MN), recently passed out of the Judiciary Committee in January 2022.  A House version of the bill, introduced by Rep. David Cicilline (D-RI) and supported by a bipartisan group of progressive and conservative members, was approved out of committee back in June 2021. However, the bill has yet to receive a floor vote in the House. Why has Speaker Pelosi not yet called a vote on this or other major antitrust legislation that would impact Big Tech? 

One answer may be found in the Speaker’s own personal financial interests (and those of her family): between 2007 and 2020, Speaker Pelosi and her husband made somewhere between $5 million and 30 million in returns on stock in five big tech companies: Apple, Amazon, Facebook, Google, and Microsoft. All of these companies stand to have their bottom lines impacted by stricter enforcement of monopolistic practices in the tech industry. 

Speaker Pelosi is not alone in betting big on Big Tech. Even while Democratic members slammed Facebook for its role in spreading misinformation about the 2020 election and the COVID-19 pandemic, and while vocal Republican members railed about supposed censorship of conservative views on social media platforms, Business Insider found some of those same critics among the 32 House and Senate members who owned stock in Facebook. 

Senator Ron Wyden (D-OR), Chair of the Finance Committee, owns millions in tech and media company stocks, including Apple, Facebook, and Google. While he has not yet signed on to cosponsor Senator Klobuchar’s big antitrust bills, he did manage to get a massive amendment included in a separate bill that would protect Big Tech’s interests. 

Along with Senator Crapo (R-ID), Senator Wyden attached a major provision to the United States Innovation and Competition Act, or USICA. The provision would essentially force the U.S. Trade Representative to investigate and enforce penalties against other countries that try to use their own laws to regulate tech companies on monopoly practices or data privacy. Ostensibly, this provision is targeted at stopping the Chinese government from engaging in censorship or “cheating on trade.” However, as written, the bill would helpfully apply this rule to all foreign governments, not just China, that might dare to step in and try to place some restrictions on the practices of major multinational tech corporations.

USICA, also known as the America COMPETES Act in the House, is expected to soon head to conference between the two chambers of Congress. The bill is an enormous legislative package aimed at bolstering U.S. competitiveness in technological research and development. Included in this is a provision to boost domestic manufacturing of semiconductor chips. Semiconductor chips are needed to manufacture all sorts of digital products, from smartphones to cars to medical equipment. The vast majority of the world’s supply of chips mostly comes from just a few countries, dominated by China, South Korea, and Taiwan, among others. The disruptions of the COVID-19 pandemic have led to a chip shortage, slowing down the production and supply of products that rely on them. In an attempt to address that, USICA includes a provision to shell out $52 billion in subsidies to U.S. companies to make more semiconductor chips here at home. Encouraging domestic manufacturing of critical products is a noble goal, but do enormous companies like Intel and Nvidia really need this kind of incentive?

As it turns out, many members of Congress own huge amounts of stock in these very same chipmakers and other tech companies –  like Intel, Nvdia, Texas Instruments, and Advanced Micro Devices – that would benefit from public dollars going toward chips or other tech development. At least 26 Senators – more than a quarter of the Senate – own stocks in companies that lobbied in favor of USICA and would benefit from the bill’s investments. In the House, at least 97 members, or nearly a quarter, also own stock in companies pushing for USICA provisions. It’s hardly surprising, then, that the provision funding the chip industry is poised to make its way through the House, while bills that could hurt tech’s bottom line may be stalled out.

Solutions

These conflicts of interest could span every policy area members of Congress can touch: weapons manufacturers, pharmaceutical and health care companies, the fossil fuel industry and even cryptocurrency. As long as members can trade stock and generate wealth from their trades while in office, their policymaking decisions could be impacted. Transparency and disclosure alone are clearly not enough – we need to ban the practice altogether. Clearly, Americans agree – a recent poll by Data for Progress found that 67 percent of voters support banning lawmakers from trading stock.

There’s real momentum for this. A 2020 bill led by progressives in the House and Senate would have barred members from buying or selling stocks, but it was held up by committees controlled by members who are active traders. However, Senators Jon Ossoff (D-GA) and Mark Kelly (D-AZ) introduced a new, stricter version of the bill earlier this year. And recently, even Speaker Pelosi, who has long been a roadblock to progress on this issue, reversed course just this week and stated that she’d support a plan to ban members from owning and trading stocks.

If Democrats want to take easy action to gain the trust of working class Americans, they should take the lead and ban members of Congress from owning individual corporate stocks.