Ban lawmakers in all 50 states from buying and selling stocks, some in Congress say. But governors and legislators have mixed feelings.

• Governors, senators, and state legislators are beginning to consider whether states should prohibit lawmakers from trading stocks. 
• Proposals to ban members of Congress from trading stocks are already hot.
• But not all political leaders are convinced that such a stock ban is necessary or right.

A bipartisan push on Capitol Hill to ban federal lawmakers from buying and selling stocks is beginning to spread — into statehouses.

“Public officials should remove all conflicts of interest — whether you’re at the federal or the state level,” said Sen. Elizabeth Warren, a Democrat of Massachusetts, who supports measures to ban lawmakers from trading individual stocks.

“It’s also true whether we’re talking about elected officials or sitting judges, or members of the Federal Reserve,” Warren told Insider. “The public has a right to know that when people in power make decisions, that they’re doing it to advance the best interest of the public, not to advance their own personal financial interests.”

Democratic Sen. Joe Manchin of West Virginia told Insider that “it would make sense” for state lawmakers to ban themselves from trading stocks if Congress passed such a measure for itself. 

Sen. Tom Carper, a Democrat of Delaware, who co-sponsored the Stop Trading on Congressional Knowledge Act of 2012, told Insider it’s time for a “good conversation” on whether other public officials, such as judges, should also adhere to a ban on individual stock trading. 

But he added that only state lawmakers should be the only ones to decide if they want to adopt a similar measure. 

“States are perfectly capable of deciding what rules for their own governors and for their own elected officials. And I don’t know that that’s something that we need to be involved in,” he said. 

The momentum around banning lawmakers from trading stocks comes on the heels of Insider’s “Conflicted Congress” investigation that found that dozens of lawmakers and at least 182 senior-level congressional staffers have violated the STOCK Act by failing to properly disclose their own stock transactions and potential ethical conflicts.

“Conflicted Congress” also found dozens of examples of members of Congress holding stock in companies that clash with their public responsibilities or stated orthodoxies or sat on committees that directly oversee the activities of companies in which they hold shares.   

Lawmakers on both sides of the aisle have introduced measures to ban members of Congress and their spouses from holding or trading individual stocks. Both House Speaker Nancy Pelosi and House Minority Leader Kevin McCarthy have signaled their willingness to advance these measures, as has Senate Majority Leader Chuck Schumer. Senate Minority Leader Mitch McConnell hasn’t endorsed a stock ban plan but says he’s open to one. 

The biggest obstacle in the way of passing meaningful reform measures around stock trading is lawmakers trying to water down the bill, Walter Shaub, a senior ethics fellow for the Project on Government Oversight, previously told Insider.  

In 2021, the Wall Street Journal published a report that found that more than 130 federal judges violated federal law by overseeing cases in which they or their family members had a potential financial interest.

Governors have mixed feelings

State governors offered mixed responses to the notion that their states’ lawmakers should be prohibited from buying and selling individual stocks.

Most US states have few if any rules governing how members of their state legislatures may personally invest their money. And unlike Congress, where members earn at least $174,000 a year and face restrictions on their outside employment, it’s common in many states for elected legislators to run businesses, work outside jobs, and hold stock interests.

“There has not been a problem in the state of Maine,” Janet Mills, the Democratic governor of Maine, said when Insider asked if state lawmakers should consider passing a measure to ban them from trading individual stocks.

“It’s a difficult question.” Republican Arkansas Gov. Asa Hutchinson, who is chairman of the National Governors Association, told Insider when asked if state lawmakers in Arkansas should be banned from trading stocks.

“In Arkansas, you have a lot of great publicly traded companies, and there’s not that much insider information,” he said. “I have developed a personal habit of trying to avoid investing in Arkansas stocks, but I don’t know how broadly that should be done and required. I think it’s something that we need to continue to look at.”

Beto O’Rourke, a former congressman and presidential candidate who is running for governor in Texas to unseat Republican Gov. Greg Abbott, told Insider he fully supported a stock ban for lawmakers.

“I think you have both the real opportunity for conflict of interest and the appearance of conflict of interest and we don’t need any more cause for cynicism in our politics or in our democracy right now, and so I think that’s the right thing to do,” he said. “At the state level I’d love to work with members of the legislature of both parties to make sure that we get that done.”

Democratic Colorado Gov. Jared Polis, a former congressman who was the original co-sponsor of the STOCK Act, said he would be open to meeting with state lawmakers if they were interested in taking up this measure. 

“Our legislators just haven’t brought that up with us, but we would be happy to meet with them if they do,” he said. “When I was in Congress, I never traded stocks, I had a blind trust … but that hasn’t really come up in Colorado yet.”

While attending meetings in Washington, DC, Republican Govs. Doug Burgum of North Dakota and Greg Gianforte of Montana, and Democratic Gov. Roy Cooper of North Carolina, declined to answer Insider’s questions about whether they support a ban on their own states’ lawmakers from trading stocks.

Two state legislators from Missouri and Florida were more direct.

Democratic state Rep. Donna Baringer in Missouri said she is opposed to “elected officials being able to do insider trading.” But when asked if her state legislature is having active conversations about passing laws limiting legislators’ stock trades, she said there’s “no conversations on this topic in our state, and we have other issues that are front and center like redistricting.”

Democratic Florida Rep. Charlie Crist, in contrast, said  state officials in his home state of Florida should consider a stock trading ban for the state’s legislature.

“If Congress can do it, I think Florida officials can do it too,” Crist, a candidate running for governor and vying to unseat Republican Gov. Ron DeSantis, told Insider.

Madison Hall contributed to this article