Democratic Sen. Sheldon Whitehouse violated a conflict-of-interest law with 2 late stock purchase disclosures
- The senator from Rhode Island bought stock in late January but didn't report it until mid-March, a couple days late.
Congressis debating whether to ban federal lawmakers from trading stocksat all.
Democratic Sen. Sheldon Whitehouse of Rhode Island has violated a conflicts-of-interest law by disclosing two personal stock purchases past a federal deadline, according to financial records reviewed by Insider.
Whitehouse's office acknowledged that the senator disclosed his trades on March 16 — after a federally mandated 45-day filing deadline.
"The filing came two days late due to a staff transition in the office," Whitehouse spokesman Rich Davidson told Insider.
Whitehouse, in his third term, is a member of the
Lawmakers who are late disclosing their stock trades — dozens have been tardy in recent months — face a $200 fine for an initial offense.
But Whitehouse won't pay a penalty because the US Senate Select Committee on Ethics, which administers financial disclosure fines, allows violators a fine-free "grace period" so long as they disclose their stock trades no more than 30-days late. The committee may also choose to waive even later disclosures, although it's unclear how often they do this because the committee does not report this information publicly.
Other members of the US Senate that Insider and other news organizations have found in violation of the Stop Trading on Congressional Knowledge Act's disclosure requirements include Democrat Dianne Feinstein of California, Republican Tommy Tuberville of Alabama, Republican Roger Marshall of Kansas, Republican Rand Paul of Kentucky, Democrat Mark Kelly of Arizona, and Republican Cynthia Lummis of Wyoming.
"First and foremost, it is critical for lawmakers to comply with these reporting deadlines because it is the law," said Dylan Hedtler-Gaudette, government affairs manager for nonpartisan watchdog group Project on Government Oversight. "In other words, by not fully complying, they are breaking the law. And this is, to put it mildly, not a good look."
Movement to ban congressional stock trading
Whitehouse's late disclosures come at a time when Congress is debating whether to ban federal lawmakers, and potentially their immediate family members, from trading individual stocks.
A Committee on House Administration hearing on the matter — delayed because Chairperson Zoe Lofgren contracted COVID-19 — is imminent, and dozens of lawmakers have sponsored or co-sponsored any of several similar stock-ban bills.
Lawmakers' interest in pursuing stock trading reforms deepened after Insider's "Conflicted Congress" project in December found that dozens of lawmakers, and at least 182 senior congressional staffers, had failed to comply with the reporting requirements of the STOCK Act.
At least 18 members of Congress — Whitehouse among them — have investments in at least one of two defense contractors, Lockheed Martin and Raytheon, who manufacture missiles Western nations are shipping to Ukraine's military.
Whitehouse "supports a ban and is working with proponents of multiple bills to reach a unified caucus position," Davidson said, adding that the senator does not personally trade stocks, but has a financial account manager do so on his behalf without the senator's consultation.
"I don't decide on, neither am I even informed of, trades that are made in my account," Whitehouse told Politico in 2017.
Whitehouse has not, however, created what's known as a "qualified blind trust" — a formal, publicly disclosed arrangement, requiring congressional approval, in which a lawmaker officially transfers management of their financial assets to an independent trustee. Senate guidance says these trusts provide the "most comprehensive approach" to avoiding "potential conflicts of interest or the appearance of such conflicts," although they can be expensive and time-consuming to establish.
No matter who does the stock trading, members of Congress are personally responsible for publicly disclosing their stock trades on time. All members of Congress also undergo ethics training about federal reporting requirements.
"By continually giving the finger to reporting requirements related to their stock transactions, members are telling the public — their constituents — that they don't care about what the public thinks," Hedtler-Gaudette said. "That is both deeply cynical and deeply troubling since members of Congress are, at the end of the day, public servants."
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