WASHINGTON, DC—Today, the front page of this morning’s Wall Street Journal featured an investigative article revealing that thousands of senior executive branch employees owned stocks in companies directly affected by those agencies’ actions. The findings implicate senior federal officials at notorious agencies including EPA, Treasury, IRS, and HHS.
Among the Journal’s findings:
• More than five dozen officials at five agencies, including the Federal Trade Commission and the Justice Department, reported trading stock in companies shortly before their departments announced enforcement actions, such as charges and settlements, against those companies.
• While the government was ramping up scrutiny of big technology companies, more than 1,800 federal officials reported owning or trading at least one of four major tech stocks: Meta Platforms Inc.’s Facebook, Alphabet Inc.’s Google, Apple Inc. and Amazon.com Inc.
• More than 200 senior EPA officials, nearly one in three, reported investments in companies that were lobbying the agency. EPA employees and their family members collectively owned between $400,000 and nearly $2 million in shares of oil and gas companies on average each year between 2016 and 2021.
• When financial holdings caused a conflict, the agencies sometimes simply waived the rules. In most instances identified by the Journal, ethics officials certified that the employees had complied with the rules, which have several exemptions that allow officials to hold stock that conflicts with their agency’s work.
Congressman Michael Cloud has introduced a bill that would directly address this issue. He recently introduced the Dismantling Investments in Violation of Ethical Standards through Trusts Act, also known as the DIVEST Act.
This bipartisan legislation would prohibit senior executive branch employees from actively trading individual company stocks, requiring them to either divest these assets or place in a blind trust.
There has been a great deal of bipartisan energy around restricting conflicted trades among elected Members of Congress, but Congressman Michael Cloud’s bill is the only one that covers senior federal civil servants.
While Members of Congress are subject to constant public scrutiny, high-level employees in federal agencies are simply not. As the Journal notes, “Federal agency officials, many of them unknown to the public, wield ‘immense power and influence over things that impact the day-to-day lives of everyday Americans.’”
“A great disservice is done to our nation when public servants are able to profit off access to sensitive information while working on behalf of the American people,” Congressman Cloud said. “We must ensure government officials are serving Americans, not their own stock portfolio. To begin to rebuild Americans’ trust in their government, Congress should pass laws to ban individual stock trading for themselves and senior executive branch employees.”