Democratic Rep. Kurt Schrader of Oregon is the latest member of Congress to violate a federal conflicts-of-interest law
Bill Clark/CQ Roll Call
- 56 members of Congress have violated the STOCK Act with late or missing disclosures.
- Schrader's late disclosures come as lawmakers debate whether to ban lawmakers from trading stocks.
- Congressional leaders from both parties say they're open to a stock-trade ban, but obstacles remain.
Amid a pitched debate on Capitol Hill whether to ban lawmakers from trading stocks, another member of Congress — Democratic Rep. Kurt Schrader of Oregon — has improperly disclosed corporate stock trades in violation of a federal conflicts-of-interest law.
Combined, Schrader sold up to $30,000 worth of shares in Charter Communications Inc. and insurance giant AON PLC on December 9 and December 14, respectively. But he didn't disclose the sales, as required by the STOCK Act, until early February — days after a 45-day deadline for doing so, according to an Insider review of congressional financial records.
US House of Representatives
Schrader joins 55 other members of Congress and at least 182 senior aides who have in recent months violated the federal Stop Trading on Congressional Knowledge Act of 2012, having failed to disclose stock transactions or other personal financial information within federally mandated deadlines, according to Insider's "Conflicted Congress" investigation.
Insider's "Conflicted Congress" project 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.
Schrader's office acknowledged the tardy disclosure, although spokesperson Molly Prescott said the congressman does not have "any direct involvement in investment decisions as it relates to the purchase or sale of stocks." Prescott said a "financial advisory practice" independently makes stock trade decisions on Schrader's behalf, but would not provide the practice's name.
Federal records indicate that Schrader is one of Congress' more active traders, having purchased or sold dozens of individual stocks during the past year, including those of Apple Inc., Home Depot, Microsoft Corp., defense contractor Northrop Grumman, and Chinese e-commerce company Alibaba Group.
"The congressman is not consulted in advance, nor does he make any suggestions or recommendations on any stock transactions," Prescott said. "The congressman receives a report at the start of each month informing him of any transactions that took place in the previous month."
Congressional records indicate that Schrader has not formed what's known as a "qualified blind trust." The Senate Select Committee on Ethics describes this independently managed, publicly disclosed financial arrangement as Congress' "most comprehensive approach" to "eliminate conflicts of interests and the appearance of them."
Schrader's stock ban stance unclear
Now in his 7th term, Schrader sits on the House Committee on Energy and Commerce's Communications and Technology Subcommittee, which has broad jurisdiction over electronic communications. He also sits on the Energy and Commerce Committee's Subcommittee on Health.
The congressman's office declined to answer questions about whether his investments in Charter Communications, a diversified communications company, and AON PLC, which provides health insurance products, pose a conflict of interest with his committee responsibilities.
Prescott likewise would not comment on whether Schrader supports or opposes banning all federal lawmakers, and potentially their immediate family members, from trading stocks — an idea that's attracted significant bipartisan support in recent weeks.
"Congressman Schrader strongly believes that bad actors who engage in insider trading must be held to account," Prescott said. "There are existing laws to prevent this illegal, unethical behavior, and he believes Congress must do a better job at enforcing them. His stance on this matter is clear — no one is above the law."
US House of Representatives
US House of Representatives
For Schrader, his recent stock disclosures are sometimes handwritten and, on two occasions, incorrect or incomplete. One disclosure did not list a dollar value for a sale of Union Pacific Corp. stock on January 20, 2021. Another disclosure listed the date of a mutual fund purchase as "January 35, 2022." The congressman's most recent annual financial disclosure was also completed by hand and, at times, barely legible.
Members of Congress face a $200 fine for failing to disclose their stock trades on time, but the Committee on House Ethics does not assess a fine for first-time STOCK Act disclosure provision violators if they're late by 30 days or fewer. Schrader's late stock disclosures fell within this "grace period," meaning he will avoid a fine.
"The penalty is very, very tiny and can be waved, and nobody is going to say that the penalties here are deterrents," said Jessica Tillipman, assistant dean for government procurement law studies at The George Washington University Law School in Washington, DC. "If you have millions of dollars of stock trades, you don't care about a $200 penalty."
Schrader's situation is yet another example of a much broader congressional ethics problem that lawmakers themselves are now unable to downplay or ignore, said Tillipman, who on Monday endorsed banning federal lawmakers and their spouses from trading stocks.
"I don't always have strong hope for Congress, especially when it comes to regulating their own behavior," Tillipman told Insider. "But there's a growing consensus that this kind of activity is improper, and the more attention it gets, the more likely it is that something happens."
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