Photo: Tom Williams/CQ-Roll Call/Getty Images
Once upon a time back in 1996, the Center for Public Integrity published a startling exposé, “Fat Cat Hotel,” that named dozens of big-money Democratic donors who had spent the night at the White House in exchange for writing big checks to the party and/or the campaign and legal-defense funds of then-President Bill Clinton.
It was considered scandalous, and Clinton felt compelled to issue denials to reporters. “I did not have any strangers here. The Lincoln Bedroom was never sold,” the president said. But Clinton’s denials were undercut by a napkin that included the handwritten phrase “Ready to start overnights right away” alongside his scribbled instructions telling an aide to “get other names of the 100,000 or more,” a clear reference to six-figure donors.
A generation later, President Donald Trump has dispensed with the formalities and appears to be openly selling access to the White House in exchange for cash that goes not to campaign accounts but more or less directly into Trump’s pocket. Nearly 80 percent of $TRUMP, a digital “collectible” that has no intrinsic value, is owned by the Trump Organization and its affiliates and currently trades at a price that makes it worth around $2.7 billion. Its website says the 220 top purchasers of the unregulated meme coin will get an “intimate private dinner” with Trump at one of his private golf clubs; an earlier version of the offer, which later vanished from the website, promised an additional VIP tour of the White House for the top-25 purchasers. The scramble to buy $TRUMP made the price pop 54 percent overnight.
Democrats, predictably, are outraged. “The Trump coin scam is the most brazenly corrupt thing a President has ever done. Not close,” Senator Chris Murphy said in a social-media post. Senator Adam Schiff agreed: “First, Donald Trump launches a memecoin, netting himself billions. Next, his family gets in on the scheme,” he wrote. “Now his billionaire buddies are getting even richer too. The most brazen corruption imaginable.”
Public Citizen has filed an ethics complaint with the Justice Department against Trump’s meme-coin hustle. But real reform will require members of Congress, and the voters who elect them, to raise the ethical bar in Washington. And that starts with banning the odious, indefensible practice of allowing members of Congress to buy and sell securities based on confidential and classified information they receive as part of their government duties.
An ugly example played out on April 9 when Trump announced a pause in tariffs on most countries, sparking a Wall Street rally that saw the Dow Jones Industrial Average jump nearly 8 percent and the NASDAQ index move 12 percent higher, its best one-day performance in 24 years. Representative Marjorie Taylor Greene, a Republican from Georgia, disclosed that she had purchased thousands of dollars in stock ahead of the president’s pause on tariffs, a move that potentially made her a fortune.
“We saw Marjorie Taylor Greene buy that dip,” Representative Alexandria Ocasio-Cortez said at a rally. “I got one question for her: How much did you make? How much did you make off of people’s despair? How much did you make off that panic? How much did you make off of that suffering? No more. We can’t accept it.”
But Democrats have not only accepted insider trading — many prominent Dems are enthusiastic participants. Last year, the husband of Nancy Pelosi sold $500,000 worth of stock in the credit-card company Visa right before the Justice Department announced an antitrust lawsuit against the company, thereby avoiding what would have been a big financial loss.
Not only is it legal for members of Congress to trade stock based on privileged information about pending government action, but it’s done so frequently that a cottage industry of Wall Street firms — and two exchange-traded funds — follows, summarizes, and promotes the trading activity of Pelosi and other lawmakers so that other investors can try to match their gains.
“If you have members of Congress who are having these returns that are far greater than what is expected, it is only common sense for the American public to question what’s going on,” Kedric Payne, the vice-president and senior director of ethics at the Campaign Legal Center, a Washington-based watchdog group, told me. “There is a perception that insider trading is going on, and even if you don’t know whether or not that’s happening, the mere appearance of it happening diminishes public trust in government.”
We saw the need for reform five years ago, when, early on during the pandemic, members of Congress who got confidential briefings about the nature and probable impact of the disaster promptly went out and protected their private holdings, snapping up stock in companies like Zoom that enable remote work and medical-device companies that manufacture ventilators; at the same time, they sold off their holdings in restaurants, hotels, and other hospitality and entertainment companies. Republican senator Richard Burr dumped between $628,000 and $1.72 million of stock holdings on February 13, about a week before the market began to tank as the dimensions of the pandemic became known. (Burr has since left office.)
Congress tried to close this loophole years ago with the passage of the STOCK Act of 2012, which requires after-the-fact disclosure of trades of more than $1,000. Payne said tougher laws are needed. “Clearly what we need is a ban on congressional stock trading, because if you simply disclose what is happening, you just are basically showing what the problem is without addressing that problem,” he said. Proposed legislation would bar members from owning stock in individual companies and confine them to owning mutual funds or exchange-traded funds that focus on a broad slice of companies.
“The good news is that there was bipartisan legislation that got very far in the Senate last year. And the hope is that this year, with the public attention on what is happening with stock trading now, that legislation would be revived and we will get some movement,” Payne told me. “But it really just comes down to the fact that the public has to just exercise their voice and let their members of Congress know that they do not want this type of activity going on.”
