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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NewsTranscript
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.