What This Bill Does
This bill stops members of Congress and their spouses from buying, selling or holding certain types of investments while the member serves in Congress. The bill creates rules to enforce this ban and requires members to report that they follow the rules each year.
Who It Affects
Members of the Senate and House of Representatives and their spouses.
Key Provisions
• Members of Congress and their spouses cannot hold, buy or sell stocks, bonds, commodity futures (agreements to buy or sell raw materials at set prices), or similar investments during their time in Congress (Sec. 2, § 13162(a))
• Members have 180 days after the law passes to sell any covered investments they already own, or 180 days after they first take office if they are newly elected (Sec. 2, § 13162(b)(1))
• Members must submit a written statement each year confirming they follow the rules, and these statements are published on a public website (Sec. 2, § 13163)
• Members who break the rules must return any profits to the U.S. Treasury and may be fined by the Senate Ethics Committee or House Ethics Committee (Sec. 2, § 13162(c))
• A member can appeal a fine by requesting a vote in their chamber of Congress (Sec. 2, § 13164(b)(3))
What Changes
If this law passes, members of Congress would be prohibited from owning most individual stocks, bonds and commodities. They could still own diversified mutual funds (investments that spread money across many companies), diversified exchange-traded funds (similar to mutual funds), or U.S. Treasury bills and bonds. Members would have six months to sell any prohibited investments they currently own.
Important Definitions
• "Covered financial instrument" means stocks, security futures (contracts for future stock purchases), commodities (raw materials), or similar investments created through derivatives (complex financial contracts) like options and warrants (Sec. 2, § 13161(1)(A))
• Covered financial instruments do NOT include diversified mutual funds, diversified exchange-traded funds, U.S. Treasury bills/notes/bonds, or spouse income from their job (Sec. 2, § 13161(1)(B))
• "Qualified blind trust" means a trust that meets the definition in another section (Sec. 2, § 13161(3))
Effective Date
Not specified in bill text
II
118TH CONGRESS
1ST SESSION
S. 439
To amend chapter 131 of title 5, United States Code, to prohibit transactions
involving certain financial instruments by Members of Congress.
IN THE SENATE OF THE UNITED STATES
FEBRUARY 15, 2023
Mr. HAWLEY introduced the following bill; which was read twice and referred
to the Committee on Homeland Security and Governmental Affairs
A BILL
To amend chapter 131 of title 5, United States Code, to
prohibit transactions involving certain financial instru-
ments by Members of Congress.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Preventing Elected
4
Leaders from Owning Securities and Investments
5
(PELOSI) Act’’.
6
SEC. 2. BANNING INSIDER TRADING IN CONGRESS.
7
(a) IN GENERAL.—Chapter 131 of title 5, United
8
States Code, is amended by adding at the end the fol-
9
lowing:
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•S 439 IS
‘‘Subchapter IV—Banning Insider Trading in
1
Congress
2
‘‘§ 13161. Definitions
3
‘‘In this subchapter:
4
‘‘(1) COVERED FINANCIAL INSTRUMENT.—
5
‘‘(A) IN GENERAL.—The term ‘covered fi-
6
nancial instrument’ means—
7
‘‘(i) any investment in—
8
‘‘(I) a security (as defined in sec-
9
tion 3(a) of Securities Exchange Act
10
of 1934 (15 U.S.C. 78c(a)));
11
‘‘(II) a security future (as de-
12
fined in that section); or
13
‘‘(III) a commodity (as defined in
14
section 1a of the Commodity Ex-
15
change Act (7 U.S.C. 1a)); and
16
‘‘(ii) any economic interest com-
17
parable to an interest described in clause
18
(i) that is acquired through synthetic
19
means, such as the use of a derivative, in-
20
cluding an option, warrant, or other simi-
21
lar means.
22
‘‘(B) EXCLUSIONS.—The term ‘covered fi-
23
nancial instrument’ does not include—
24
‘‘(i) a diversified mutual fund;
25
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•S 439 IS
‘‘(ii) a diversified exchange-traded
1
fund;
2
‘‘(iii) a United States Treasury bill,
3
note, or bond; or
4
‘‘(iv) compensation from the primary
5
occupation of a spouse or dependent of a
6
Member of Congress.
7
‘‘(2) MEMBER OF CONGRESS.—The term ‘Mem-
8
ber of Congress’ has the meaning given the term in
9
section 13101.
10
‘‘(3) QUALIFIED
BLIND
TRUST.—The term
11
‘qualified blind trust’ has the meaning given the
12
term in section 13104(f).
13
‘‘(4) SUPERVISING
ETHICS
COMMITTEE.—The
14
term ‘supervising ethics committee’ means, as appli-
15
cable—
16
‘‘(A) the Select Committee on Ethics of
17
the Senate; and
18
‘‘(B) the Committee on Ethics of the
19
House of Representatives.
20
‘‘§ 13162. Prohibition on certain transactions and
21
holdings involving covered financial in-
22
struments
23
‘‘(a) PROHIBITION.—Except as provided in sub-
24
section (b), a Member of Congress, or any spouse of a
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•S 439 IS
Member of Congress, may not, during the term of service
1
of the Member of Congress, hold, purchase, or sell any
2
covered financial instrument.
3
‘‘(b) EXCEPTIONS.—The prohibition under sub-
4
section (a) shall not apply to—
5
‘‘(1) a sale by a Member of Congress, or a
6
spouse of a Member of Congress, that is completed
7
by the date that is—
8
‘‘(A) for a Member of Congress serving on
9
the date of enactment of the Preventing Elected
10
Leaders from Owning Securities and Invest-
11
ments (PELOSI) Act, 180 days after that date
12
of enactment; and
13
‘‘(B) for any Member of Congress who
14
commences service as a Member of Congress
15
after the date of enactment of the Preventing
16
Elected Leaders from Owning Securities and
17
Investments (PELOSI) Act, 180 days after the
18
first date of the initial term of service; or
19
‘‘(2) a covered financial instrument held in a
20
qualified blind trust operated on behalf of, or for the
21
benefit of, the Member of Congress or spouse of the
22
Member of Congress.
23
‘‘(c) PENALTIES.—
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‘‘(1) DISGORGEMENT.—A Member of Congress
1
shall disgorge to the Treasury of the United States
2
any profit from a transaction or holding involving a
3
covered financial instrument that is conducted in
4
violation of this section.
5
‘‘(2) FINES.—A Member of Congress who holds
6
or conducts a transaction involving, or whose spouse
7
holds or conducts a transaction involving, a covered
8
financial instrument in violation of this section may
9
be subject to a civil fine assessed by the supervising
10
ethics committee under section 13164.
11
‘‘§ 13163. Certification of compliance
12
‘‘(a) IN GENERAL.—Not less frequently than annu-
13
ally, each Member of Congress shall submit to the applica-
14
ble supervising ethics committee a written certification
15
that the Member of Congress has achieved compliance
16
with the requirements of this subchapter.
17
‘‘(b) PUBLICATION.—The supervising ethics commit-
18
tees shall publish each certification submitted under sub-
19
section (a) on a publicly available website.
20
‘‘§ 13164. Authority of supervising ethics committees
21
‘‘(a) IN GENERAL.—The supervising ethics commit-
22
tees may implement and enforce the requirements of this
23
subchapter, including by—
24
‘‘(1) issuing—
25
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‘‘(A) for Members of Congress—
1
‘‘(i) rules governing that implementa-
2
tion; and
3
‘‘(ii) 1 or more reasonable extensions
4
to achieve compliance with this subchapter,
5
if the supervising ethics committee deter-
6
mines that a Member of Congress is mak-
7
ing a good faith effort to divest any cov-
8
ered financial instruments; and
9
‘‘(B) guidance relating to covered financial
10
instruments;
11
‘‘(2) publishing on the internet certifications
12
submitted by Members of Congress under section
13
13163(a); and
14
‘‘(3) assessing civil fines against any Member of
15
Congress who is in violation of this subchapter, sub-
16
ject to subsection (b).
17
‘‘(b) REQUIREMENTS FOR CIVIL FINES.—
18
‘‘(1) IN GENERAL.—Before imposing a fine pur-
19
suant to this section, a supervising ethics committee
20
shall provide to the applicable Member of Con-
21
gress—
22
‘‘(A) a written notice describing each cov-
23
ered financial instrument transaction for which
24
a fine will be assessed; and
25
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‘‘(B) an opportunity, with respect to each
1
such covered financial instrument transaction—
2
‘‘(i) for a hearing; and
3
‘‘(ii) to achieve compliance with the
4
requirements of this subchapter.
5
‘‘(2) PUBLICATION.—Each supervising ethics
6
committee shall publish on a publicly available
7
website a description of—
8
‘‘(A) each fine assessed by the supervising
9
ethics committee pursuant to this section;
10
‘‘(B) the reasons why each such fine was
11
assessed; and
12
‘‘(C) the result of each assessment, includ-
13
ing any hearing under paragraph (1)(B)(i) re-
14
lating to the assessment.
15
‘‘(3) APPEAL.—A Member of Congress may ap-
16
peal the assessment of a fine under this section to
17
a vote on the floor of the Senate or the House of
18
Representatives, as applicable, as a privileged mo-
19
tion.
20
‘‘§ 13165. Audit by Government Accountability Office
21
‘‘Not later than 2 years after the date of enactment
22
of the Preventing Elected Leaders from Owning Securities
23
and Investments (PELOSI) Act, the Comptroller General
24
of the United States shall—
25
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•S 439 IS
‘‘(1) conduct an audit of the compliance by
1
Members of Congress with the requirements of this
2
subchapter; and
3
‘‘(2) submit to the supervising ethics commit-
4
tees a report describing the results of the audit con-
5
ducted under paragraph (1).’’.
6
(b) CONFORMING AMENDMENTS.—
7
(1) Section 13103(f) of title 5, United States
8
Code, is amended—
9
(A) in paragraph (9), by striking ‘‘as de-
10
fined in section 13101 of this title’’;
11
(B) in paragraph (10), by striking ‘‘as de-
12
fined in section 13101 of this title’’;
13
(C) in paragraph (11), by striking ‘‘as de-
14
fined in section 13101 of this title’’; and
15
(D) in paragraph (12), by striking ‘‘as de-
16
fined in section 13101 of this title’’.
17
(2) Section 3(4)(D) of the Lobbying Disclosure
18
Act of 1995 (2 U.S.C. 1602(4)(D)) is amended by
19
striking ‘‘legislative branch employee serving in a po-
20
sition described under section 13101(13) of title 5,
21
United States Code’’ and inserting ‘‘officer or em-
22
ployee of Congress (as defined in section 13101 of
23
title 5, United States Code)’’.
24
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•S 439 IS
(3) The table of sections for chapter 131 of title
1
5, United States Code, is amended by adding at the
2
end the following:
3
‘‘SUBCHAPTER IV—BANNING INSIDER TRADING IN CONGRESS
‘‘13161. Definitions.
‘‘13162. Prohibition on certain transactions and holdings involving covered fi-
nancial instruments.
‘‘13163. Certification of compliance.
‘‘13164. Authority of supervising ethics committees.
‘‘13165. Audit by Government Accountability Office.’’.
Æ
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