II
118THCONGRESS
1
STSESSION S. 439
To amend chapter 131 of title 5, United States Code, to prohibit transactions
involving certain financial instruments by Members of Congress.
IN THE SENATE OF THE UNITED STATES
FEBRUARY15, 2023
Mr. H
AWLEYintroduced the following bill; which was read twice and referred
to the Committee on Homeland Security and Governmental Affairs
A BILL
To amend chapter 131 of title 5, United States Code, to
prohibit transactions involving certain financial instru-
ments by Members of Congress.
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 ‘‘Preventing Elected 4
Leaders from Owning Securities and Investments 5
(PELOSI) Act’’. 6
SEC. 2. BANNING INSIDER TRADING IN CONGRESS. 7
(a) I
NGENERAL.—Chapter 131 of title 5, United 8
States Code, is amended by adding at the end the fol-9
lowing: 10
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‘‘Subchapter IV—Banning Insider Trading in 1
Congress 2
‘‘§ 13161. Definitions 3
‘‘In this subchapter: 4
‘‘(1) C
OVERED FINANCIAL INSTRUMENT .— 5
‘‘(A) I
N GENERAL.—The term ‘covered fi-6
nancial instrument’ means— 7
‘‘(i) any investment in— 8
‘‘(I) a security (as defined in sec-9
tion 3(a) of Securities Exchange Act 10
of 1934 (15 U.S.C. 78c(a))); 11
‘‘(II) a security future (as de-12
fined in that section); or 13
‘‘(III) a commodity (as defined in 14
section 1a of the Commodity Ex-15
change Act (7 U.S.C. 1a)); and 16
‘‘(ii) any economic interest com-17
parable to an interest described in clause 18
(i) that is acquired through synthetic 19
means, such as the use of a derivative, in-20
cluding an option, warrant, or other simi-21
lar means. 22
‘‘(B) E
XCLUSIONS.—The term ‘covered fi-23
nancial instrument’ does not include— 24
‘‘(i) a diversified mutual fund; 25
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‘‘(ii) a diversified exchange-traded 1
fund; 2
‘‘(iii) a United States Treasury bill, 3
note, or bond; or 4
‘‘(iv) compensation from the primary 5
occupation of a spouse or dependent of a 6
Member of Congress. 7
‘‘(2) M
EMBER OF CONGRESS .—The term ‘Mem-8
ber of Congress’ has the meaning given the term in 9
section 13101. 10
‘‘(3) Q
UALIFIED BLIND TRUST .—The term 11
‘qualified blind trust’ has the meaning given the 12
term in section 13104(f). 13
‘‘(4) S
UPERVISING ETHICS COMMITTEE .—The 14
term ‘supervising ethics committee’ means, as appli-15
cable— 16
‘‘(A) the Select Committee on Ethics of 17
the Senate; and 18
‘‘(B) the Committee on Ethics of the 19
House of Representatives. 20
‘‘§ 13162. Prohibition on certain transactions and 21
holdings involving covered financial in-22
struments 23
‘‘(a) P
ROHIBITION.—Except as provided in sub-24
section (b), a Member of Congress, or any spouse of a 25
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Member of Congress, may not, during the term of service 1
of the Member of Congress, hold, purchase, or sell any 2
covered financial instrument. 3
‘‘(b) E
XCEPTIONS.—The prohibition under sub-4
section (a) shall not apply to— 5
‘‘(1) a sale by a Member of Congress, or a 6
spouse of a Member of Congress, that is completed 7
by the date that is— 8
‘‘(A) for a Member of Congress serving on 9
the date of enactment of the Preventing Elected 10
Leaders from Owning Securities and Invest-11
ments (PELOSI) Act, 180 days after that date 12
of enactment; and 13
‘‘(B) for any Member of Congress who 14
commences service as a Member of Congress 15
after the date of enactment of the Preventing 16
Elected Leaders from Owning Securities and 17
Investments (PELOSI) Act, 180 days after the 18
first date of the initial term of service; or 19
‘‘(2) a covered financial instrument held in a 20
qualified blind trust operated on behalf of, or for the 21
benefit of, the Member of Congress or spouse of the 22
Member of Congress. 23
‘‘(c) P
ENALTIES.— 24
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‘‘(1) DISGORGEMENT.—A Member of Congress 1
shall disgorge to the Treasury of the United States 2
any profit from a transaction or holding involving a 3
covered financial instrument that is conducted in 4
violation of this section. 5
‘‘(2) F
INES.—A Member of Congress who holds 6
or conducts a transaction involving, or whose spouse 7
holds or conducts a transaction involving, a covered 8
financial instrument in violation of this section may 9
be subject to a civil fine assessed by the supervising 10
ethics committee under section 13164. 11
‘‘§ 13163. Certification of compliance 12
‘‘(a) I
NGENERAL.—Not less frequently than annu-13
ally, each Member of Congress shall submit to the applica-14
ble supervising ethics committee a written certification 15
that the Member of Congress has achieved compliance 16
with the requirements of this subchapter. 17
‘‘(b) P
UBLICATION.—The supervising ethics commit-18
tees shall publish each certification submitted under sub-19
section (a) on a publicly available website. 20
‘‘§ 13164. Authority of supervising ethics committees 21
‘‘(a) I
NGENERAL.—The supervising ethics commit-22
tees may implement and enforce the requirements of this 23
subchapter, including by— 24
‘‘(1) issuing— 25
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‘‘(A) for Members of Congress— 1
‘‘(i) rules governing that implementa-2
tion; and 3
‘‘(ii) 1 or more reasonable extensions 4
to achieve compliance with this subchapter, 5
if the supervising ethics committee deter-6
mines that a Member of Congress is mak-7
ing a good faith effort to divest any cov-8
ered financial instruments; and 9
‘‘(B) guidance relating to covered financial 10
instruments; 11
‘‘(2) publishing on the internet certifications 12
submitted by Members of Congress under section 13
13163(a); and 14
‘‘(3) assessing civil fines against any Member of 15
Congress who is in violation of this subchapter, sub-16
ject to subsection (b). 17
‘‘(b) R
EQUIREMENTS FOR CIVILFINES.— 18
‘‘(1) I
N GENERAL.—Before imposing a fine pur-19
suant to this section, a supervising ethics committee 20
shall provide to the applicable Member of Con-21
gress— 22
‘‘(A) a written notice describing each cov-23
ered financial instrument transaction for which 24
a fine will be assessed; and 25
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‘‘(B) an opportunity, with respect to each 1
such covered financial instrument transaction— 2
‘‘(i) for a hearing; and 3
‘‘(ii) to achieve compliance with the 4
requirements of this subchapter. 5
‘‘(2) P
UBLICATION.—Each supervising ethics 6
committee shall publish on a publicly available 7
website a description of— 8
‘‘(A) each fine assessed by the supervising 9
ethics committee pursuant to this section; 10
‘‘(B) the reasons why each such fine was 11
assessed; and 12
‘‘(C) the result of each assessment, includ-13
ing any hearing under paragraph (1)(B)(i) re-14
lating to the assessment. 15
‘‘(3) A
PPEAL.—A Member of Congress may ap-16
peal the assessment of a fine under this section to 17
a vote on the floor of the Senate or the House of 18
Representatives, as applicable, as a privileged mo-19
tion. 20
‘‘§ 13165. Audit by Government Accountability Office 21
‘‘Not later than 2 years after the date of enactment 22
of the Preventing Elected Leaders from Owning Securities 23
and Investments (PELOSI) Act, the Comptroller General 24
of the United States shall— 25
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‘‘(1) conduct an audit of the compliance by 1
Members of Congress with the requirements of this 2
subchapter; and 3
‘‘(2) submit to the supervising ethics commit-4
tees a report describing the results of the audit con-5
ducted under paragraph (1).’’. 6
(b) C
ONFORMINGAMENDMENTS.— 7
(1) Section 13103(f) of title 5, United States 8
Code, is amended— 9
(A) in paragraph (9), by striking ‘‘as de-10
fined in section 13101 of this title’’; 11
(B) in paragraph (10), by striking ‘‘as de-12
fined in section 13101 of this title’’; 13
(C) in paragraph (11), by striking ‘‘as de-14
fined in section 13101 of this title’’; and 15
(D) in paragraph (12), by striking ‘‘as de-16
fined in section 13101 of this title’’. 17
(2) Section 3(4)(D) of the Lobbying Disclosure 18
Act of 1995 (2 U.S.C. 1602(4)(D)) is amended by 19
striking ‘‘legislative branch employee serving in a po-20
sition described under section 13101(13) of title 5, 21
United States Code’’ and inserting ‘‘officer or em-22
ployee of Congress (as defined in section 13101 of 23
title 5, United States Code)’’. 24
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(3) The table of sections for chapter 131 of title 1
5, United States Code, is amended by adding at the 2
end the following: 3
‘‘SUBCHAPTER IV—BANNING INSIDER TRADING IN CONGRESS
‘‘13161. Definitions.
‘‘13162. Prohibition on certain transactions and holdings involving covered fi-
nancial instruments.
‘‘13163. Certification of compliance.
‘‘13164. Authority of supervising ethics committees.
‘‘13165. Audit by Government Accountability Office.’’.
Æ
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