IPO Act

I 116TH CONGRESS 2D SESSION H. R. 6461 To prohibit senior Government officials, including Members of Congress, from purchasing or selling certain investments, and for other purposes. IN THE HOUSE OF REPRESENTATIVES APRIL 7, 2020 Ms. GABBARD introduced the following bill; which was referred to the Com- mittee on Financial Services, and in addition to the Committees on Agri- culture, Oversight and Reform, House Administration, and the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To prohibit senior Government officials, including Members of Congress, from purchasing or selling certain invest- ments, and for other purposes. 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 ‘‘Integrity for Public 4 Officials Act’’ or the ‘‘IPO Act’’. 5 SEC. 2. DEFINITIONS. 6 In this Act— 7 VerDate Sep 11 2014 00:08 Apr 17, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6461.IH H6461 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 6461 IH (1) the term ‘‘commodity’’ has the meaning 1 given the term in section 1a of the Commodity Ex- 2 change Act (7 U.S.C. 1a); 3 (2) the term ‘‘covered investment’’— 4 (A) means investment in a security, a com- 5 modity, or a future, or any comparable eco- 6 nomic interest acquired through synthetic 7 means such as the use of a derivative; and 8 (B) does not include— 9 (i) a widely held investment fund de- 10 scribed in section 102(f)(8) of the Ethics 11 in Government Act of 1978 (5 U.S.C. 12 App.); or 13 (ii) a United States Treasury bill, 14 note, or bond; 15 (3) the term ‘‘covered person’’ means— 16 (A) any individual described in section 17 101(f) of the Ethics in Government Act of 1978 18 (5 U.S.C. App.), including— 19 (i) any individual in a position on any 20 level of the Executive Schedule under sub- 21 chapter II of chapter 53 of title 5, United 22 States Code; 23 VerDate Sep 11 2014 00:08 Apr 17, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6461.IH H6461 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 6461 IH (ii) a political appointee in the Execu- 1 tive Office of President or in the Office of 2 the Vice President; and 3 (iii) an individual employed in a posi- 4 tion in the executive branch of the Govern- 5 ment of a confidential or policy-deter- 6 mining character under schedule C of sub- 7 part C of part 213 of title 5, Code of Fed- 8 eral Regulations; 9 (B) an individual employed in a position in 10 the Senior Executive Service; 11 (C) an individual employed in a position at 12 the GS–14 level or higher; 13 (D) an individual employed in a position 14 not under the General Schedule for which the 15 rate of basic pay is equal to or greater than the 16 minimum rate of basic pay payable for GS–14 17 of the General Schedule; and 18 (E) the spouse of any Member of Congress 19 (as that term is defined in section 109(12) of 20 the Ethics in Government Act of 1978 (5 21 U.S.C. App.)); 22 (4) the term ‘‘future’’ means a financial con- 23 tract obligating the buyer to purchase an asset or 24 the seller to sell an asset, such as a physical com- 25 VerDate Sep 11 2014 00:08 Apr 17, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6461.IH H6461 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 6461 IH modity or a financial instrument, at a predetermined 1 future date and price; and 2 (5) the term ‘‘security’’ has the meaning given 3 the term in section 3(a) of the Securities Exchange 4 Act of 1934 (15 U.S.C. 78c(a)). 5 SEC. 3. PROHIBITIONS. 6 (a) TRANSACTIONS.—Except as provided in sections 7 4 and 5, no covered person may— 8 (1) purchase or sell any covered investment; or 9 (2) enter into a transaction that creates a net 10 short position in any security. 11 (b) POSITIONS.—A covered person may not serve as 12 an officer or member of any board of any for-profit asso- 13 ciation, corporation, or other entity. 14 SEC. 4. EXCEPTIONS. 15 (a) INVESTMENTS HELD BEFORE TAKING OF- 16 FICE.— 17 (1) IN GENERAL.—A covered person may have 18 control over or knowledge of the management of any 19 covered investment held by the covered person as of 20 the day before the date on which the covered person 21 took office (or in the case of a spouse described in 22 section 2(3)(E), the date the applicable Member of 23 Congress took office). 24 VerDate Sep 11 2014 00:08 Apr 17, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6461.IH H6461 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 6461 IH (2) PROHIBITION ON PURCHASING OR SELL- 1 ING.—A covered person may not buy or sell any in- 2 vestment described in paragraph (1) except in the 3 case of— 4 (A) placing the investment in a qualified 5 blind trust described in section 5; or 6 (B) divesting themselves of any investment 7 under subsection (b). 8 (b) DIVESTITURE.—A covered person may sell a cov- 9 ered investment during the 6-month period beginning 10 on— 11 (1) the date on which the covered person takes 12 office (or in the case of a spouse described in section 13 2(3)(E), the date the applicable Member of Congress 14 took office); or 15 (2) the date of enactment of this Act. 16 SEC. 5. TRUSTS FOR LEGISLATIVE BRANCH OF GOVERN- 17 MENT. 18 (a) IN GENERAL.—Consistent with section 7, on a 19 case-by-case basis, the Select Committee on Ethics may 20 authorize a covered person to place their securities hold- 21 ings in a qualified blind trust approved by the committee 22 under section 102(f) of the Ethics in Government Act of 23 1978 (5 U.S.C. App.). 24 VerDate Sep 11 2014 00:08 Apr 17, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6461.IH H6461 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 6461 IH (b) BLIND TRUST.—Consistent with section 7, a 1 blind trust permitted under this section shall meet the cri- 2 teria in section 102(f)(4)(B) of the Ethics in Government 3 Act of 1978 (5 U.S.C. App.), unless an alternative ar- 4 rangement is approved by the Select Committee on Ethics. 5 SEC. 6. ADMINISTRATION FOR LEGISLATIVE BRANCH OF 6 GOVERNMENT. 7 (a) IN GENERAL.—Consistent with section 7, the pro- 8 visions of this Act shall be administered by the Select 9 Committee on Ethics of the Senate and the Committee 10 on Ethics of the House of Representatives. 11 (b) GUIDANCE.—Consistent with section 7, the Select 12 Committee on Ethics of the Senate and the Committee 13 on Ethics of the House of Representatives are authorized 14 to issue guidance on any matter contained in this Act, in- 15 cluding— 16 (1) whether a covered person or spouse of a 17 covered person may hold an employee stock option, 18 or similar instrument, that had not vested before the 19 date on which the covered person was elected; and 20 (2) the process and timeline for when a covered 21 person or spouse of a covered person shall no longer 22 serve as an officer or member of any board of any 23 for-profit association, corporation, or other entity. 24 VerDate Sep 11 2014 00:08 Apr 17, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H6461.IH H6461 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 6461 IH SEC. 7. ADMINISTRATION FOR EXECUTIVE AND JUDICIAL 1 BRANCHES OF GOVERNMENT. 2 With respect to— 3 (1) a covered person who is an officer or em- 4 ployee of the executive branch of the Government, 5 the Director of the Office of Government Ethics 6 shall carry out sections 5 and 6; and 7 (2) a covered person who is an officer or em- 8 ployee of the judicial branch of the Government, the 9 Judicial Conference shall carry out such sections. 10 SEC. 8. ENFORCEMENT. 11 Whoever knowingly fails to comply with this Act shall 12 be subject to a civil penalty of not less than 10 percent 13 of the value of the covered investment that was purchased 14 or sold or the security in which a net short position was 15 created in violation of this Act, as applicable. 16 Æ VerDate Sep 11 2014 00:08 Apr 17, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\H6461.IH H6461 kjohnson on DSK79L0C42PROD with BILLS