WATCH: Josh Hawley Throws Shade At Mitt Romney And Other Senators For Opposing Stock Trading Ban

3 months ago

During a Senate Homeland Security Committee business meeting, Sen. Josh Hawley (R-MO) defended a bill that would prevent lawmakers from trading assets.

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Transcript

00:00First of all, I want to agree with Senator Romney.

00:04I came in here happy to vote yes on this self-flagellation.

00:08For my own part, what I did when I ran for office, I divested myself of all my marketable

00:13securities and turned them into cash.

00:14I've been sitting on cash.

00:16You know how much I've lost in terms of opportunity costs since that point in time.

00:20From my standpoint, I was able to do that.

00:23I had the capability of doing that.

00:25I thought that would be the honorable thing to do.

00:26My wife purchased an ETF, which this does exempt, and I think that's a good thing.

00:32I would caution people in terms of, I'm going to vote no now.

00:39We don't want to turn Congress into a rich man's club.

00:43I think it already suffers from that.

00:46And again, I thought also, and I would want clarifications, mainly the reason I'm asking

00:51this, is our private businesses exempt or not exempt from this?

00:56I was told, again, it's hard to interpret legislative language, but I had a rather large

01:04manufacturing company, which I did not divest myself immediately.

01:07I since have.

01:09But that would be grotesquely unfair.

01:12We limit the number of people, by the way, qualified people.

01:16I actually want people with manufacturing experience or business experience.

01:21People who have been successful in life.

01:22I'd like to see successful people come to Congress and bring their successful skills

01:27to bear here.

01:28So again, I agree with Senator Romney.

01:34Insider trading is already illegal.

01:37I don't know, I think there's all kinds of suspected abuse.

01:42A lot of people come into Congress, and all of a sudden they're multimillionaires later.

01:47I think we do need to exercise caution, but again, I'm primarily speaking at this point

01:51because I want clarification.

01:54Does this or does this not exempt a private company of somebody who's going to run for

01:59office or a member of Congress?

02:00I mean, all of a sudden, does that have to be divested?

02:03Because I think that would be a travesty, quite honestly.

02:06Is there an answer to that question?

02:11The answer is that it's exempt if it's a small business, as defined by the Small Business

02:17Administration.

02:19So how small is small, defined by ...

02:22500 and under.

02:23500,000 ...

02:24500 employees and under is a small business.

02:30Definitely put me down as no.

02:32Let me ask a question.

02:33So if you have 1,000 employees and you own it, and it's just your private business, you

02:37have to divest of that business?

02:39Yep.

02:40Well, that's insane.

02:41Yeah.

02:42I mean, who would want to do that?

02:43I mean, farms, family businesses have been going on for generations that they keep together

02:49and sometimes families divide it by shares.

02:51We're going to make people divest of those privately owned businesses and we think that's

02:55a good idea?

02:57I don't know.

02:58I mean, the thing is, is the popularity of voting for this to show you're against bad

03:03things is out there, but it's like, you know, one of the senators today said that no congressperson

03:12should enrich themselves from illegally obtained information.

03:16That's not what this bill's about.

03:17This isn't about illegal information, this is about owning stock.

03:20This means you're criminalizing everybody who wants to own stock.

03:23There's potentially a 27th Amendment violation in this too with taking people's salary.

03:28That's being adjudicated before the courts currently.

03:30But to vote against this sounds like, oh gosh, you're for corruption.

03:34Nobody's for corruption.

03:35There are laws.

03:36We passed, and I voted for the Stock Act a couple of years ago, and the Stock Act helped

03:41to ban or further ban what was already illegal.

03:44It has always been illegal to do insider trading for anyone in Congress or otherwise.

03:50With the Stock Act, I understand it is, we reaffirmed that.

03:54But I do fear that we're doing this, and I'm torn between what will, the perception of

03:59how this vote will be, and actually how badly the bill is written of what it will do.

04:07And did any of the authors of the bill have a comment on whether this would require President

04:11Trump to divest?

04:16Senator Hawley, do you know what the answer to that is?

04:20Divest from what?

04:21Stocks.

04:22I don't know what the state of the former president's current portfolio is.

04:28Whoever is elected president would have multiple years to comply.

04:32But I do know there's always an excuse for why we can't do a stock trade bill.

04:36I've heard this for years.

04:38And now we're being told, oh, this was drafted hastily.

04:42That's just simply false.

04:43I mean, we've worked on this for literally years.

04:46So I would just welcome those who now suddenly have concerns.

04:49Where have you been for the last few years?

04:51And listen, I'm happy to work with you as this moves to the floor.

04:55We can always do a substitute amendment.

04:57That's fine.

04:58But I am 100% committed to banning stock trading by members of Congress.

05:03So I'm not going to be dissuaded from that one way or another.

05:06And we can throw up as much chaff as you want to.

05:08But the fact of the matter is, members of Congress should not be trading stock.

05:14They should not be.

05:15And I know that there are those on this panel who have never supported and are never going

05:19to support a stock trade ban.

05:20And that's completely fine.

05:21That's your prerogative.

05:23But let's not pretend that this is about anything other than that.

05:26That's what this is about.

05:27What about banning of owning of your business?

05:29I got a family.

05:30I don't.

05:31But let's say I have a family business and it's got 1,000 employees and I own it.

05:34I have to divest in that.

05:35Do you think that's a good part of your bill?

05:39Is that the current, Mr. Chairman?

05:42Listen, again, I'm happy to work with anybody who has concerns on substance who would actually

05:46like to get to a result on this and thinks it will improve it on the floor.

05:50I'm delighted to work with you on it.

05:52Can I make a suggestion to solve this?

05:54Don't force divestiture.

05:56You run for office.

05:57You have a stock portfolio.

05:58That's it.

05:59Now you can't trade it.

06:02You can't buy more stocks than trade stocks.

06:04You want to run for Congress.

06:05You can hold on to your stocks.

06:08You can always divest.

06:09You can always buy an ETF.

06:12Don't force people to sell their business.

06:14Don't force them to sell stocks they already hold.

06:16Don't force divestiture.

06:18Once you're here, you can't be buying and selling.

06:20Again, I don't do it.

06:22I did divest.

06:23I turned it all into cash.

06:26That's how I handled myself.

06:27I don't want to force what I did on everybody else, though.

06:31Not everybody's in my position.

06:32I don't want to turn Congress into a rich man's club.

06:34And by the way, I certainly don't want to impose a self-flagellation on other branches

06:39of government.

06:40We can do this to ourselves.

06:41I don't think we should do it to the executive branch or the judicial branch.

06:43Can I just...

06:44Congress is a rich man's club.

06:47That's the problem.

06:48That's what we're trying to fix.

06:49I would suspect that I probably have the fewest assets of anybody sitting on this dais.

06:54I am not a rich man, unlike those to my left.

06:58So I mean, listen, the American people look at people like the former Speaker of the House

07:03who makes better returns than anybody in America.

07:06They look at senators who were investigated during the COVID pandemic for their miraculous

07:10stock trades, and they say, how is this possible?

07:14To think that this might become a problem in the future is frankly fanciful.

07:17It's a problem now.

07:20And it's not just in perception.

07:21It is reality.

07:23Members of Congress are trading daily based on information that the public doesn't have.

07:29And now we've heard the insider trading.

07:30I understand that insider trading is banned, but let's be honest.

07:34Members of Congress get information that is technically not insider information as defined

07:38by the securities laws that is nevertheless extremely beneficial to know, and often we

07:42get it earlier than other people do.

07:45That's why senators rushed to trade stock at the beginning of the pandemic and were

07:51investigated for it.

07:52They ultimately couldn't be prosecuted because technically it wasn't a violation of the securities

07:56laws.

07:57Was it a good idea?

07:58No.

07:59Should it be happening?

08:00I submit that it should not be.

08:02So again, I just want to say to anybody who would like to support this bill but says I

08:06have concerns over technical aspects of the drafting, I hear you loud and clear, and I'm

08:09happy to work with you on that.

08:11Answering your question, former President Trump owns 114 million shares of Trump Media

08:18and Technology Group Corp., worth $3.776 billion.

08:24He would be required to divest that, all right?

08:28That would be at a massive disadvantage for him, not to mention his other investments.

08:34So you have Senator Johnson has proposed what makes a lot of sense, which is to say if you

08:39have investments, you don't have to sell them to run for office.

08:44You can't trade.

08:46But I didn't say this bill wasn't drafted quickly or hastily.

08:50I said it was drafted poorly, all right?

08:52There are a number of things the bill does which ought to be done, which I would support.

08:56But causing people that are running for office, including the president of the United States,

09:01to have to divest of all their public and private enterprise securities is simply something

09:06that's a mistake and would prevent people from running from office, including the person

09:11who's a Republican nominee for president.

09:14Senator Marshall, you're recognized for comments, and then Senator Lankford, you're next.

09:18So thank you, Mr. Chairman.

09:19Certainly I acknowledge the issue you all are describing, but I'm still going to support

09:24this bill.

09:25I think it's important enough that we get it to the next step, and hopefully the process

09:29can improve it.

09:30I would be impacted by the current legislation and have to divest myself of companies that

09:36we own prior to getting here.

09:38I would agree with you completely, but I think this is so important we need to move forward.

09:42My only wish is that we would have included spouses the moment it impacts us, because

09:48that's where it's being abused, is on spouses making some of these trades.

09:52When you have hundreds of thousands of people following a spouse's member of Congress through

09:57a Twitter feed, obviously there is a problem.

10:00So I'm ready to move forward with it, appreciate everyone's efforts on this, and yes, it's

10:04got to be amended going forward.

10:08Thank you, Senator.

10:09Senator Lankford.

10:10Thank you, Mr. Chairman.

10:11As a person who's seen to the left of Senator Hawley, we should put our bank accounts side

10:15by side and do some comparisons on it as a former youth pastor.

10:22Let me just ask a couple of questions on this.

10:23Senator Marshall, I think committee is the place to be able to hammer this out rather

10:27than between committee and the floor.

10:31Committees are designed to be able to have this kind of conversation to be able to figure

10:34it out.

10:35And my concern is this gives the perception of members of Congress are no longer trading

10:40wink wink, nod nod, unless it's an ETF, unless it's a mutual fund, unless it's other things.

10:46So you can't trade Apple or Microsoft stock, but you could trade QQQ, which has a huge

10:53percentage in those and basically do the same thing.

10:57That's allowed in this bill.

10:59And so if we're going to try to give the perception that this is blocking members of Congress

11:04from owning or trading stocks, but ignore this other part of the market where they're

11:09still able to play in the market in that area, I just think it's just not being consistent

11:13for us.

11:14That if we're going to say we're out of the market, then we're out of the market.

11:18If we're not, then let's find a way to manage this.

11:20The Stock Act, when we passed that, and I'm one of those that voted for it as well, the

11:23Stock Act said it's already illegal to be able to trade stocks with insider information.

11:28And to make sure that there's maximum amount of enforcement transparency, everybody's got

11:33to disclose every transaction that you have over $1,000.

11:37It's all got to be out there in the public eye and it's got to be immediate.

11:41And there is accountability on that.

11:42I would tell you as a member of the Ethics Committee, we do get contacts from folks saying

11:47there was this trade that happened.

11:48I saw it.

11:49I tracked it.

11:50They were in this committee at this time.

11:52They were in this meeting.

11:53So some of that dialogue does happen behind the scenes to be able to go through all that.

11:57It also, this bill would say that I couldn't own or trade stocks, but my chief of staff

12:05who set up the meeting, who actually met with those people first, now they could.

12:10The legislative person that sat in the meeting with me, when that inside conversation happened,

12:16they could trade on stocks, in fact on that stock, but I couldn't.

12:21So it creates this very interesting, who's actually engaged in actually more inside information

12:28than us, is our staff.

12:30And our staff are all exempted from this bill, saying they have access to all that information,

12:36but members of Congress actually cannot, and actually college-age kids are also exempt

12:41from this.

12:42So a dependent child of a member of Congress, they can't trade on the stock.

12:47But if they're 19, they could.

12:51And the whole issue of crypto that's come up, we haven't discussed here, but my understanding

12:55is this also would preclude a member of Congress from owning cryptocurrency as well, and that's

13:02a big conversation as well on the whole digital side of things that we haven't had discussion on.

13:07My issue is not this topic.

13:09I don't want anyone to be able to trade on inside information, which is already illegal,

13:14and I don't want to even create that perception of trading on that, but again, this is not

13:18trading, this is owning, and this has a lot of exceptions that are built into it that

13:23gives the perception of saying we're not involved in the market when we really are involved

13:27in the market, just in other places in the market, and oh, by the way, our staff's still

13:32involved in all that, but we're not, it just begs some questions that I think need to be

13:36answered, and I think the right place to answer it is in committee, to be able to argue through

13:40this and to be able to figure out what's the best way to write it and do it, rather than

13:43hoping it gets better when it gets to the floor.

13:48Senator Scott.

13:49So, I'm Senator Johnson.

13:52I sold my operating businesses, and many of them had more than 1,000 employees before

13:56I ran for the Senate, so, but it does make sense, and I don't know, we don't want people

14:02to do any insider trading, but is there ability to amend the bill now to just say that it's

14:10not going to apply to what you own when you come into the Senate or whatever job there

14:16is, because that might alleviate a lot of the concerns.

14:21I'm concerned that Johnson Amendment 1.

14:36Johnson Amendment 1 does that?

14:37No, he's...

14:38What's that?

14:40He's saying it will be.

14:41Oh, it will be.

14:42Well, we don't have an amendment to do that now, but you can always do a substitute to

14:45make those kinds of changes that we could vote on going forward.

14:48I think that's tough to do today, but the idea is that this is, we know this process,

14:54and we get it out of committee, there's still a lot of work that gets done.

14:56We take bills out of here, they get changed, it's not going to move if there are folks

15:01that can't be moving on UC, it's going to have difficulty moving if there's opposition,

15:06and we'll have to continue negotiations to get to a point where it can actually move.

15:10But I want to keep the process moving.

15:12I think it's important for us to keep the process moving, and we've done that in this

15:15committee.

15:16How about next week?

15:17This meeting goes on until next week.

15:19Get it drafted and bring it to the meeting next week.

15:26Voting today is very awkward, because I'm not going to vote for this bill the way it

15:30is because of the divestiture provision, but if instead we say people running for Congress

15:35can hold on to private assets and so forth and stocks, they can't trade them, then that's

15:40something I could support.

15:42But we don't want to vote no on a messaging bill that makes us look bad for acting like

15:48we're going to try and allow trading for members of Congress, but let's make the bill something

15:52we can vote for and have a good, positive statement coming out of our committee.

15:56So let's do that next week.

16:04Our amendments are in place right now.

16:06We can do a substitute to have a further discussion on that.

16:11And there's a willingness of folks to vote for a bill if it has their amendments.

16:18Sometimes we have folks in this committee who will put amendments forward and still

16:22have no intention of voting for the bill.

16:25That's kind of an exercise that is not productive in my mind.

16:30But if it's something that would actually bring people to support something of substance,

16:36then we can try, but I think there's support for this legislation as it is right now in

16:41committee, and I'd like to be able to move it today and then continue to have the conversation

16:46to go forward.

16:47Well, I'll offer a substitute amendment.

16:51I have a Romney Amendment 1 is going to be voted on today.

16:54My substitute amendment will be that this provision does not apply to securities which

17:00are owned prior to the individual becoming a member of Congress or becoming president

17:06or vice president.

17:13Security and assets.

17:16We have not seen that amendment, Senator.

17:19You just heard it.

17:27And if subsequent discussions need to improve it, fine.

17:30But I'm going to vote for it.

17:31I'm going to vote for it if that amendment is adopted.

17:34If the amendment is not adopted, you're going to see a lot of Republicans vote against it.

WATCH: Josh Hawley Throws Shade At Mitt Romney And Other Senators For Opposing Stock Trading Ban

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