- No public records exist that track who has violated the STOCK Act or receives a fine.
- Dozens of members and at least 182 staffers have been tardy, but there's no consistent penalty system.
- Former staffers say there is a lack of enforcement against those who violate the STOCK Act.
Congress has a spotty and inconsistent method for collecting fines from members and top staffers who break a federal law designed to stop insider trading and conflicts of interest, an Insider investigation found.
Insider's investigation of financial disclosures found that 49 members of Congress and at least 182 of the highest-paid Capitol Hill staffers were late in filing their stock trades during 2020 and 2021.
Lawmakers and senior congressional staffers who blow past the deadlines established by the 2012 Stop Trading on Congressional Knowledge Act are supposed to pay a late fee of $200 the first time. Increasingly higher fines follow if they continue to be late — potentially costing tens of thousands of dollars in extreme cases.
But accountability and transparency are decidedly lacking.
No public records exist indicating whether these officials ever paid the fines. Congressional ethics staff wouldn't confirm the existence of nonpublic ledgers tracking how many officials paid fines for violating the STOCK Act. And 19 lawmakers wouldn't answer questions from Insider about whether they'd paid a penalty. Ten other lawmakers said they'd paid their fines, but they declined to provide proof, such as a receipt or canceled check.
This lack of transparency makes it impossible to independently determine whether STOCK Act lawbreakers truly face consequences, and if so, to what degree. It's a situation that ethics experts say leaves the public in the dark, lets Congress off the hook, and renders the STOCK Act — intended to promote transparency, extinguish conflicts of interest, and defend against insider trading — toothless.
It also shows how Congress sets a lower standard for itself on financial conflict-of-interest matters than on other concerns. For instance, consider that the House routinely issues automatic fines when members violate COVID-19 mask mandates and makes the information public. But when it comes to a member's personal finances, the House doesn't do a particularly good job of policing itself on a law it helped write.
"The enforcement of the financial-disclosure requirements is virtually nonexistent," said a former investigative counsel in the House's independent Office of Congressional Ethics, who was granted anonymity in order to speak candidly.
Even some federal lawmakers say change is needed.
"From a transparency standpoint, it would be helpful to have that information be public," said Democratic Rep. Abigail Spanberger, of Virginia, who introduced the TRUST in Congress Act, which would require members of Congress to place certain personal investments in a blind trust. "I don't have a sense of how much it is being enforced."
Congress is significantly more opaque than other parts of the government when it comes to the personal financial interests of its members and staffers. The federal government's executive branch, for example, publicly releases details about the fines it collects from employees who filed financial documents late.
As conceived, the STOCK Act is supposed to encourage members of Congress and their top aides to think twice about their personal financial trades, knowing they'd be subject to greater oversight by the public and their colleagues. When they disclose information months or even more than a year later, it becomes difficult to scrutinize their actions.
"The transparency provision allows us to find incidents of potential misdeeds," Spanberger said, "but that transparency only works if people abide by the rules."
Penalty payments rest on an 'honor system'
Under the STOCK Act, lawmakers and their senior staff who earned at least $132,552 a year in 2021 must report stock trades of more than $1,000 within 30 days of the transaction — or within 45 days if they didn't learn about the trade until a little later, often because it was made by a broker or spouse.
If they file their disclosures more than 30 days after their due date, then they have to pay a late fee in the form of a check to the Treasury or apply for a waiver. The waiver process operates like an appeal. It gives people the opportunity to explain why they were late and to ask Senate or House committees to be excused from the penalty.
The notification and collection of late fees differ in the Senate and House.
Senate staffers who file their disclosures late receive an email from the lawmaker-led Senate Select Committee on Ethics telling them to pay the late fee or to apply for a waiver, according to a copy of such an email reviewed by Insider and interviews with staffers. The Senate Ethics Committee didn't respond to questions about how often this happens, how closely staff monitor filings, or whether senators also receive emailed notifications.
Over in the House, members and senior staff who are late filing their stock trades do not receive emailed notifications alerting them to the issue. Instead, the burden falls on the lawmaker or staffer to notice they're late and then notify the committee.
The former investigative counsel at the Office of Congressional Ethics described the late-penalty-compliance process on the House side as "not the simplest thing in the world."
"The committee does not look for late filings. There is no notification or follow-up," the person said. "If you are late and beyond the grace period, you actually have to start making a bunch of calls to figure out how to pay the fine. The instructions aren't even on the ethics-committee site. And then you have to walk the check down."
A senior congressional aide who requested anonymity to candidly discuss House procedures confirmed that members did not get notifications when they were late. Instead, they explained, each member office was expected to figure out not only whether they were late but also how to pay the late fee.
"This entirely depends on the honor system," the aide said.
Little transparency
Without the existence of a public ledger, Insider sought to confirm through other means whether members of Congress and their top aides were paying late fees as the law requires.
Reporters reached out to all 49 members of Congress who filed their information late. Of the total, 13 had filed their disclosures within a 30-day grace period, meaning they were late, but not late enough to face a fine.
Of those who remained, 13 members said they'd paid the penalty. But only four of them — Democratic Rep. Lori Trahan, of Massachusetts, Democratic Rep. Mikie Sherrill, of New Jersey, Democratic Rep. Kim Schrier, of Washington, and Republican Rep. Blake Moore, of Utah — provided documentation to Insider proving that they'd written and dropped off a check for a late fee.
Democratic Sen. Mark Kelly, of Arizona, provided Insider with a document that showed he requested and received a waiver to avoid paying the late filing fee. The senator requested the waiver because he had moved an "asset he already held into his newly established, ethics-committee-approved qualified blind trust," his spokesperson said.
It's unclear whether any of the checks for late fees made it to the Treasury. Attempting to determine whether they did involved months of inquiries.
In July, Insider filed a Freedom of Information Act request with the Treasury that asked for records of "all fees and/or fines paid to Treasury by members of the US House of Representatives, members of the US Senate, and congressional employees."
Initially, the Treasury's Bureau of the Fiscal Service deemed the request "too broad for the Fiscal Service to conduct an adequate search."
Insider then asked the Treasury to produce fine-payment records for 22 specific members of Congress known to have recently violated the STOCK Act's disclosure provisions. Treasury officials searched its systems for evidence of payment.
"We found no matches," said Thomas E. Santaniello, the manager of FOIA and Legislative Affairs for the Bureau of the Fiscal Service, who referred additional questions to the House and Senate ethics committees.
Insider sought an explanation from Tom Rust, the staff director and chief counsel for the House Ethics Committee. But he declined to comment on the fine procedures or say who had or hadn't paid fines. Congress' Legislative Resource Center declined to comment on whether the office received late fees or kept a record of such payments.
Sen. Chris Coons, of Delaware, a Democrat who chairs the Senate Select Committee on Ethics, and Sen. James Lankford, of Oklahoma, the top Republican on the committee, declined to comment on whether there was a record of lawmakers or staff who received fines for violating the STOCK Act.
Coons told Insider to direct other questions to Shannon Kopplin, the chief counsel for the Senate Ethics Committee, but she didn't respond.
Not a top priority for ethics officials
Insider shared its findings with Democratic Sen. Kirsten Gillibrand, of New York, who championed the passage of the STOCK Act under President Barack Obama and has pushed to make it stronger.
Gillibrand said she wasn't surprised that some people weren't following the law. But they must realize that they're duty bound to report their transactions, she said.
"They certainly should be fined, and they should be paying their fines," Gillibrand said. "I would like to see more oversight on that."
Sen. Jeff Merkley, of Oregon, a Democrat who — like Gillibrand — wants to ban Congress from trading individual stocks, said that if the general public can't see who's paying fines, then lawmakers won't take the issue seriously.
"That $200 fine may not be a huge amount to many of our members, but it should be routinely, emphatically enforced," Merkley said. "No excuses."
Politicians should "play by the same rules as everyone else," Eric Schultz, senior advisor to Obama, said in a statement to Insider.
"Mistrust of government runs very deep these days, and only when lawmakers hold themselves to a high standard can we start to rebuild that trust," Schultz said.
On the House side, some of the late-filing violations get looked into by the Office of Congressional Ethics, an independent investigative agency. No similar office exists on the Senate side.
Investigators at the Office of Congressional Ethics examine allegations of misconduct when they receive complaints or otherwise flag potential ethics violations. They make their investigation public in most cases only if they determine they have reason to believe wrongdoing occurred.
But it's the House Committee on Ethics — made up of House members — that decides whether to pursue the Office of Congressional Ethics' findings. These elected officials have the power to reprimand lawmakers, discipline staffers, or do nothing at all.
Between its creation in 2008 through the end of October 2021, the Office of Congressional Ethics initiated 226 investigations, a government report showed. Most of the investigations have targeted issues, such as campaign finances, travel expenses, and official allowances.
In the fiscal year 2020, 4% of its overall investigations involved financial disclosures.
At least one of the investigations became public this year. In October, investigators determined that Democratic Rep. Tom Malinowski, of New Jersey, failed to properly report dozens of stock trades from 2019 and 2020 that together were worth at least $671,000 and as much as $2.76 million. The House Ethics Committee said it was reviewing the matter, and Malinowski has since placed his money in a qualified blind trust, which the House Ethics Committee approved.
Naree Ketudat, Malinowski's spokesperson, said the congressman paid a $200 fine for filing late, but then when he attempted to pay another one, the clerk's office refunded him. The clerk's office did not respond to questions about why this happened.
No reports exist showing how often the Office of Congressional Ethics investigated financial-disclosure matters before the STOCK Act's passage. But one former attorney who worked in the office said nothing changed after lawmakers passed the law.
"We were not looking into it. There was just nobody paying attention to it. No one was filing complaints," said Kedric Payne, who was the former deputy chief counsel at the Office of Congressional Ethics around the time that the STOCK Act was passed.
Most of the investigations they dealt with between 2012 and 2014 involved campaign-finance issues, Payne said.
"When you have the ethics committee, who has failed to go after these blatant violations — it sends a message that anything goes," Payne added.
Not all STOCK Act violations appear nefarious. When Insider reached out to members about late filings, many said they forgot to file on time or didn't notice a filing was missing until they were reviewing financial documents. Others worked with a money manager who failed to notify them of trades in a timely fashion.
Insider also spoke with numerous House staffers about their late filings. Many of them said they were the ones to initially reach out to the House Committee on Ethics to disclose that they'd violated the STOCK Act. Senate staffers, in contrast, receive notices from the Senate Select Committee on Ethics when they're late disclosing stock trades.
But James Thurber, a professor at American University and congressional-ethics expert, said lawmakers should be more forthcoming.
"They're waiting for a problem to blow up, and then they react to it, rather than being forthright and abiding by the rules," he said. "That is controversial and illegal."
Reforms on the table
Experts and lawmakers said the findings underscored the need to make the STOCK Act stronger and to possibly bar members from trading individual stocks altogether.
Tyler Gellasch, a fellow at the Global Financial Markets Center at Duke University School of Law, said the law doesn't go far enough to create more accountability for lawmakers trading stocks.
He's calling for Congress to pass a more extensive measure that would require lawmakers to use a third party, such as a blind trust, to participate in trading stocks. (Congressional lawmakers have this option, subject to approval by either the House or Senate ethics committees on a case-by-case basis.)
Gellasch said the legislation should also require lawmakers and senior congressional staffers to instantaneously file disclosure forms once they make a stock purchase and to disclose the exact amount and day and time the transaction occurred.
Today, lawmakers are only required to disclose the values of their trades in broad ranges, and they have up to 45 days to disclose their stock trades.
"If you are a member of Congress, you have this duty to not take advantage of information you learned because of your job," said Gellasch, who previously served as congressional staffer to former Democratic Sen. Carl Levin, of Michigan, and helped draft the STOCK Act.
Virginia Canter, the chief ethics counsel at Citizens for Responsibility and Ethics in Washington, said Congress' laissez-faire approach to the STOCK Act "sends the message that they are held to a lesser standard than other government employees, and that they are above the law."
Canter called lawmakers' stock-trading habits "an accident waiting to happen." Their difficulties complying with the transparency and accountability provisions in the STOCK Act underscored why members shouldn't trade individual stocks, she added.
Spanberger agreed: "We have regulations, we have rules, we have standards for a reason. And not enforcing them or abiding by them creates fertile ground for people to behave improperly."