Proposals to Limit Financial Activities of Members of Congress: Background and Analysis of Legislative Proposals

Summary

Introduction

Amend EIGA to require periodic transaction reports within 7 days

Applies to transactions after enactment

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Members of Congress

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Fine of not more than $1 million or not more than 5 years imprisonment

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Widely held investment funds

Members of Congress and congressional employees who file under EIGA

Prohibit purchase or sale of specified investments or transactions that create a net short position

May divest covered assets for 6 months after enactment for Members, or after taking office for newly elected Members

Civil penalty of not less than 10% of the value of the covered asset

Securities, commodities, or futures, and any comparable economic interests acquired through synthetic means such as the use of derivatives

Widely held investment funds; U.S. Treasury bills, notes, or bonds

Legislation Introduced in the 116^th Congress (2019-2020)

Affected Congressional Officials/Employees

Proposed Action

Timeline

Proposed Penalty

Covered Assets

Exempted Assets

Member, Delegate, or Resident Commissioner

Amends House Rule XXIII to prohibit ownership of common stock

Effective immediately before noon on January 3, 2021

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Common stock of any individual public corporation

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Members of Congress and congressional employees who file under EIGA

Prohibit purchase or sale of specified investments or transactions that create a net short position

May divest covered investment for 6 months after enactment for current Members, or after taking office for new Members

Civil penalty of not less than 10% of the value of the covered asset

Securities, commodities, or futures

Widely held investment funds; U.S. Treasury bills, notes, or bonds

Members of Congress and spouses

Prohibit purchase or sale of covered investments or transactions that create a net short position

May divest covered investment for 6 months after enactment for current Members, or after taking office for new Members

Civil penalty of not less than 10% of the value of the covered asset

Securities, commodities, or futures, and any comparable economic interests acquired through synthetic means such as the use of derivatives

Widely held investment funds; U.S. Treasury bills, notes, or bonds

May maintain control of covered investments held as of the day before the date on which the covered person took office

Members of Congress, spouses, and dependent children

Require placement of covered investments in a qualified blind trust

House and Senate publication of certifications on a public website

Within 90 days of enactment for current Members or within 90 days of taking office for new Members

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Securities, commodities, or futures, and any comparable economic interests acquired through synthetic means such as the use of derivatives

Widely held investment funds; U.S. Treasury bills, notes, or bonds

Affected Congressional Officials/Employees

Members of Congress, Delegates, and Resident Commissioner

Amend House Rule XXIII to prohibit ownership of common stock

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—

Common stock of any individual public corporation

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Amend House Rule XXIII to prohibit ownership of common stock

Effective immediately before noon on January 3, 2023

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Common stock of any individual public corporation

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Members of Congress, spouses, and dependent children

Require placement of covered investments in a qualified blind trust

House and Senate publication of certifications on a public website

Within 90 days of enactment for current Members or within 90 days of taking office for new Members

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Securities, commodities, or futures and any comparable economic interests acquired through synthetic means such as the use of derivatives

Widely held investment funds; U.S. Treasury bills, notes, or bonds

Members of Congress and congressional employees who file financial disclosure reports under the EIGA

Prohibit purchase or sale of covered investments; covered officials may place securities holdings in qualified blind trust

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Civil penalty of not less than 10% of the value of the covered asset

Securities, commodities, or futures and any comparable economic interests acquired through synthetic means such as the use of derivatives

Widely held investments; U.S. Treasury bills, notes, or bonds

Members of Congress and spouses

Amend EIGA to prohibit holding, purchase, or sale of covered financial instruments; covered officials may place holdings in qualified blind trust

Within 180 days of enactment for current Members or within 180 days of taking office for new Members

Disgorge to the Treasury any profit from the transaction or holding; prohibition on deduction of a loss from a covered transaction or holding; and civil fine assessed by supervising ethics committee

Securities, commodities, or futures, and any comparable economic interests acquired through synthetic means such as the use of derivatives

Diversified mutual funds, diversified exchange-traded funds, U.S. Treasury bills, notes, or bonds; or compensation from the primary occupation of a Member's spouse or dependent

Members of Congress, senior congressional staff, spouses, and dependents

Amend EIGA to prohibit purchase or sale of covered financial instruments

Covered officials may place securities holdings in qualified blind trusts

Amend the STOCK Act to require public access to covered officials' financial disclosure and periodic transaction reports

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Fine pursuant to regulations issued by the supervising ethics office of $500 in each case the covered person fails to file a report

Amend STOCK Act to create fines for failure to report ($500 for each case), and require deposit of fines in the Treasury

Civil penalty of not less than 10% of the value of the covered investment that was purchased or sold, or the security in which a net short position was created

Commodities, securities, futures, cryptocurrencies, and any comparable economic interests acquired through synthetic means such as the use of derivatives

Widely held investments; U.S. Treasury bills, notes, or bonds

Members of Congress and spouses

Prohibit ownership of specified assets and require divestment of assets except for widely held investment funds

Divest within 180 days or 5 years of enactment for current Members or within 180 days or 5 years of taking office for new Members, depending on type of asset

Civil fines of not more than $50,000 if determined by a U.S. district court after the Attorney General or Special Counsel brings a civil action

Stocks, bonds, commodities, futures, or "other form of security, including an interest in a hedge fund, a derivative, option, or other complex investment vehicle"

Widely held investments, shares of Settlement Common Stock issued under the Alaska Native Claims Settlement Act (43 U.S.C. §1606(g)(1)(A)); U.S. Treasury bills, notes, or bonds; investment funds held by federal, state, or local government employee retirement plans; small business concern interests; and compensation from the primary occupation of a spouse

Members of Congress, spouses, and dependents

Prohibit ownership of specified assets and require divestment of covered instruments

Divestment within 90 days of enactment for current Members or within 90 days of taking office for new Members

Penalty equal to the Member's entire federal salary, for as long as the violation continues

Publication by the Ethics Committee of individuals found to be in violation

Securities, commodities, or futures, or any comparable economic interests acquired through synthetic means such as the use of derivatives, including investment funds, trusts, employee benefit plans, or deferred compensation plans

Diversified mutual funds; diversified exchange-traded funds; U.S. Treasury bills, notes, or bonds; compensation from primary occupation of Member's spouse or dependent; and investment funds held in a federal, state, or local government employee retirement plan

Members of Congress, spouses, and dependents

Amend the EIGA to require the divestment or placement of covered investments in qualified blind trusts

House and Senate publication of certifications on a public website

Certification within 30 days of enactment for current Members or within 30 days of taking office for new Members

Divest or place covered instruments in a qualified blind trust within 120 days of enactment or within 120 days of taking office for new Members

Written notice by supervising ethics office to Member with warning of potential violation to correct actions

Civil penalty equal to the monthly equivalent of the annual rate of pay payable to the Member of Congress, if filings are not corrected after the supervising ethics office gives 30 days' notice of noncompliance

Securities, commodities, or futures, or any comparable economic interests acquired through synthetic means such as the use of derivatives, including investment funds, trusts, employee benefit plans, or deferred compensation plans

Diversified mutual funds; diversified exchange-traded funds; U.S. Treasury bills, notes, or bonds; compensation from primary occupation of Member's spouse or dependent; and investment funds held in a federal, state, or local government employee retirement plan

Members of Congress

Prohibit purchase or sale of individual securities

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Individual securities

Widely held investment funds

Bill or Resolution

Affected Congressional Party

Proposed Action

Timeline

Proposed Penalty

Covered Assets

Exempted Assets

Members of Congress, Delegates, and Resident Commissioner

Amend House Rule XXIII to prohibit ownership of common stock

—

—

Common stock of any individual corporation

—

Members of Congress, spouses, and dependent children

Require placement of covered investments in qualified blind trusts; Clerk of the House and Secretary of the Senate post certifications on a public website

Within 90 days of enactment for current Members or within 90 days of taking office for new Members

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Securities, commodities, or futures, or any comparable economic interests acquired through synthetic means such as the use of derivatives

Widely held investments; U.S. Treasury bills, notes, or bonds; or compensation through a covered investment from the primary occupation of a Member's spouse or dependent

Members of Congress, Delegates, and Resident Commissioner; congressional employees

Amend EIGA to prohibit purchase or ownership of covered investments

Covered persons may comply with requirements by placing assets in a qualified blind trust

Supervising ethics office shall make notices public not later than 30 days after receipt

Supervising ethics office may grant temporary waivers under certain circumstances; waivers shall be published within 30 days

Purchase prohibition beginning 60 days after enactment or the date on which an individual becomes a covered person

Divestment requirement beginning within 180 days of enactment or the date on which an individual becomes a covered person

Fine of $1,000 after being notified by supervising ethics office

Violations that continue over 30 days incur additional fees equal to $1,000 plus 10% of the value of the covered instruments

Securities, commodities, futures, cryptocurrency or digital assets, or any comparable economic interests acquired through synthetic means (such as the use of derivatives, options, or warrants)

Widely held investment funds, assets held in qualified blind trust or qualified diversified trust; diversified mutual funds, diversified exchange-traded funds; U.S. Treasury bills, notes, or bonds; state or municipal government bills; Thrift Savings Plan (TSP); compensation received by spouse or dependent child from their primary employer; investment fund in a federal, state, or local government retirement plan; or interest in a small business concern or family-owned business (that does not present a conflict of interest)

Members of Congress, Delegates, and Resident Commissioner

Amend House Rule XXIII to prohibit ownership of common stock

Immediately before noon on January 3, 2025

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Common stock of any individual corporation

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Members of Congress and spouses

Prohibit ownership or trading of covered investments

Applies first day of second session of the 118^th Congress (January 3, 2024) for current Members; within 7 days of taking office for new Members; annual certification of compliance to supervisory ethics office, which publishes certification on website

Disgorge to the Treasury any profit from the transaction or holding; prohibition on deduction of a loss from a covered transaction or holding; and civil fine assessed by supervising ethics committee

Securities, commodities, or futures, or any comparable economic interests acquired through synthetic means (such as the use of derivatives, options, or warrants)

Diversified mutual funds; diversified exchange-traded funds; Thrift Savings Plan (TSP); U.S. Treasury bills, notes, or bonds

Members of Congress or family members

Prohibit ownership or trading of any covered investment

Divest within 90 days after enactment or within 90 days of becoming a covered official

Divestment requirement beginning within 90 days of taking ownership of an investment

Penalty equal to the fee under 5 U.S.C. §13106(d)(1) for each violation

During any month a covered official is in violation, would be assessed a penalty equal to that month's congressional salary

Violations published by the supervising ethics office

Securities, commodities, or futures, or any comparable economic interest acquired through synthetic means (such as the use of derivatives, options or warrants), including investment funds, trusts, employee benefit plans, or a deferred compensation plan

Diversified mutual funds; diversified exchange-traded funds; U.S. Treasury bills, notes, or bonds; compensation from primary occupation of spouse or dependent; investment funds held in federal, state, or local government retirement plans

Members of Congress and spouses

Prohibit ownership or sale of covered investments

Depending on type of asset, divest within 180 days or 5 years of enactment for current Members or within 180 days or 5 years of taking office for new Members

Civil fines of not more than $50,000 per violation if determined by a U.S. district court after the Attorney General brings a civil action

Stocks, bonds, commodities, futures, or other forms of securities, including interests in hedge funds, derivatives, options, or other complex investment vehicles

Widely held investments; U.S. Treasury bills, notes, or bonds; federal, state, or local government employee retirement plans; interest in a small business concern; compensation from spouse's primary occupation; Alaska Native Claims Settlement Act Settlement Common Stock

Members of Congress; congressional employees

Prohibit financial trading activities on federal government property or with federal government resources

Supervising ethics office shall issue regulations

90 days after enactment

Fines of not more than $1,000 or the value of the financial activity, whichever is greater; knowing violations fined not more than $5,000, imprisoned not more than 3 years, or both

Individuals found in violation shall be subject to disciplinary action, including potential removal, as determined by employing agency

Stocks, bonds, commodities, futures, cryptocurrency or other digital assets, or other securities (interest in a hedge fund, derivative, option or other complex investment vehicle)

Thrift Savings Plan (TSP)

Members of Congress, spouses, and dependent children

Amend the EIGA to prohibit holding, purchase, or sale of covered financial instruments; covered officials may divest or place covered investments in qualified blind trusts; supervising ethics committee publishes certification on a public website

At enactment: Immediate ban on purchase of covered investments for Members; 90 days for spouse and dependent children

90 days after enactment: ban on sale of covered investments

Within 90 days of enactment for a Member or within 90 days of taking office for a future Member: permitted to sell covered investments

Certify compliance with supervising ethics office within 60 days of new Congress beginning

Civil penalty of equal to the greater of the monthly equivalent of the annual rate of pay for the Member or amount equal to 10% of the value of each covered investment not divested or placed in a qualified blind trust;

Attorney General authorized to file civil action against individual who discloses the contents of a qualified blind trust ($10,000 per communication or 1% of the value of the qualified blind trust)

Securities, commodities, or futures, or any comparable economic interests acquired through synthetic means (such as the use of a derivative, option, or warrant); directly or indirectly held investment funds or holding companies, trusts, employee benefit plans, or deferred compensation plans

Diversified mutual funds; diversified exchange-traded funds; U.S. Treasury bills, notes, or bonds; compensation or security paid from the primary occupation of a Member's spouse; federal, state, or local government employee retirement plans; tax-free state or municipal bonds; Alaska Native Claims Settlement Act Settlement Common Stock

Members of Congress, spouses, and dependent children

Amend EIGA to prohibit ownership of covered financial instruments; covered officials shall divest of covered financial instruments or place them in qualified blind trusts; submit a "pledge of compliance" to the supervising ethics office

House and Senate publication of certifications on a public website

Divestment must occur within 90 days of enactment for current Members or within 90 days of taking office for new Members

Civil fines of not more than $50,000 if determined by a U.S. district court after the Attorney General brings a civil action

Commodities, securities, futures, and any comparable economic interests acquired through synthetic means such as the use of derivatives

Widely held investments; U.S. Treasury bills, notes, or bonds; state or local government bonds; Thrift Savings Plan (TSP) investments

Members of Congress and spouses

Amend EIGA to prohibit purchase or sale of covered investments

On the day of enactment

$25,000 per violation or the value of the covered financial instruments sold or purchased, whichever is higher as determined by the supervising ethics office

Securities as defined in Section 3(a) of the Securities and Exchange Act of 1934 (15 U.S.C. §78c(a))

United States Treasury bills, notes, or bonds; exchange traded funds; mutual funds; or any investment held in a federal, state, or local government employee retirement plan

Members of Congress, spouses, and dependents

Amend EIGA to prohibit ownership, purchase, or sale of covered financial interests

Amend the STOCK Act to require public access to covered officials' financial disclosure and periodic transaction reports

120 days after enactment for current Members or within 120 days of taking office for new Members

Supervising Ethics Office fine of not less than 10% of the value of the covered financial interest

Commodities, securities, futures, cryptocurrencies, and any comparable economic interests acquired through synthetic means such as the use of derivatives

Investment fund registered as an investment company under 15 U.S.C. §80a-3 (Investment Company Act of 1940) and that is diversified under 5 C.F.R. §2640.102; compensation from the primary occupation of the spouse of a covered individual, or any security that issued or paid by the employer of the spouse of a covered individual; U.S. Treasury bills, notes, or bonds

Members of Congress, spouses, and dependents

Prohibit ownership of financial interests in covered defense contractors (person that has entered into a contract, transaction, or other agreement with the Department of Defense, but excludes colleges and universities and nonprofit medical facilities)

Divestment must occur within 120 days of enactment for current Members or within 120 days of taking office for new Members

Divestment of hedge fund, venture capital fund, or other privately held complex investment vehicle must occur within 180 days of enactment for current Members or within 180 days of taking office for new Members

Any assets received while a Member must be divested within 120 days

Civil fines of not more than $50,000 for each violation

Stocks, bonds, commodities, futures, or other form of security the value of which is significantly based on a covered defense contractor or an entity in the defense industrial base, including hedge funds, derivatives, options, or other complex investment vehicles.

Widely held investment funds that do not present a conflict of interest, are diversified, and do not indicate the objective or practice of concentrating funds in covered defense contractors or entities in the defense industrial base; shares of settlement common stock under the Alaska Native Claims Settlement Act; U.S. Treasury bills, notes, or bonds; investment funds held in federal, state, or local government employee retirement plans, or interest in an investment fund registered under the Investment Company Act of 1940

Members of Congress, spouse, child, or spouse of a child

Amend EIGA to prohibit ownership of any foreign financial interest

Prohibit the receipt of wages, salaries, dividends, or other payments from any foreign business

Divestment must occur not later than 30 days after the promulgation of regulations to carry out the act

Divestment for future officeholders must occur within 30 days of taking office

Civil penalty not to exceed twice the value of any foreign interest held or foreign payment received

Financial interest in a foreign business, including stocks, ownership interests, bonds, or debt

Financial interests in a foreign private issuer of securities that are publicly traded on U.S. stock exchanges

Members of Congress and spouses

Amend EIGA to prohibit ownership or trading of covered investments

House and Senate publication of certifications on a public website

180 days of enactment for current Members or within 180 days of taking office for new Members

Disgorge to the Treasury any profit from the transaction or holding; prohibition on deduction of a loss from a covered transaction or holding; and civil fine assessed by supervising ethics committee

Commodities, securities, futures, and any comparable economic interests acquired through synthetic means such as the use of derivatives

Diversified mutual funds; diversified exchange-traded funds; U.S. Treasury bills, notes, or bonds; and compensation from primary occupation of a Member's spouse or dependent

Members of Congress, spouses, and dependent children

Amend EIGA to prohibit ownership or trading covered investments and to require divestiture of covered financial interest

Later of 180 days of enactment or the date which the covered individual assumes office or employment

Disgorge to the Treasury any profit from the transaction or holding; fine of not less than 10% of the value of the covered financial investment

Commodities, securities, futures, and any comparable economic interests acquired through synthetic means such as the use of derivatives

Diversified mutual funds diversified exchange-traded funds; U.S. Treasury bills, notes, or bonds; compensation from primary occupation of covered individual

Members of Congress, spouses, and dependent children

Amend EIGA to require divestiture or placement of assets in a blind trust

Certification required within 30 days of enactment for Members of Congress, or within 30 days of becoming a Member of Congress; divestiture or blind trust required with 120 days of enactment for Members of Congress, or within 120 days of becoming a Member of Congress

Civil penalties equal to the monthly equivalent of the annual rate of pay for Members of Congress

Commodities, securities, futures, and any comparable economic interests acquired through synthetic means such as the use of derivatives, options, and warrants, including investment funds, trusts, employee benefit plans, or deferred compensation plans

Diversified mutual funds; diversified exchange-traded funds; U.S. Treasury bills, notes, or bonds; compensation from primary occupation of Member's spouse or dependent child; investments in federal, state, or local government employee retirement plans

Source: CRS summary and analysis of proposed legislation.

Notes: Also introduced in the 118^th Congress was a resolution (H.Res. 938) that would have expressed the House of Representatives' support for a comprehensive political reform plan, which would include a ban on Members of Congress holding and trading individual stocks during their tenures.

Footnotes

Code of Ethics for Government Service (H.Con.Res. 975 (1958), 72 Stat. B12). The standards included in the Code of Ethics for Government Service are still recognized as continuing ethics guidance in the House and Senate. They are not legally binding, because the code was adopted by congressional resolution, not by public law. The Code of Ethics for Government Service is cited by many House and Senate investigations. For example, see U.S. Congress, House Committee on Standards of Official Conduct, Investigation of Certain Allegations Related to Voting on the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, report, 108^th Cong., 2^nd sess., H.Rept. 108-722 (2004), p. 38.

P.L. 95-521, 92 Stat. 1824 (1978); 5 U.S.C. §§13101-13111.

EIGA, 5 U.S.C. §§13101-13111; and STOCK Act, P.L. 112-105, 126 Stat. 291 (2012).

Beth Nolan, "Removing Conflicts from the Administration of Justice: Conflicts of Interest and Independent Counsels Under the Ethics in Government Act," Georgetown Law Journal, vol. 79, no. 1 (October 1990), p. 2.

U.S. Congress, Committee on House Administration, Examining Stock Trading Reform for Congress, hearing, 117^th Cong., 2^nd sess. (April 7, 2022), https://www.govinfo.gov/content/pkg/CHRG-117hhrg47699/pdf/CHRG-117hhrg47699.pdf; https://cha.house.gov/committee-activity/hearings/examining-stock-trading-reforms-congress; and https://democrats-cha.house.gov/committee-activity/hearings/examining-stock-trading-reforms-congress. See also, CRS Testimony TE10073, Examining Stock Trading Reforms For Congress, by Jacob R. Straus; and CRS Insight IN11860, Stock Trading in Congress: 117th Congress Proposals to Limit or Prohibit Certain Financial Transactions, by Jacob R. Straus.

P.L. 101-194, 103 Stat. 1724 (1989); P.L. 112-105, 126 Stat. 291 (2012); 5 U.S.C. §§13101-13111.

5 U.S.C. §13101(12)-(13); and 5 U.S.C. §13103(f)(9)-(10). The House Ethics Manual defines financial disclosure filers as "all Members of the House and those House employees earning―above GS-15, that is, at least 120% of the federal GS-15 base level salary, for at least 60 days during the calendar year." U.S. Congress, House Committee on Standards of Official Conduct, House Ethics Manual, "Who Must File," 117^th Cong., 2^nd sess., December 2022, p. 262. For CY2024, "the GS-15, step 1, basic pay rate ... is $123,041. The applicable 120% calculation for that rate is therefore $147,649, or a monthly salary of equal to or more than $12, 304. This rate is referred to as the 'senior staff rate.'" U.S. Congress, House, Committee on Ethics, "The 2024 Outside Earned Income Limit and Salaries Triggering the Financial Disclosure Requirement and Post-Employment Restrictions," Pink Sheet, January 17, 2024, p. 2, https://ethics.house.gov/wp-content/uploads/2024/06/2024-Annual-Pay-Memo.pdf. The Senate uses the same definition for filers. See U.S. Congress, Senate, Select Committee on Ethics, "Chapter 5: Financial Disclosure," Senate Ethics Manual, 2003 edition, p. 125, https://www.ethics.senate.gov/public/_cache/files/f2eb14e3-1123-48eb-9334-8c4717102a6e/2003-senate-ethics-manual.pdf#page=135.

5 U.S.C. §13109(f)(9)-(10). U.S. Congress, House Committee on the Judiciary, Ethics in Government Act of 1977, report to accompany H.R. 1, 95^th Cong., 1^st sess., November 2, 1977, H.Rept. 95-800 (1977), p. 16. For further clarification on the definition of Members of Congress and officers or employees of the Congress, see 5 U.S.C. §13101(12)-(13).

U.S. Congress, House, Office of the Clerk of the House of Representatives, Financial Disclosure Reports, https://disclosures-clerk.house.gov/PublicDisclosure/FinancialDisclosure; and U.S. Congress, House, Committee on Ethics, "Financial Disclosure," https://ethics.house.gov/financial-disclosure.

Senate Rule XXXIV. U.S. Congress, Senate, Secretary of the Senate, "Senate Public Financial Disclosure (Senate Rule 34)," Public Disclosure, https://www.senate.gov/pagelayout/legislative/g_three_sections_with_teasers/lobbyingdisc.htm; and U.S. Congress, Senate, Select Committee on Ethics, "Financial Disclosure," https://www.ethics.senate.gov/public/index.cfm/financialdisclosure.

Once financial forms are filed with the appropriate House or Senate office, the Ethics Committees can review documents for compliance with EIGA. If a potential conflict of interest has been identified, the remediation process is implemented differently in the three branches of government. For example, executive branch officials can be required to recuse themselves from a matter due to a real or perceived financial conflict of interest, as there is almost always another individual within the agency who can act in the absence of an agency decisionmaker. 18 U.S.C. §208(a); 5 C.F.R. §2634.605(b)(6). For more information, see U.S. Office of Government Ethics (OGE), Effective Screening Arrangements for Recusal Obligations, DO-04-012, Washington, DC, June 1, 2004, https://www.oge.gov/Web/OGE.nsf/0/A633CAF20D2571F5852585BA005BED3D/$FILE/DO-04-012.pdf; and OGE, "LA-14-06: Flexibility in Ensuring and Documenting Compliance with Ethics Agreements," https://www.oge.gov/Web/OGE.nsf/0/E527228F98093F59852585BA005BEC70/$FILE/eecbe744513c40b7a3c049def23f2fdd3.pdf.

In the executive branch, other remediation options exist besides recusal. These can include divestiture, issuance of waivers, creation of blind or diversified trusts, reassignment, and/or resignation. For a discussion of recusal and the Federal Vacancies Reform Act of 1998 (Vacancies Act; 5 U.S.C. §§3345-3349c), see CRS Report R44997, The Vacancies Act: A Legal Overview, by Valerie C. Brannon. For a discussion of conflicts of interest in the executive branch, see CRS Report R47320, Financial Disclosure in the U.S. Government: Frequently Asked Questions, by Jacob R. Straus. For a discussion of conflicts of interest in the judiciary, see CRS Legal Sidebar LSB10949, Financial Disclosure and the Supreme Court, by Whitney K. Novak.

For Members of Congress, a required recusal policy is potentially problematic. Only Members of Congress can represent their constituencies by speaking and voting in congressional committees and on the House or Senate floor. Further, House rules note that "every member … shall vote on each question put, unless having a direct personal or pecuniary interest in the event of such question." U.S. Congress, House, "Rule III, clause 1," Rules of the House of Representatives One Hundred Nineteenth Congress, p. 4, https://rules.house.gov/sites/evo-subsites/rules.house.gov/files/documents/houserules119thupdated.pdf#page=6. Historically, some legislatures, including the House of Representatives, have had recusal policies. For example, in the 1^st Congress (1789-1791), the House adopted a rule that stated: "No member shall vote on any question, in the event of which he is immediately and particularly interested." (Annals of Congress, 1^st Cong., 1^st sess. (April 7, 1789), pp. 103-104). Similarly, Thomas Jefferson in his 1801 version of A Manual of Parliamentary Practice (which today is included as "Jefferson's Manual" in Constitution, Jefferson's Manual and Rules of the House of Representatives, available at https://www.govinfo.gov/content/pkg/HMAN-118/pdf/HMAN-118.pdf), wrote "Where the private interests of a member are concerned in a bill or question, he is to withdraw. And where such an interest has appeared, his voice has been disallowed, even after a division. In a case so contrary not only to the law of decency, but to the fundamental principles of the social compact, which denies to any man to be a judge in his own cause, it is for the honour of the House that this rule of immemorial observance should be strictly adhered to." (Thomas Jefferson, A Manual of Parliamentary Practice: Composed Originally for the Use of the Senate of the United States (Philadelphia: Parrish, Dunning, & Means, 1853), p. 44, https://hdl.handle.net/2027/uva.x004967171?urlappend=%3Bseq=46%3Bownerid=27021597767321586-50).

U.S. Congress, House, Committee on Ethics, "Financial Disclosure Guidance," at https://ethics.house.gov/forms/fd-guidance; and U.S. Congress, Senate, Select Committee on Ethics, "Chapter 5: Financial Disclosure," Senate Ethics Manual, 2003 edition, https://www.ethics.senate.gov/public/index.cfm/files/serve?File_id=f2eb14e3-1123-48eb-9334-8c4717102a6e.pdf#page=135.

P.L. 112-105, 126 Stat. 291 (2012). The STOCK Act was renamed the Rep. Louise McIntosh Slaughter Stop Trading on Congressional Knowledge Act by P.L. 115-277 (132 Stat. 4167 (2018)).

For more information on insider trading, see CRS In Focus IF11966, Insider Trading, by Jay B. Sykes. The STOCK Act (P.L. 112-105, §13) also prohibits Members, officers, and employees who file financial disclosure statements from participating in initial public offerings (IPOs). In a February 2019 memorandum to House Members, officers, and employees, the House Ethics Committee noted that "while interpretation and enforcement of the STOCK Act regarding participation in IPOs is chiefly within the jurisdiction of the SEC and Department of Justice, the opinion of the Committee is that, as drafted, the STOCK Act prohibits only the filer from participating in IPOs, but not the filer's spouse or dependent child, assuming the assets used for the purchase and the securities purchased are wholly owned by the spouse or dependent child, separate and independent of the filer." See U.S. Congress, House Committee on Ethics, Summary of Activities One Hundred Sixteenth Congress, 116^th Cong., 2^nd sess., December 31, 2020, H.Rept. 116-703, p. 47, note 18. (Hereinafter House Ethics Committee, Summary of Activities, 116^th Congress).

P.L. 112-105, §6(a). Covered filers are required by the EIGA to "report on their annual FD Statement each purchase, sale, or exchange transaction involving real property held for investment, stocks, bonds, commodities futures, or other securities (including cryptocurrencies and options) made by the filer, their spouse, or dependent child when the amount of the transaction exceeds $1,000. For sales transactions, the $1,000 threshold is based on the total dollar value of the transaction, not the gain or loss made on the sale." See House Ethics Committee, Summary of Activities, 116^th Congress, p. 44. For more information, see U.S. Congress, House, Committee on Ethics, "Reminder of STOCK Act Requirements, Prohibition Against Insider Trading & New Certification Requirements," June 11, 2020; and U.S. Congress, Senate, Select Committee on Ethics, "STOCK Act Requirements for Senate Staff," June 15, 2012, https://www.ethics.senate.gov/public/_cache/files/e63d0a27-19b2-4bf3-b26e-9073ff179e3e/stock-act-requirements-for-senate-staff-1-.pdf.

5 U.S.C. §13107. For Representatives and Senators, periodic transaction reports and financial disclosure reports are available for public inspection on the Clerk of the House's and Secretary of the Senate's websites, respectively. Periodic transaction reports and financial disclosure reports for officers and other covered congressional employees are not available for public inspection (P.L. 113-7, §1(a)(1), 127 Stat. 438 (2013)).

To contact the House Ethics Committee, see https://ethics.house.gov. To contact the Senate Select Committee on Ethics, see https://www.ethics.senate.gov.

In addition to measures that would limit Representatives, Senators, and other congressional officials and employees, some bills also proposed to limit or prohibit specific executive branch officials or federal judges from holding, purchasing, and selling certain assets. Those proposals would have extended ownership prohibitions to all financial disclosure filers under the EIGA (H.R. 6461, 116^th Congress); prohibited the President, the Vice President, the Chief Justice of the United States, Associate Justices of the Supreme Court, members of the Board of Governors of the Federal Reserve System, and presidents and vice presidents of Federal Reserve Banks from engaging in certain transactions (H.R. 6694 and S. 3612, 117^th Congress); or prohibited stock ownership by executive branch officials (President, Vice President, political appointees, and certain senior career employees) and federal judges (H.R. 6684, 117^th Congress).

U.S. Congress, House, Committee on Ethics, House Ethics Manual, 117^th Cong., 2^nd sess., 2022 print, pp. 234, 247-248, 250, 369; and U.S. Congress, Senate, Select Committee on Ethics, Senate Ethics Manual, p. 124. Senate Rule 37(7) generally requires certain committee staff to divest themselves of "any substantial holdings which may be directly affected by the actions of the employing committee, unless the Ethics Committee after consultation with the employee's supervisor approves other arrangements." See Senate Ethics Manual, pp. 70-71, 218-220; and U.S. Senate, Committee on Rules and Administration, "Rule XXXVII: Conflict of Interest," Rules of the Senate, https://www.rules.senate.gov/rules-of-the-senate. In the Senate, covered Senate staff are required to "divest themselves of any substantial holdings which may be directly affected by the actions of the employing committee, unless the Ethics Committee after consultation with the employee's supervisor approves other arrangements." Covered staff include "committee staff paid at a rate of pay in excess of $25,000 a year and employed for more than 90 days." U.S. Congress, Senate, Select Committee on Ethics, Senate Ethics Manual, 108^th Cong., 1^st sess., S.Pub. 108-1, 2003, pp. 70-71, 124, https://www.ethics.senate.gov/public/_cache/files/f2eb14e3-1123-48eb-9334-8c4717102a6e/2003-senate-ethics-manual.pdf.

5 U.S.C. §13108(b)(3). That section states "If ... a person designated by a congressional ethics committee ... reaches an opinion under paragraph (2)(B) that an individual is not in compliance with applicable law and regulations, the official or committee staff shall notify the individual of that opinion and, after an opportunity for personal consultation (if practicable), determine and notify the individual of which steps, if any, would in the opinion of such official or committee be appropriate for or[typo/something missing?] assuring compliance with such laws and regulations and the date by which such steps should be taken. Such steps may include, as appropriate—(A) divestiture; (B) restitution; (C) the establishment of a blind trust; (D) request for an exemption under section 208(b) of title 18; or (E) voluntary request for transfer, reassignment, limitation of duties, or resignation."

U.S. Congress, House Committee on Ethics, House Ethics Manual, 117^th Cong., 2^nd sess. (2022 print), p. 260, https://ethics.house.gov/wp-content/uploads/2023/12/Dec-2022-House-Ethics-Manual-website-version.pdf#page-274.

U.S. Congress, Senate Select Committee on Ethics, Senate Ethics Manual, 108^th Cong., 1^st sess., S.Pub. 108-1 (2003), pp. 70-71, 124, https://www.ethics.senate.gov/public/_cache/files/f2eb14e3-1123-48eb-9334-8c4717102a6e/2003-senate-ethics-manual.pdf. Covered Senate staff include "committee staff paid at a rate of pay in excess of $25,000 a year and employed for more than 90 days." They are required to "divest themselves of any substantial holdings which may be directly affected by the actions of the employing committee, unless the Ethics Committee after consultation with the employee's supervisor approves other arrangements."

115^th Congress: S. 3718. 116^th Congress: H.R. 6461 and S. 7200. 117^th Congress: H.R. 336, H.R. 6490, S. 3504, H.R. 6694, S. 3612, H.R. 6678, S. 3631, H.R. 6844, and S. 3494; 118^th Congress: H.R. 345, H.R. 1463, H.R. 2678, H.R. 1138, H.R. 1679, H.R. 3003, H.R. 7264, H.R. 8177, S. 58, S. 439, S. 1171, S. 2463, and S. 2773. H.R. 8177 (118^th Congress) would have also included the spouse of a covered official's child.

116^th Congress: H.R. 6401 and S. 1393. 117^th Congress: H.R. 1579, S. 564, H.R. 6694, and S. 3612. 118^th Congress: H.R. 389.

117^th Congress: H.R. 336 and S. 3494. The creation of a limitation on ownership or sale of certain financial assets after a Representative or Senator leaves the House of Representatives or Senate might be parallel to existing "revolving door" provisions that restrict covered former government officials from engaging in certain activities for a specified period after they leave government service. For more information on the revolving door, see 18 U.S.C. §208 and CRS Report R45946, Executive Branch Service and the "Revolving Door" in Cabinet Departments: Background and Issues for Congress, by Jacob R. Straus.

118^th Congress: H.R. 2383.

116^th Congress: H.R. 7200. 117^th Congress: H.R. 6490 and S. 3504. 118^th Congress: H.R. 345, H.R. 1138, H.R. 2678, H.R. 3003, H.R. 6141, S. 58, S. 439, S. 1171, and S. 2773.

115^th Congress: S. 3718. 116^th Congress: H.R. 6401, H.R. 6461, and S. 1393. 117^th Congress: H.R. 6490 and S. 3504. 118^th Congress: H.R. 389, H.R. 1679, H.R. 2678, H.R. 3003, H.R. 6141, S. 1171, and S. 2773.

117^th Congress: H.R. 6694 and S. 3612. 118^th Congress: H.R. 345, H.R. 389, H.R. 2678, H.R. 3003, S. 1171, and S. 2773.

See also INS v. Chadha (462 U.S. 919 (1983)), holding that the actions of one chamber cannot alter the legal rights of those outside the legislative branch. Traditionally, when a Representative or Senator departs the House or Senate, the House Ethics Committee or the Senate Select Committee on Ethics loses jurisdiction over the former Member. For example, the House Committee on Ethics notes "As a general matter, the Committee's investigative jurisdiction extends to current House Members, officers and employees. When a Member, officer, or employee, who is the subject of a Committee investigation, resigns, the Committee loses jurisdiction over the individual." House Ethics Committee, Summary of Activities, 116^th Congress, p. 14; and House Rule XI, clause 3(a)(2).

For more information on adopting the rules of the House, see CRS Report RL30725, The First Day of a New Congress: A Guide to Proceedings on the House Floor, by Christopher M. Davis.

116^th Congress: H.R. 3419. 117^th Congress: H.R. 459 and H.Res. 873. 118^th Congress: H.R. 507 and H.Res. 156.

For example, see H.R. 459, §5 (117^th Congress). Similarly, H.Res. 156 (118^th Congress) would prohibit the ownership of "the common stock of any individual public corporation." (emphasis added)

House Rule X(1)(g).

Senate rules divide its code of conduct among several rules. These include Senate Rule XXXIV (public financial disclosure), Rule XXXV (gifts), Rule XXXVI (outside earned income), and XXXVII (conflict of interest). For more information, see U.S. Congress, Senate, Committee on Rules and Administration, "Rules of the Senate," https://www.rules.senate.gov/rules-of-the-senate.

Commodities are generally defined in Section 1a of the Commodity Exchange Act; 7 U.S.C. §1a. Securities and security futures are generally defined in Section 3(a) of the Securities Exchange Act of 1934; 15 U.S.C. §78c(a).

For a full list of executive branch agency supplemental ethics regulations, which for some agencies include limitations on the ownership of certain assets, see 5 C.F.R. §§13100-10400.

5 C.F.R. §5801.102(b).

The Office of Government Ethics (OGE) notes, "an investment fund is widely held if the fund has at least 100 natural persons as direct or indirect investors. For example, if a pension plan invests in the ABC Fund, one would count each plan participant toward the 100-person threshold when determining whether the ABC Fund is widely held." See U.S. Office of Government Ethics, Confidential Financial Disclosure Guide: OGE Form 450, October 2023, p. 32, https://oge.gov/web/OGE.nsf/0/11AF3BE8C3A7F42A85258A6200572AC9/$FILE/Confidential%20Fin%20Disc%20Guide%202023%20Accessible.pdf#page=32. Similar guidance exists in OGE's Public Financial Disclosure Guide: OGE Form 278e, January 2024, p. 267, https://www.oge.gov/web/OGE.nsf/0/CA85FBF583663FEE85258ABA00668E69/$FILE/Public%20Fin%20Disc%20Guide%20Jan%202024.pdf#page=267.

5 U.S.C. §13104(f)(8). For more information, see U.S. Congress, House Committee on Ethics, Financial Disclosure Reports for Calendar Year 2023 and Periodic Transaction Reports, p. 30, https://ethics.house.gov/wp-content/uploads/2024/11/FDInstructionGuide_current_2023.pdf#page=30; and U.S. Congress, Senate Select Committee on Ethics, Financial Disclosure Instructions and Report for Calendar Year 2023, pp. 15, 24, https://www.ethics.senate.gov/public/_cache/files/270d3e6d-8430-477a-a942-bfb7be7ac219/2023-financial-disclosure-instructions.pdf.

116^th Congress: H.R. 7200. 117^th Congress: H.R. 336, H.R. 1579, H.R. 6694, H.R. 6844, S. 564, S. 3494, and S. 3612. 118^th Congress: H.R. 345, H.R. 389, H.R. 3003, and S. 2773.

5 C.F.R. §2634.401.

5 C.F.R. §2634.401(a).

U.S. Congress, Senate Select Committee on Ethics, Qualified Blind Trusts, 119^th Cong., 1^st sess., February 2025, p. 4, https://www.ethics.senate.gov/public/_cache/files/286a4cf9-5aab-40ef-9a6c-bf2278e79e38/qualified-blind-trusts-guide--october-2020.pdf. (Hereinafter Senate Select Committee on Ethics, Qualified Blind Trusts.)

U.S. Congress, House Committee on Ethics, "Trusts," Specific Disclosure Requirements, https://ethics.house.gov/financial-dislosure/specific-disclosure-requirements.

Perry A. Pirsch, "Blind Trusts as a Model for Campaign Finance Reform," William & Mary Policy Review, vol. 4, no. 1 (Fall 2012), p. 224.

Senate Select Committee on Ethics, Qualified Blind Trusts, p. 2. See also National Conference of State Legislatures, "Blind Trusts," https://www.ncsl.org/ethics/blind-trusts.

Senate Select Committee on Ethics, Qualified Blind Trusts, p. 2.

117^th Congress: H.R. 336 and S. 3494. 118^th Congress: H.R. 345, H.R. 3003, and S. 2773. House and Senate staff are not included in these proposed blind trust requirements.

For example, H.R. 336 (117^th Congress) would require action with 90 days of enactment for current Members, or 90 days of being sworn in for new Members.

117^th Congress: H.R. 1579, H.R. 6490, H.R. 6694, S. 564, S. 3504, and S. 3612. 118^th Congress: H.R. 2678 and S. 1171.

National Conference of State Legislators, "Blind Trusts," at https://www.ncsl.org/research/ethics/blind-trusts.aspx.

Megan J. Ballard, "The Shortsightedness of Blind Trusts," University of Kansas Law Review, vol. 56 (October 2007), p. 53.

Whether or not the supervising ethics offices currently have the resources necessary for the review of additional filings, including approving new QBTs, could not be fully analyzed by CRS using the limited public information it was able to identify. CRS has not located any public comments or statements from either the House Ethics Committee or Senate Select Ethics Committee on the need for additional staff or resources. Without a public record comment from the committees, CRS cannot determine whether the House Ethics Committee or the Senate Select Committee on Ethics currently has adequate resources to carry out potential additional administrative ethics functions pursuant to EIGA and the STOCK Act.

The House and Senate do not currently appear to publish data on the number of qualified blind trusts reviewed or certified. The House Ethics Committee and the Senate Select Committee on Ethics, however, do report the total number of financial disclosure and periodic transaction reports that they receive annually. Using data from the 116^th Congress (2019-2020), the House reported that it received 6,331 financial disclosure reports and 3,722 periodic transaction reports filed by Members, officers, and employees of the House. The Senate Select Committee on Ethics reported that it received 3,712 public financial disclosure and periodic disclosure of financial transactions reports in 2020 and 3,876 public financial disclosure and periodic disclosure of financial transaction reports in 2021. House Ethics Committee, Summary of Activities, 116^th Congress, p. 7; U.S. Congress, Senate, Select Committee on Ethics, "Annual Report of the Select Committee on Ethics 117^th Congress, First Session," January 29, 2021, https://www.ethics.senate.gov/public/_cache/files/691e5e65-5b73-4e95-8cdb-de056570cb34/annual-report-for-2020.pdf; and U.S. Congress, Senate, Select Committee on Ethics, "Annual Report of the Select Committee on Ethics 117^th Congress, Second Session," January 31, 2022, https://www.ethics.senate.gov/public/_cache/files/9a2ce840-718c-409b-891f-42f5ebf6f365/annual-report-for-2021.pdf.

5 U.S.C. §13103; P.L. 112-105, §8, 126 Stat. 295 (2012).

5 U.S.C. §13107. Forms can be accessed at U.S. Congress, House, Office of the Clerk of the House of Representatives, "Financial Disclosure Reports," at https://disclosures-clerk.house.gov/PublicDisclosure/FinancialDisclosure; and U.S. Congress, Senate, Secretary of the Senate, "Senate Public Financial Disclosure (Senate Rule 34)," Public Disclosure, https://www.senate.gov/pagelayout/legislative/g_three_sections_with_teasers/lobbyingdisc.htm.

P.L. 113-7, §1(a)(1), 127 Stat. 438 (2013). This law modified the STOCK Act to exempt officers and employees from public, online disclosure of their financial disclosure and periodic transaction reports.

In the 117^th Congress, H.R. 6694 and S. 3612 would have required public access changes. The following proposals would have required placement of proposed certification of compliance forms on public web pages: 116^th Congress: H.R. 7200; 117^th Congress: H.R. 336, H.R. 6490, S. 3494, and S. 3504; and 118^th Congress: H.R. 345, H.R. 1138, H.R. 2678, H.R. 3033, S. 58, S. 439, S. 1171, and S. 2773.

Proposed monetary fines have ranged from $500 (H.R. 6694 and S. 3612, 117^th Congress) to not more than $1 million (S. 3451, 115^th Congress). Other proposed fines have included $1,000 (H.R. 389, 118^th Congress), $10,000 (H.R. 2678 and S. 1171, 118^th Congress), $25,000 (H.R. 6141, 118^th Congress), and $50,000 (H.R. 6678 and S. 3631, 117^th Congress; and H.R. 1679, H.R. 3003, and H.R. 7264, 118^th Congress).

115^th Congress: S. 3718. 116^th Congress: H.R. 6401, H.R. 6461, and S. 1393. 117^th Congress: H.R. 1579, S. 564, H.R. 6694, and S. 3612. 118^th Congress: H.R. 389, H.R. 2678, S. 1171, and S. 2463.

118^th Congress: H.R. 8177.

118^th Congress: H.R. 6141.

117^th Congress: H.R. 6490 and S. 3504. 118^th Congress: H.R. 1138, S. 58, S. 439, and S. 2463.

117^th Congress: H.R. 6844.

117^th Congress: S. 3949. 118^th Congress: S. 2773. In the 118^th Congress, H.R. 1463 would have levied a penalty of the Member of Congress's salary for any month that the Member or their family was in violation of the law.

117^th Congress: H.R. 6844.

5 U.S.C. §13106(b). The EIGA specifies that "the Attorney General may bring a civil action in any appropriate United States district court against any individual who knowingly and willfully falsifies or who knowingly and willfully fails to file or report any information that such individual is required to report pursuant to section [13104] of this title. The court in which such action is brought may assess against such individual a civil penalty in any amount, not to exceed $50,000." 5 U.S.C. §13106(a)(1).

5 U.S.C. §13106(c).

U.S. Congress, House, "Rule XXVI-Financial Disclosure," Constitution, Jefferson's Manual, and Rules of the House of Representatives of the United States One Hundred Seventeenth Congress, 117^th Cong., 2^nd sess., 2023, H.Doc. 117-161, §1103, p. 1034, https://www.govinfo.gov/content/pkg/HMAN-118/pdf/HMAN-118.pdf#page=1047.

U.S. Congress, Senate, Committee on Rules and Administration, "Rules of the Senate," at https://www.rules.senate.gov/rules-of-the-senate.

U.S. Congress, House Committee on Standards of Official Conduct, House Ethics Manual, "Failure to File or Filing False Disclosure Information," 110^th Cong., 2^nd sess., 2008, p. 265; and U.S. Congress, Senate Select Committee on Ethics, Senate Ethics Manual, committee print, 108^th Cong., 1^st sess., S.Prt. 108-1, 2003, p. 127.

Jennifer Manning, Senior Research Librarian, conducted the searches.