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Two more Democrats in Congress fail to properly disclose stock trades

Rep. Bill Pascrell, a Democrat of Maryland
Rep. Bill Pascrell, a Democrat of New Jersey, paid a late fee after he was tardy disclosing stock trades. Bill Clark/CQ Roll Call

  • Democratic Reps. Bill Pascrell and David Trone were late reporting stock trades. 
  • Pascrell held investments in GE and Johnson & Johnson. 
  • They're the latest among other members and senior staff who failed to properly report stock trades.

Democratic Reps. Bill Pascrell of New Jersey and David Trone of Maryland blew past deadlines to report their stock trades, putting them in violation of a federal conflict-of-interest law, according to financial disclosure documents.

The lawmakers are among 52 members of Congress that Insider and other news organizations have this year identified as failing to properly disclose their stock transactions as mandated by the Stop Trading on Congressional Knowledge Act of 2012, also known as the STOCK Act.

Insider's new investigative reporting project, "Conflicted Congress," reveals the myriad ways members of the US House and Senate have eviscerated their own financial ethics standards, avoided consequences, and blinded Americans to the many moments when lawmakers' personal finances clash with their public duties.  

Pascrell was overdue reporting stock trades he made in December 2019 in General Electric and in August 2019 in pharmaceutical company Johnson & Johnson. He didn't file a federally required public disclosure known as a periodic transaction report until July 31, 2020, months past the 30-day deadline he had to report the trades. 

Pascrell's office said the congressman paid a late fee after disclosing his trades past the deadline. Asked for proof that he paid the fine, Pascrell's office produced a copy of the check he wrote to the US Treasury — making him one of only five members of Congress who've demonstrated they've written and dropped off a check for a late fee. 

"After an inadvertent filing oversight, the congressman immediately made a periodic transaction report and paid a $200 fine as required by law," Mark Greenbaum, Pascrell's communications director, told Insider.

The standard fee is $200. But the House Ethics Committee doesn't publicly release a list of members who have paid the penalty. Congress also exempts itself from the Freedom of Information Act, meaning any such records remain secret.

Pascrell valued his GE stock sale between $1,001 and $15,000, and the Johnson & Johnson trade between $15,001 to $50,000, the disclosures show. Lawmakers are required only to disclose the values of their stock trades in broad ranges. 

Rep. David Trone, a Democrat of Maryland
Rep. David Trone, a Democrat of Maryland. Katherine Frey/The Washington Post via Getty Images

Multiple late disclosures for Trone

Most of the transactions Trone listed on his disclosure were not stocks, but structured notes — typically, debt securities issued by banks — that hit maturity. It's not clear whether the House Ethics Committee requires such notes to be disclosed, and the office does not comment on inquiries from reporters. 

Trone became aware of the structured notes when he was working on his annual disclosure, his communications director Sasha Galbreath told Insider. She said the congressman uses a third-party to manage his financial accounts and does not trade himself. 

Trone is the co-founder of Total Wine & More and served as the company's president until December 2016.

"Out of an abundance of caution, Congressman Trone proactively, transparently, and immediately engaged with the House Ethics Committee and submitted a PTR for pre-screen review that listed those transactions, which he ultimately filed," she said, referring to a federal disclosure document known as a periodic transaction report. "The committee did not indicate that the PTR was untimely or in any way out of compliance."

 

Trone's situation is novel. The House Ethics Committee's written guidance on what financial trades members of Congress must disclose in periodic transaction reports does not explicitly list structured notes, said Kedric Payne, senior director of ethics at the nonpartisan Campaign Legal Center who used to be an investigator at the Office of Congressional Ethics, an independent investigative agency.

He added, however, that he thought Trone should by law report them because the Ethics Committee doesn't expressly exempt them from Congress' reporting requirement rule. Exchange traded funds and mutual funds are two common investments that are exempted. For non-exempt investments, members of Congress are required to publicly disclose their trades within 30- to 45-days, depending on the kind of trade. 

Trone's documents also indicated four stock trades that were required to be reported within 30 days, but that the congressman disclosed late.

They included March 2020 sales his wife, June Trone, made in Apple and in Kontoor Brands, Inc., a clothing company. In October 2019, June Trone sold between $15,000 to $50,000-worth of shares in VF Corporation, an apparel and footwear company.

The congressman also listed a Morgan Stanley trade from March 2020 valued between $50,001 and $100,000.

The four stock trades weren't disclosed until August 2020.

 

Insider's reporting has revealed that, on the House side of the US Capitol, it's often up to members of Congress to identify and voluntarily acknowledge any situation where they are tardy in reporting their stock transactions. 

The Senate Select Committee on Ethics, in contrast, more thoroughly reviews annual disclosures and alerts senators and senior staff when they discover missing information or send notifications when a late fee is due. 

Another member of Congress who failed to properly report his stock holdings is Rep. Mike Garcia, a Republican of California who was elected during a May 2020 special election.

He filed an annual report that omitted stock trades but then filed an amendment later that included up to $100,000 in investments in Tesla and up to $15,000-worth of investments in Gamestop.

The omission was first reported in by the American Independent. Garcia's office did not reply to questions about what happened or whether he paid a late fee. 

 

A growing number of STOCK Act violations 

The STOCK Act is designed to offer transparency about where members of Congress and their families are earning money outside of their congressional salaries and to reveal any potential conflicts of interest. 

Insider and other news organizations have now this year identified 49 members of Congress who have failed to properly report their financial trades as mandated by the STOCK Act. 

They include:

Some federal lawmakers voluntarily abstain from trading stocks. Others trade only in bonds, mutual funds, exchange-traded funds, and other garden-variety investments.

Members of Congress who want to formally disassociate themselves from their personal investments can ask their chamber's ethics committee to approve the creation of a qualified blind trust. 

Sen. Jon Ossoff, a Democrat from Georgia, and Malinowski, whose stock trades the House Ethics Committee is investigating, recently created qualified blind trusts for their assets, joining a group of just 10 lawmakers who've taken this aggressive step to disengage from their own wealth. 

The Ban Conflicted Trading Act, sponsored in the Senate by Sen. Jeff Merkley, a Democrat of Oregon, and in the House by Rep. Raja Krishnamoorthi, a Democrat of Illinois, would bar members of Congress from trading individual stocks.

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