Slaughter, Author of STOCK Act, Leads Call for Increased Transparency on Buying, Selling of Bitcoin
WASHINGTON — Congresswoman Louise Slaughter (NY-25) today called on the House Committee on Ethics to immediately issue formal guidance to clarify that members of Congress are required to report cryptocurrency assets, including the sale or purchase of cyrptocurrencies, in their financial disclosure forms under the STOCK Act. Slaughter wrote the STOCK Act, which guards against insider trading and conflicts of interest and instituted groundbreaking new disclosures that shine a light into the trading habits of public officials. The House Committee on Ethics currently provides informal guidance to inquiring members that they include cyrptocurrencies in their disclosures.
“The American people should have confidence that our rules and laws prohibit our officials from financially profiting from their position and the knowledge they may gain while in that position. Such confidence requires a formal standard that buying, selling, and profiting from cryptocurrencies should be, at the very least, reported,” said Slaughter.
Slaughter first introduced the STOCK Act in 2006. After her six year fight and a groundswell of public support following a 60 Minutes investigation, the legislation was passed and signed into law on April 4, 2012 by President Obama. She has also introduced the End Congressional Stock Market Abuse Act, which would prohibit members from taking part in foreign IPOs, purchasing stock at discounted prices, selling stock at higher than market value, or from participating in private placement stock offerings.
Records obtained under the STOCK Act recently led to the resignation of Brenda Fitzgerald, director of the Centers for Disease Control and Prevention (CDC). These records revealed a series of questionable investments made by Fitzgerald that posed serious conflicts of interest given her position leading the CDC.
Last year, Slaughter was the first member of Congress to call on the Securities and Exchange Commission (SEC) to conduct a complete investigation into questionable stock trades by former Health and Human Services Secretary Tom Price when he was a member of the House of Representatives. Filings required under the STOCK Act show that while serving in Congress, Price made hundreds of stock trades since those disclosures first became mandatory in 2012, including reported transactions involving stocks of 40 different companies in the health care sector. As former chairman of House Budget Committee and member of the House Ways and Means Subcommittee on Health, Sec. Price was privy to information not available to the public. Price resigned last September.
A copy of the letter is included below and available online here:
The Honorable Susan W. Brooks The Honorable Theodore E. Deutch
Chairwoman Ranking Member
House Committee on Ethics House Committee on Ethics
1015 Longworth House Office Building 1015 Longworth House Office Building
Washington, DC 20515 Washington, DC 20515
Dear Chairwoman Brooks and Ranking Member Deutch:
It is my understanding that the House Committee on Ethics dispenses informal guidance that Bitcoin and other cryptocurrency assets and transactions should be reported on annual financial disclosures and periodic transaction reports. Our reporting rules are designed to give the public confidence that members are not using their elected position for financial gain. To that end, the committee’s guidance on cryptocurrencies should be formalized as soon as possible to expressly require the reporting of cryptocurrency assets and transactions.
I first wrote the Stop Trading on Congressional Knowledge (STOCK) Act in 2006 in response to reports that individuals in congressional offices had abused the public trust. For six years I made the case that federal officials should be explicitly covered by insider trading rules before the STOCK Act was finally signed into law. In order to maintain the public trust and confidence, each member of Congress and certain employees have a duty to disclose their financial transactions.
This standard should not be any different for Bitcoin and other cryptocurrencies. Although a relatively new innovation, cryptocurrencies have been gaining popularity and in recent months, Bitcoin has enjoyed a meteoric rise in valuation. Under the current informal guidance, members and staff could buy and sell Bitcoin, make a tremendous profit, and not know they should be reporting these assets and transactions. Formal guidance that affirmatively requires disclosure would resolve this omission.
Additionally, the federal agencies are beginning to review how cryptocurrencies fit into government rules and regulations. As these decisions are made, Congress may undoubtedly become aware of these determinations before the general public. Members and staff should not be allowed to profit from knowledge of these decisions and at the same time evade the financial transparency that would bring these actions to light.
The American people should have confidence that our rules and laws prohibit our officials from financially profiting from their position and the knowledge they may gain while in that position. Such confidence requires a formal standard that buying, selling, and profiting from cryptocurrencies should be, at the very least, reported. I would appreciate hearing from the committee about any actions it is taking regarding cryptocurrencies and the expected timeline for future actions or decisions.
Thank you for your work and attention to this request.
Louise M. Slaughter
Member of Congress