Ranking Member Davis Opening Statement As Prepared:
Thank you, Chair Lofgren. I'm glad we are holding a hearing on this important topic. The public has spoken, and the demand is clear: Americans want more certainty that their elected representatives are acting in good faith with their financial decisions. Today provides a unique opportunity to bring together experts from across the political spectrum to assess proposals on how best to move forward to increase transparency and accountability across Congress. I look forward to these discussions, and I am confident this hearing will serve to inform us as we move forward in the legislative process.
I'd like to begin by discussing some of the financial transparency measures already in place. The intent of the 2012 STOCK Act is good. It was meant to create a public disclosure system for members of Congress to report their trades in a timely manner. However, as we have witnessed on multiple occasions since its passage, the STOCK Act has deficiencies, and compliance with its requirements is not as straight-forward for members as it should be. We've given the STOCK Act 10 years, and it's time for Congress to take another look at this issue. According to Business Insider, at least 59 members have reportedly violated the requirements of the STOCK Act since 2019. These alleged violators come from both sides of the aisle, making this a bipartisan issue that requires a bipartisan response. Given the broad distribution of these alleged violations across the various ideological groups in the Congress, I'm confident that the majority—if not all—of them weren't malicious but inadvertent, illustrating a failure on multiple levels. This particularly concerns me because it suggests that we are not adequately educating our incoming members on their responsibilities to comply with the STOCK Act.
It is the responsibility of this committee to ensure members are aware of their responsibilities when they come to Congress, and I pledge to fix this lapse for new Republican members. I'd ask the Chair to join me in this initiative for any incoming members of her party. While the legislative fixes we discuss today are a critical step forward, I'd like to say also that this committee should hold further discussions on how best to educate and assist all Members, especially freshmen Members, with compliance issues and questions so that we can achieve the transparency the American people demand. The public—and our Members—deserve better from this Committee and as Ranking Member I will do everything I can to fix that. I'm sure the Chair will agree with this sentiment, and I welcome the opportunity to work together on this bipartisan issue.
Regarding potential STOCK Act updates, I am excited to hear from our witnesses today. Since this issue has captured the attention of the public, we have seen a wide range of proposals for reform. These suggestions are diverse, both in their proposed requirements and with their enforcement mechanisms to ensure compliance. Now, I don't really have many holdings other than retirement. But in anticipation of this hearing, I spoke with my financial advisor from my home district in Illinois to get a better sense of how some of these proposals would affect Members, especially middle-class Members. He raised the concern that blind trusts, for example, can be cumbersome and expensive, would create perverse incentives, and do not provide the level of transparency that some assume they would. For example, most financial firms won't even take on a client for a blind trust unless they meet certain asset holdings and activity requirements. I don't meet either of those requirements today, and I would guess that's true for many Members. But these cost restrictions would put us in a situation where these perverse incentives might force Members to engage more with the market in order to meet blind trust minimums and other requirements.
I hope we can address some of these concerns here today, because I'm sure many Members of Congress share them with me. I'm hopeful that the Majority will take this opportunity to work together to build a bipartisan solution instead of proceeding with a knee-jerk reaction that sends a one-party bill immediately to the Floor. I look forward to our expert witnesses' testimony and further discussion, and I hope we leave this hearing with a better understanding of the ramifications of any proposed solution as we embark on crafting legislation.
Thank you, and with that I yield back. | |
