Us Congress 2023-2024 Regular Session

Us Congress House Bill HB389

Introduced
1/17/23  

Caption

Preventing Opportunistic Returns on Trades and Futures by Officials, Leadership, and Individuals in Office Act or the PORTFOLIO Act This bill generally prohibits federal employees and officials from owning or trading in synthetic assets (i.e., tokenized derivatives). It also establishes financial disclosure requirements with respect to cryptocurrency. Specifically, the bill prohibits federal employees, Members of Congress, the President, and Vice President from owning or trading investments in a security, a commodity, a future, cryptocurrency, or any comparable economic interest acquired through synthetic means, such as through a derivative. Such investments must be divested through gift or donation, cashing out, or a qualified blind trust. The appropriate ethics office may grant temporary exemptions in certain situations, such as for preexisting complex financial arrangements from which investments cannot be withdrawn, and may assess fees for violations. The Department of Justice may also bring civil actions for violations. The bill also (1) incorporates cryptocurrency and other digital assets into current financial disclosure requirements; (2) modifies the categories and timelines for financial disclosures; and (3) requires agencies, ethics offices, and the Department of Justice to regularly report on violations of this bill and other related requirements.

Impact

The BILL stipulates that the Department of Justice holds the authority to take civil actions against those who violate the investment restrictions. Additionally, it imposes stricter financial disclosure requirements for federal employees, which now include cryptocurrency and other digital assets. The legislation modifies existing timelines and categories for financial disclosures significantly, mandating regular reporting of adherence to these newly established investment restrictions. The ethical compliance and update mandates aim to close loopholes and fortify accountability, ensuring adherence within the ranks of federal employees.

Summary

House Bill 389, also known as the Preventing Opportunistic Returns on Trades and Futures by Officials, Leadership, and Individuals in Office Act or PORTFOLIO Act, aims to enhance ethical standards for federal employees by restricting their trading and ownership of certain investments. The bill seeks to address conflicts of interest and enhance public trust in government by banning federal officials, including members of Congress, the President, and the Vice President, from owning or trading investments in a range of covered assets such as securities, commodities, futures, or cryptocurrencies acquired through synthetic means. Individuals who fall under these restrictions must divest their investments through specified means such as gifting, cashing out, or by placing assets in a blind trust.

Contention

Although the bill seeks to fortify ethical guidelines, it has sparked debates regarding the feasibility of compliance and the administrative burden it places on federal employees. Critics raise concerns over the potential hindrance to personal financial management for federal employees, particularly those with pre-existing complex financial arrangements. Discussions also highlight the challenge of adequately enforcing compliance without infringing on personal freedoms. An emphasis has been placed on the distinctions between ordinary investment practices and unethical conduct, as the bill seeks to delineate clear boundaries while holding federal officials accountable.

Companion Bills

No companion bills found.

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