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tv   Washington Journal Dave Levinthal  CSPAN  September 6, 2022 2:23pm-3:01pm EDT

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>> listening to programs on c-span through c-span radio got easier. tell your smart speaker play c-span radio and listen to washington journal daily at 7:00 a.m. eastern. and for congressional hearings and other congressional event throughout the day, every day at 5:00 p.m. and 9:00 p.m.. catch washington today of the fast-paced catchup of the day. c-span, powered by cable. >> we are here on "washington journal" with dave leventhal. he is with us to talk about members of congress in potential conflicts of interest and what may be next in terms of financial guidance for members of congress. first i want to ask you in terms
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of, what are the current roles --rules governing stuff like that? guest: it is effectively the rules of the road. this was in response to scandals and situations that had taken place in the yet years with lawmakers not necessarily doing with their personal funds but at least in the opinion of many the public's interests. it tackled three things, it addressed conflicts of interest which would be investing their personal money in a way that could directly conflict or contrast in not a greatly with the public's decisions that they are making on behalf of the body politics. another one was insider trading where lawmakers would in certain
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cases have used information by being an elected official and taking that information and having it inform personal financial decisions buying stocks or other things. and the other thing was transparency. more details and all of that more quickly so that they could, we could see what lawmakers were doing. it is adding another layer of security, if you will to the process to make sure that voters have information to act on themselves when they went to the ballot box. for example if they didn't like the idea of a member of congress who sat on say the services committee purchasing stock in raytheon or one of the defense contractors that relies on government funding to do its
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business and the government funding can increase stock prices. so they would have that information available in a relatively quick amount of time. host: let's say if a members child or wife or brother-in-law but the same sort of stock, would that be transparent to the public, to the media? guest: it addressed that too and not only the lawmaker is subject to these rules but dependent children, and spouse. if you look at the report from any member of congress, what they have to do is not only report their own personal stock trades but those of their spouses, those of their dependent children and it is sort of an extreme example of this that we see frequently right now is house speaker nancy pelosi. she does not personally trade
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stocks, but her husband who is a capitalist not only has worked trade stocks but personally trades stocks in a way that would benefit him and benefit his spouse who happens to be the speaker of the house. he trades at tens of millions of dollars in stock options every year. we know that based on the reports in silly -- nancy pelosi certifies herself. host: what about the ramifications? what is the enforcement of the stock act? guest: it's fairly strict that if you violate any of the provisions of the stock act, you consent before -- you can get sent before the committee which has the power to reprimand, center or in extreme situations kick a member out.
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also, there is potential criminal liability that could come with this too or the department of justice could investigate if they were acting in illegal ways. exchange commission could investigate and has in one notable incident involving senator richard burr. all of these things can happen simultaneously. the penalties over the past 10 years have been incredibly light. the investigations that have taken place are almost universally have led to nothing happening and some sort of concern that has been raised especially in the past many months is what good is the law if ultimately it doesn't have any teeth? lawmakers may not be compelled to do the right thing or they
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may get involved in activity that is not going to be becoming of them. host: you opened the door therefore the weaknesses. a 10-year-old law now, defined some of the other weaknesses that you think need to be addressed by congress. guest: one of the fundamental issues is the third column i just described which is the transparency aspect. if you don't know what a member is doing, you don't know how a representative is investing their personal finances. you can't tell if there is a conflict of interest. what we have found in our reporting along with other media organizations is 71 examples that we have found since last year of current members of congress who have violated the stock act disclosure provision.
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it is relatively minor, they may be a few days late of what is a 45 day deadline. any sale, purchase, exchange of stock or related financial implement. but in some cases, it has been months or even years past the deadline. congress has established for itself the rules of the road that congress created for congress. so when you have a situation like that and some situations involve hundreds of stock trades the months late and potentially millions or tens of millions of dollars in some cases. the yield entity for that which has come to bear is a $200 late filing fee. all of these cases that i just mentioned, that is basically the extent of the penalty that we found. the critics of this law who say the stock act is simply too weak
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, they're just going to keep doing it. there are no ramifications if you can go and rob a bank into the police officer is not going to chase after you, my keep rubbing thanks. -- banks. host: the organization has been relentless on reporting on this. one of the headlines 71 members of congress have violated a law designed to prevent insider trading and to stop conflicts of interest. we welcome your calls and comments. the lines are (202) 748-8000 for democrats. (202) 748-8001 the republicans and independents and others (202) 748-8002. what's next? what has been proposed to fix it? guest: back in december we published an article.
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there are stories, investigations to try to make this real. try to explain what conflicts of interest, or perceived conflicts of interest are in play. it has not engaged in the proper disclosure of their finances. we also have senior congressional staffers who are subject to the stock act and they too if they are very late or have failed to disclose their activity, we reported that as well. when that published, we asked nancy pelosi in a press conference, brian metzger he asked her what do you think of this? should members of congress be able to trade stocks? should they be able to play the market while they are on capitol hill and the answer she gave at the time and i'm paraphrasing,
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it is a free market economy. and members of congress should be able to participate in that economy. she endorsed the status quo. what happened after that was kind of a curious series of events. you had members of congress such as alexandria ocasio-cortez, the representative from new york saying well, no. that is not good and that is not what we want. we want to do something different. we need to ban members of congress from trading stocks because the current rules are not working. and you have some republicans who are essentially saying the same thing. you have the senator from missouri, later you have donald trump and kevin mccarthy saying yeah we need to consider banning members of congress from trading stocks. you would never put those
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representatives and politicians in the same conversation on the same page but nevertheless, that is where they were painting. to the question that you asked, where they stand now? what happened in the interim between december and today, there has been a series of pieces of legislation that have been introduced by democrats and republicans that have struck on that very issue. saying we need to do something different, we need to ban members from trading stock and ban their family members from trading stocks as well. throughout the margins, there have been differences in the approach. should this extend beyond congress? supreme court justice's? or other members of the government? there is a question about should i just apply to a member of congress or the family? right now we have three different avenues here. we have the senate, the house looking at it, and then sort of a coalition for rank and file
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members who are aggressively pursuing this. host: you pointed out the speakers husband trading stock. has she committed to taking up legislation when it is finalized? guest: i think she has had an evolution between december and february. december of last year and february of this year where she warmed to the idea at least in principle saying more or less, ok, you can go forward. we will consider legislation. that led to an april congressional hearing that ultimately addressed this issue in a public forum any --in a public fashion. there has been debate that has not led to black and white text for consideration on the house floor but that is were advocates hope here in september that congress is going to get to
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amending other priorities. host: you mentioned senator richard burr. explain some of the trades he made or potential conflicts of interest. he is retiring, obviously. we will play an ad here in a minute but what was the issue with senator burke? guest: this is not just applicable to him the other members of congress around the time. there were lots of trades being made, sometimes in very rapid fashion basically in january or february, march of 20. the pandemic was beginning to sink its teeth into the united states. these trades looked, if you are being generous curious. the idea is that some people were saying what's going on here?
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there may have been, or the suspicion was that members of congress were using information that they had gathered as a member of congress to either themselves make stock trades or order up stock trades that could have benefited them because of insider knowledge about the way that the economy. the way that vaccines were being developed. and when we reported after the fact, we found dozens of examples of members of congress who in the house and the senate democrats and republicans who were purchasing around that time stocks in companies that might not have been typical for them to purchase. pfizer, moderna, johnson & johnson, makers of vaccines. makers of cleaning products. makers of self -- shelf stable foods. ultimately the stock purchases or the trades that were being made were such that there were
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questions being asked about whether these were just trades being made in the normal course of one making a financial trade or if in essence they knew something about what was going on or decisions in that were going to be made that could have been beneficial. host: the transactions of members is not a national stock issue but a national campaign issue. back to north carolina it is on the minds of many. she is a democrat in north carolina here is that. [video clip] >> i have never worked in washington but there is a lot going on there that makes no sense. at this, 64 members of congress, republicans and democrats have broken able to stop insider stock trading yet washington refuses to do anything about it.
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i'm sherry beasley and i say let's ban members of congress from trading stocks altogether. senators should be working for you not themselves. that's why i approve this message. host: an issue in north carolina. are you surprised it's not a bigger issue nationally? guest: there have been a few other campaigns for this comes up. the economy, the pain that people are feeling at the pump, other issues that are part of any campaign but essentially in 2022 midterms. ads are going up about this issue, other members of congress are running on it. abigail spanberger is in a close race. she is very much a vanguard of pushing a stock and -- band. other times you can weaponize this as a politician, to the
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political party. the republican congressional wing of the republican party, the national republican committees have been very aggressive against democratic members of such as representatives in new jersey running for reelection. very tight race that he could quite essentially lose. we reported he had dozens of stock trades that he had simply failed to disclose back in 2000 and 2020. they had become a campaign issue. still nevertheless, it is one that is coming up in the 2022 midterm unlike we have seen in previous years. host: potential conflicts of interest, (202) 748-8000 is the democrat mine. (202) 748-8001 is for republicans and for independents and others (202) 748-8002.
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let's go to the democrat line first. caller: i. -- hi. an understanding is members of congress had the same rules as anybody else, basically, some kind of blind trust. mi wrong? host: trust which is alien interest -- an interest in this. any member of congress has the ability to combine -- make a blind trust. it is the ability to create a qualified blind trust. you effectively give over to an independent third-party your financial dealings.
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it is something that took -- the documents are made public. it is somewhat time-consuming. it can be quite expensive. perhaps not surprisingly there are very limited members of congress including we just mentioned the one from new jersey. he went this route after he ran into some trouble and others who have gone ahead and taken the step. but the vast majority of members of congress don't. so the question of do members of congress have to play by a different set of roles than the average american? they do. the stock act is a different set of rules that members of congress are subject to. i should note there are federal laws for candidates who have to record every financial
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transaction disclosure. as we reported as well, they have been very good about disclosing in the application there really is no penalty to bear as well. host: pike on -- why constant reference to nancy pelosi. has speaker pelosi violated any law? guest: she is the speaker of the house with great power comes extra scrutiny. her husband is trading in a way that most members of congress or their spouses don't. when you are dealing with hundreds of thousands of dollars or in the case of paul pelosi tens of millions of dollars in a short. of time as a reporter, as a journalist we are going to absolutely scrutinize those trades to understand what they are and whether they are in conflict with decisions that nancy pelosi would herself be
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making and one example was when there was an act a couple months ago. electronics, conductors he made trades involving video. ultimately decided to sell the purchase that he made very quickly after making that purchase. it was in response to some controversy that came to bear as a result of the activity on capitol hill whether it was intentional or not coming into play at the same time when he was making stock trades. host: what constitutes a conflict of interest? guest: credibly attune to what the rules are. they follow them very closely. we are focusing on those who have broken the rules or don't seem to understand rules. in all fairness to the members of congress who do play by the rules, some are diligent about
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it. i have talked to many of them and they say this is a priority for me. it is a priority for this office, we are going to play by the rules into it by the. and they do so there is a problem with that. others seem to not really know that it is something that applies to them. they don't know what they need to disclose and when. this kind of came up when the house at the -- ethics committee let three members and ultimately for off the hook who had violated the stock act disclosure provisions. one was a republican from texas one was a democrat from new york. a democrat from new york or a republican from new york and all three of them even though you can demonstrate that they had broken the rules and you can
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read the rules and compare it to their actions, and they violated it. the ethics committee says this was not a knowing and double violation. this was just a mistake. we are going to give them the benefit of the doubt here and beyond pain just that standard $200 late filing fee there were no other ramifications. they were given basically the free and clear to go on with their business without having any type of reprimand or additional penalty beyond what they already had. host: why are not all stockholders of congress made public? so the public be made aware of all conflicts of interest for what is the public through in this area? guest: that really strikes to the heart of the disclosure aspect.
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the provision provides an answer to the reader or the caller's question. if you trade in stock or cryptocurrency or make any kind of real estate trades or different types of financial trades that are subject to the stock act do you make any of those with the member of congress? you do have to disclose them in a certain schedule time which depends on the type of trade. we won't go into that too much there but the bottom line is that they do have to do those. the problem because or the problem arises when they don't do it. they don't follow the rules. instead of disclosing that, they forget or they fail to or for one reason or another that information just doesn't come
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available to the public and that becomes a problem because you can't judge a member on whether they do have a real or perceived conflict of interest if you don't have the information to make the judgment. host: phone lines are (202) 748-8000 democrats. (202) 748-8001 for republicans and fors -- for independents and others. (202) 748-8002. caller: good morning, when the subject comes up, i get baffled because i vote for the federal government and annually, annually we were notified. all of the auditors were notified that it was time to take their independence training meeting we held stock for. every year, they were notified
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they had independence training and we had to have an independence statement. if is every year. so i don't understand how congressman could just overlook the fact about the disclosures. you know, it just baffles my mind. but given that as a taxpayer i'm concerned based on portfolios not with the american people need. i think this whole system has to be overhauled and all these people have been there forever doing the same thing year after year after year, it is a lot -- it is time for a lot of those to move on, bring people who have fresher ideas and what it is you're supposed to.
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guest: some cases are more strict. that is one point to make. congress, they make the laws. if they wanted to change any aspect of this, if they wanted to make it more strict for any aspect of the government, they do have the ability to do that. that is what is being debated right now with the various bills and the various committees and coalitions that are getting together to discuss whether to do exactly that at the end of this current congressional session in january. it remains to be seen whether something monumental will happen, nothing will happen or something in between. frankly, based on many conversations we have been having with congress and the staff it seems this is where it is going to land. host: wordy they get most of the information on these trades? guest: we look at the reports
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that come in and quite literally every day about financial transactions. there are annual reports they have to file that give a whole variety of information covering a calendar year. those usually come out midyear. for individual stock trades, members of congress have to take an added step. they file periodic transaction reports. it is details about individual stock trades or crypto trades or other types of trades of that sort. the idea there for having those sort of interim reports is that, hey, if a member of congress is dealing with a bill, a piece of legislation that it could have some bearing on the financial interests, the public should have a right to nap that information. not next year but relatively close to real time.
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members of congress would love to ban members of congress from trading stocks and safe at minimum that should be almost instant disclosure and we shouldn't have to wait 45 days. it should be five days or one day because we have this thing called the internet. we have digital communication and have the capability to do it. some of the most diligent members of congress, the day they make a trade if they do trade stock, they will reported literally the same day. so we know that is possible. host: to eastern kentucky, robert is on the republican line. go ahead. caller: is insider trading against the law according to this fellow that is trading -- talking? where are the legislators about the law if that is the law? host: it was seen the penalties described under the stock act or maybe less than insider-trading
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for those outside of congress. guest: insider-trading is against the law. it is against the law for members of congress. the act is explicit and if you engage in insider trading as a member of congress the penalty is, again theoretically, their lease affair -- severe. how do you prove they are engaged in insider-trading? the burden of proof is incredibly high and members of congress, richard burr said these curiously climbing stock trades are not insider-trading that was just coincidence. or i had nothing to do with the personally. my stockbroker was making those traits and i don't have any communication with him. that is difficult to prove, the level of communication or direction that any member of congress have with their financial advisors or their
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stockbrokers unless you have the blind trust that we have earlier -- that we talked about earlier where you are signing away your personal finances to a third party and doing it in a public fashion where everything is written kind of for how rules of the road are going to apply to your finances. you are kind of taking the congress members work for it that they are doing the right thing. there is a trust prepared by the aspect. host: what is the most recent instance where the department of justice has looked into possible insider-trading? guest: they may have looked into it in the richard burr case. what we do know is they have never had an investigation come to the point were a member of congress is in charge under the stock act. there have been other financial related activities where a
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member of congress has gotten into trouble but that wasn't necessarily related at all to the stock act. 10 years on right now there is no prosecutions and convictions under the stock act. host: let's hear from nick in maryland. caller: it's a conflict of interest question and it is not necessarily to start trading it is more or less to builders. i have an opinion that if you take government assistance, you should give up your right to vote. if that rate there is a conflict of interest. you are getting money from the government then you should not be able to vote for you getting more money from the government. guest: i don't see how that would necessarily work. voting is a right given to people qualified to vote. many people on government
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assistance would find that difficult in essence that we all benefit in some way from government actions. under those rules, yeah, i think i understand what the caller said. host: the president election back to you wrote about in the insider $424 million in taxpayer money is locked away so lawmakers won't spend or return it. you check the box on your tax return what is going on there? guest: that is probably the only thing people remember is the checkbox you have on your tax return it's to give three dollars to this fund. you may have done it out of habit or not have done it at all but what that is supposed to do and what it does do still is fund this presidential matching fund and the presidential
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candidates for many years during the 1990's in the early 2000's would use this money that had been set -- sent by taxpayers into this fund and they will use it to run their campaigns with the idea that the federal government would provide this money so the presidential candidates wouldn't have to worry about fundraising as much as they would otherwise. they would have to raise a certain amount of money to get those magic funds. but they would get this big pile of money and then they can go and run their campaigns. george w. bush took this money, just as carrie took this money, john mccain 2008 take this money. but president obama did not take that money because 2008 when he was running against john mccain, he thought he could raise more money in a way that would allow him to stand a better chance of winning the presidency. i should know, presidential
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candidates holding them to limits and ultimately -- host: did that set the trend for them not to take money and that's why this fund is piling up? guest: it basically killed the fund. no major party candidate from after the 2008 race has failed himself to this opportunity to get money. so what has happened between 2008 and present-day, the fund continues to grow and grow. congress which has the ability to decide do we want to look -- repurpose this money? it depends on so many things. we have talked to numerous different interests including taxpayer advocates who say if you are not going to use it for anything refund the taxpayers.
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a lot of people could use this money it would be incredible the government to handed to charity which they could do. they can return it to the general fund to pay down for example government debt or repurpose it for a very targeted purpose in another government program. the pot of money continues to host: grow. let's hear from jay in new hampshire. caller: in morning, everybody. i think great concern the stock trading and insider information obviously a real problem but the big prize is clearly the regulatory capture of the agencies. the fda granting liability free
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protection for these horrific clashes. that is where the most damage is being done. how this impacts the faa something were vacation safety is being compromised by making pilots take experimental shots is a real concern. turning back to a previous segment on the court we don't have the rule of law in this country. we have the rule of power and those are my comments. also, be nice to hear a few more calls coming in and i really appreciate c-span. host: and speak to some of the things that the caller said that we haven't done direct reporting on them. definitely there are questions about funding all over the government how congress should use the money that it has the ability to


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