tv Washington Journal Dave Levinthal CSPAN September 6, 2022 6:21pm-7:06pm EDT
>> this evening, former secretary of state mike pompeo and others discussed the peace accords. the richard mitnick's and foundation is the host for this versatile event, you can watch it live at 8:00 on c-span now, our free mobile video app. >> there are a lot of places to get political information. but only at c-span do you get it straight from the source. no matter where you are from or where you stand on the issues, c-span is america's network. unfiltered, unbiased, word for word if it happens here, or here, or here, or anywhere that matters, america is watching on c-span powered by cable >> we are joined on washington journal by dave leventhal, he is here with us to talk with us about
members of congress and potential conflicts of interest in what could be next for members of congress, i want to ask you today what are some of the important rules for -- like that? >> it is effectively the rules of the road that -- pass for congress and decade ago. this was in response to span rules that had taken place in the medium rules before not nested -- in the immediate -- the stock act tackled three times, it tackled concepts of interest where investors would be -- public decisions that they
are making on behalf of the body politic. another one whence insider trading where lawmakers would in some cases have used information that they had gleaned by virtue of being a member of congress i being an elective -- an elected official and then -- though the third prong of that was transparency giving the public more knowledge, and more details more quickly so that we could see what lawmakers were doing. it was effectively adding another layer of security to the process so that voters had the information to act themselves when they went to the ballot box. and they didn't like the idea of
a member of congress who sat on a stocks -- who sat on the board of one of the defense contractors that relies on government funding to do its business. but they would have that information available in a relatively quick amount of time. >> would they have that information if his wife or brother-in-law lot the same stock? would that be transparent to the media? >> not only is the lawmaker subject to these rules but the lawmaker's spouse is subject to these rules. the lawmaker's children is subject to this world -- to this rule. what they have to do is not only report their personal stock trade but those of their stock
-- their spouses and in dependent children. -- independent children. house speaker nancy pelosi does not personally trade stocks, but her's -- her husband who is a venture capitalist not only trades stocks in a professional sense but also personally. he trades tens of millions of dollars every year. we know that based on the reports that nancy pelosi herself certifies and signs. this applies to every single member of congress. >> what's the enforcement of that stock act? >> in theory, the enforcement is fairly strict. if you violate any of the provisions of the stock act, number one you could be put before the house or the senate ethics committee which has the
power to reprimand, -- or even in extreme situations kick out a member of congress himself. also there is potential criminal liability that could come with this or the department of justice could investigate a member if they were deemed to be acting in a criminally illegal sort of way. especially if the sec could investigate and has in one notable incident involving senator burr who is still there and all of these things can happen simultaneously but the rub here is that the penalties have been incredibly light. the investigations that have taken place have been almost universally -- have almost universally led to almost nothing happening. and there is concern that has been raised especially in the
past few months, what good is this law if it doesn't have any teeth. if it's all carrots and no stick, then lawmakers not be compelled to do the right thing or they might be involved in an activity that is not the coming of them. >> you pointed out the weaknesses in the stock act, a 10-year-old law now. detail some of the weaknesses that you believe should be addressed by congress. >> one is that third prong that i described which is the transparency aspect. that is a foundational element, if you don't know what a member is doing you don't know what representative so-and-so over here or there is investing their personal finances. you can't tell if there is conflict of interest. what we have found in our reporting along with other media organizations is that 71
examples that we have found since last year of current members of congress who have violated the stock act -- the fine is relatively minor. it may be a few days passed a 45 day deadline for disclosing any purchase, any exchange of stock or any related financial implement. but in some cases, it's been months or even years that have passed the deadline that congress has established for itself. the rules of the ruled -- the rules of the road that congress created for themselves. when it involves hundreds of stocks trades being months late and perhaps being tens of millions of dollars unreported. and the only penalty for that which has come to bear is a $200 late filing fee? which in all of these cases that
i've mentioned, that is basically the extent of the penalty that we found. and the critics of this law that say the stock act is too weak and toothless, they are just going to keep doing it. there is no ramifications. a police officer isn't going to chase after you if you rob a bank you might keep robbing of bank. it's an imperfect parallel but you can see where it's going. >> the deputy bureau chief of insider says, this is as dave mentioned, the headline of one of their recent pieces. 71 members of congress have violated a law designed to prevent insider trading. we welcome your calls and comments. . independents and others to 027
48 8002. >> it initially involved more than 200 -- two dozen different articles and stories to make this real to people to explain to them exactly what conflicts of interest or perceived conflict of interest were in place and also revealing that many members of congress had had engaged in the activity that we had just described. we also brought it to senior level congressional staffers and they too had been very late or had failed to disclose their activity. we asked nancy pelosi ada press conference. he asked her, brian mentzer
asked her, should they be able to play stock, should they be able to trade in capitol hill? an answer she gave at that time was this is a free market economy and members of congress should be able to participate in that economy. she endorsed the status quo. and then a curious confluence of events happened. you had on the left, members such as alexandria ocasio-cortez the senator from new york, and the senator from massachusetts saying, no, that's not good. that's not what we want. we want something different. we want to be on embers of congress from trading stocks because the rules of the road are not working. and then you have some republicans who were effectively saying the same thing, josh hawley, the senator from missouri.
later you had donald trump and kevin mccarthy more or less saying we do need to consider banning members of congress to -- consider banning members of congress from trading stocks. nevertheless, they were on the same page. and that's where they were landing, where did they stand now? what happened in the interim between december and today. there has been a series of legislation that has been introduced in congress by democrats and republicans that has struck on that very issue saying that we need to do something different, we need to band -- band members from trading stocks, and we need to band their family members from trading stocks as well. there have been differences in the approach. there have been questions as to if that should extend beyond congress. two supreme court justices or other members of the government. or if it should just apply to
member of congress or one's family. right now, we kind of have three different avenues. we have the senate looking at this, the house looking at this at the leadership level and then also a coalition of incan file members who are also aggressively pursuing this. >> the speaker, as you pointed out, her husband has made serious stock trades. has she committed to taking up legislation? will the house take that up? ask i think it's fair to say that she has had an evolution in her possession between december of last year in february of this year. where she warmed to the idea at least in principle saying more or less, you can go forward and we will consider legislation. that led to an april congressional hearing that ultimately address this issue in a public forum in a public fashion, and then many months of debate that have not yet led to
actual black-and-white text that is ready for consideration on the house floor -- but that's were advocates of that hope that it is where congress will get amid other priorities that congress is working on. 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? 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 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. 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 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. 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. 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 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 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 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 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. 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 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 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. 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 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. 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 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 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 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 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 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 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. 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 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 find ways to fund other aspects of government. coming this month, there is another. where congress is going to have to fund the government in order to keep it open. host: on the issue of the courts the stock out has it been tested in court? guest: has not been tested in court as far as deeming it unconstitutional. this has remained law for 10 years. there do not seem to be any efforts on the horizon to undermine this law. really, the issue is not trying to knock it down in a court but the real action is on capitol hill trying to expand this law in a way that would make it illegal for members of congress
to trade because even some members of congress themselves say it's just not working. members of congress are not abiding by the relatively modest rules we put in place. we need to strengthen them. host: let's hear from the caller in rhinelander. caller: i just wanted to point out i have been looking at this for quite a few years the student loan industry and the colleges, the most notable for-profit universities they have been inflating the judiciary committee with money for years and it's not just one thing it is also their campaigns and so forth. the others they have family members that run the packs and it is just flooded by the student loan industry and
others. i sent a payback for them it's been great. these student loans have been weaponized. they have been stripped of bankruptcy protections. stagen of limitations. they have been turned into licenses to steal. in other quick point is probably half of congress, when they get out of office, they end up teaching at a college. so you have to kind of look at, you know, over the horizon what plans they have. and it is just a big mess. i'm not sure what the answer is but i appreciate your thoughts. guest: the revolving door issue on that. we are talking and focusing on the personal finances so much here today about lawmakers but there is the issue of campaign finance. how they get the money they need
to run their campaigns and often times the money will come from corporate packs that will come from the executives a very large companies who help fund campaigns, help fund raise for a particular candidate. it is all perfectly legal. democrats, republicans engaging in the system. you have many calling to perform the system and you have other court decisions that allowed over the years and influx in money coming from corporate sources, nonprofit sources, they are intermingling with those hard many sources coming from other packs and individuals. does that relate directly to the personal finance the lawmakers? a b maybe not. but it definitely's under the very broad heading of financial issues when it comes to campaigns and the personal finances of lawmakers are
concerning to a lot of people. they feel the rules that are in place for both of them are not necessarily the best they can see for the public's interest when it comes to make sure congress is doing the right thing. host: one more quick question does this stock act -- federal reserve action. does it provide income security of specific guest: companies? that led to scandals in that area as well. yes, there are rules that are very much in place for that aspect of government. really every aspect of the federal government. talk about state governments, those are all over the map. really it depends on where you are in government and it also depends on the level of government as what the rules are.
the potential for shenanigans, if you will is ultimately a free-for-all. host: you can get a business insider.com. 71 members of congress have violated a law to prevent insider trader -- trading. announcer: former trump deputy national and heritage foundation senior fellow victoria coates talks about president biden's foreign policy record.
watch washington journal live at 7:00 eastern wednesday morning on c-span, or c-span now, our free mobile app. join the discussion with your phone calls, facebook comments, text messages and tweets. announcer: this evening, former secretary of state mike pompeo and others discuss the abraham accords, a peace agreement normalizing israeli relations with the uae and bahrain. the richard nixon foundation is the host of this virtual event. you can watch it live at 8:00 p.m. eastern on c-span now. announcer: britton's new prime minister halter first session time on domestic and foreign issues brought up by members of the house of commons. if coverage begins wednesday at 7:00 a.m. eastern on c-span 2. announcer: commerce secretary gina raimondo announced strategy