The latest evidence of a double standard emanating from the halls of Congress splashed across the headlines last week.
When Defense Department officials, who require Senate confirmation, are appointed to their posts, they are barred from owning stocks and bonds from nearly 50,000 companies that work as contractors for DoD.
The thinking goes that these officials would have insider knowledge, which might ethically entangle them.
But, it turns out that senators, who sit on the armed services committee and are often privy to the exact same kind of insider knowledge, are not barred from owning stocks or bonds.
Of the 28 senators who sit on the armed services committee, 19 held assets in DoD contractor companies, according to a Washington Post analysis of financial disclosure forms. The holdings were worth a total of $3.8 million to $10.2 million.
Apparently, current ethics laws do not prohibit lawmakers from holding stock in companies they oversee or regulate, which has some crying foul.
“I think Congress should live by the rules they impose on other people,” said Gordon R. England, who served as deputy defense in the Bush administration and who willingly gave up his stock portfolio and $1 million in profits to work at DoD. “I am frankly surprised they are allowed to have these investments. Every member of this committee has tremendous influence over every major contract at the Pentagon.”
But, some congressional experts told The Post if senators were barred from holding stock in particular companies, it could deter “good candidates” from running for office, or even lead to them being “out of touch” on financial issues.
Then, they say, there is always the electoral solution: If lawmakers are guilty of shady business deals, voters could simply throw the bums out.
The current kerfuffle over stock options is not the first time Congress has been called to task for its potential insider trading.
Some see the solution for potential insider trading inside the beltway in a bill, the “Stop Trading on Congressional Knowledge Act, first introduced in 2006 by Congressman Brian Baird (D-WA).