New Jersey Democratic Rep. Josh Gottheimer is one of the latest members of the House of Representatives to violate the Stop Trading on Congressional Knowledge Act of 2012 —known as the STOCK Act.
President Barack Obama signed the STOCK Act into law a decade ago with the intent to increase transparency and curb personal financial conflicts of interest.
Four Democratic members of Congress—Gottheimer, along with Reps. Mary Gay Scanlon, Susie Lee, and Brad Schneider—broke a federal conflict-of-interest and transparency law when they disclosed financial trades late, according to a report in Business Insider, which broke stories detailing how dozens of federal lawmakers and at least 182 top congressional staffers were violating the STOCK Act.
That report showed that others were failing to avoid clashes between their personal finances and public duties.
Thirteen lawmakers violated the law by failing to properly disclose financial trades to a significant degree. Rep. Tom Malinowski was among that group.
While the law allows members of Congress to trade individual stocks, Insider’s “Conflicted Congress” investigation found that more than 1 in 10 lawmakers have recently violated the STOCK Act’s disclosure provisions, which requires members of Congress to publicly report their trades shortly after making them.
The Insider investigation also exposed numerous conflicts of interest and instances where members of Congress’ financial investments ran afoul of their policy positions.
The law requires members of Congress to report stock and other financial trades for themselves and their spouses within 45 days of making them or face financial penalties.
Gottheimer was identified as the most “bipartisan Democrat” in the House, meaning that he works more closely with Republicans than any other, and he was known as former President Donald Trump’s favorite Democrat.
Gottheimer and his wife exchanged up to $15,000 of stock in Independent Bank Corp. in November 2021, but failed to disclose the stock trade until August 13, 2022, when he filed a financial disclosure that reported it..
Gottheimer’s spokesperson Chris D’Aloia said, “No shares were bought or sold here. It was just an exchange” but he did not explain why the transaction was made or how come the office was not notified when it happened.
D’Aloia said that before taking office, Gottheimer “turned over management of his retirement savings and investments to a third party, who has full investment discretion.”
In February, Gottheimer said he would establish a blind trust for his assets but he has not done that yet.
Gottheimer represents New Jersey’s 5th congressional district, which includes a swath of suburban areas in Bergen and Passaic counties and rural territory in Sussex and Warren counties.
“It shows that when an idea is right that we can still accomplish something on behalf of the American people and to make our government and our country stronger,” said Obama as he signed the bill into law.
The law created new financial disclosure requirements and enforcement rules for members of Congress, their immediate families, and staff who decide to trade stocks. It clarified that insider trading was illegal on Capitol Hill. It defined how members of Congress could personally invest their money — and could not.
Representatives Pramila Jayapal (WA-07) and Matt Rosendale (MT-AL) and Senators Elizabeth Warren (D-MA) Steve Daines (R-MT) Marsha Blackburn (R-TN) and Debbie Stabenow (D-MN) introduced bipartisan legislation to ban members of Congress and their spouses from owning and trading stocks.
“Members of Congress were elected to serve the people, not their personal financial interests. But as long as members and spouses are allowed to hold and trade stocks, we keep the door open to corruption—and that cannot stand.,” said Jayapal.
“No one should ever have to wonder whether their member of Congress is working for the public interest or their own financial interest. I’ve fought for years to root out corruption in Washington, and to ban federal officials from owning and trading individual stocks,” said Warren.
“Congress is here to serve, not be served. The American people should have faith in that fact,” said Daines. “Members shouldn’t be able to make legislative decisions or use their platform and influence to benefit themselves personally, which is why it should be no question that owning and trading stocks should be banned.”
“Washington has lost the trust of the American people. Allowing members of Congress to trade individual stocks can create the perception of corruption and a conflict of interest,” said Blackburn.
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