II
118THCONGRESS
1
STSESSION S. 58
To amend the Ethics in Government Act of 1978 to prohibit transactions
involving certain financial instruments by Members of Congress.
IN THE SENATE OF THE UNITED STATES
JANUARY24 (legislative day, JANUARY3), 2023
Mr. H
AWLEYintroduced the following bill; which was read twice and referred
to the Committee on Finance
A BILL
To amend the Ethics in Government Act of 1978 to prohibit
transactions involving certain financial instruments 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.—The Ethics in Government Act of 8
1978 (5 U.S.C. App.) is amended by inserting after title 9
I the following: 10
VerDate Sep 11 2014 23:41 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S58.IS S58
kjohnson on DSK79L0C42PROD with BILLS 2
•S 58 IS
‘‘TITLE II—BANNING INSIDER 1
TRADING IN CONGRESS 2
‘‘SEC. 201. DEFINITIONS. 3
‘‘In this title: 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
VerDate Sep 11 2014 23:41 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S58.IS S58
kjohnson on DSK79L0C42PROD with BILLS 3
•S 58 IS
‘‘(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 109. 10
‘‘(3) Q
UALIFIED BLIND TRUST .—The term 11
‘qualified blind trust’ has the meaning given the 12
term in section 102(f)(3). 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
‘‘SEC. 202. PROHIBITION ON CERTAIN TRANSACTIONS AND 21
HOLDINGS INVOLVING COVERED FINANCIAL 22
INSTRUMENTS. 23
‘‘(a) P
ROHIBITION.—Except as provided in sub-24
section (b), a Member of Congress, or any spouse of a 25
VerDate Sep 11 2014 23:41 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S58.IS S58
kjohnson on DSK79L0C42PROD with BILLS 4
•S 58 IS
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
VerDate Sep 11 2014 23:41 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S58.IS S58
kjohnson on DSK79L0C42PROD with BILLS 5
•S 58 IS
‘‘(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) I
NCOME TAX.—A loss from a transaction 6
or holding involving a covered financial instrument 7
that is conducted in violation of this section may not 8
be deducted from the amount of income tax owed by 9
the applicable Member of Congress or spouse of a 10
Member of Congress. 11
‘‘(3) F
INES.—A Member of Congress who holds 12
or conducts a transaction involving, or whose spouse 13
holds or conducts a transaction involving, a covered 14
financial instrument in violation of this section may 15
be subject to a civil fine assessed by the supervising 16
ethics committee under section 204. 17
‘‘SEC. 203. CERTIFICATION OF COMPLIANCE. 18
‘‘(a) I
NGENERAL.—Not less frequently than annu-19
ally, each Member of Congress shall submit to the applica-20
ble supervising ethics committee a written certification 21
that the Member of Congress has achieved compliance 22
with the requirements of this title. 23
VerDate Sep 11 2014 23:41 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S58.IS S58
kjohnson on DSK79L0C42PROD with BILLS 6
•S 58 IS
‘‘(b) PUBLICATION.—The supervising ethics commit-1
tees shall publish each certification submitted under sub-2
section (a) on a publicly available website. 3
‘‘SEC. 204. AUTHORITY OF SUPERVISING ETHICS COMMIT-4
TEES. 5
‘‘(a) I
NGENERAL.—The supervising ethics commit-6
tees may implement and enforce the requirements of this 7
title, including by— 8
‘‘(1) issuing— 9
‘‘(A) for Members of Congress— 10
‘‘(i) rules governing that implementa-11
tion; and 12
‘‘(ii) 1 or more reasonable extensions 13
to achieve compliance with this title, if the 14
supervising ethics committee determines 15
that a Member of Congress is making a 16
good faith effort to divest any covered fi-17
nancial instruments; and 18
‘‘(B) guidance relating to covered financial 19
instruments; 20
‘‘(2) publishing on the internet certifications 21
submitted by Members of Congress under section 22
203(a); and 23
VerDate Sep 11 2014 23:41 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S58.IS S58
kjohnson on DSK79L0C42PROD with BILLS 7
•S 58 IS
‘‘(3) assessing civil fines against any Member of 1
Congress who is in violation of this title, subject to 2
subsection (b). 3
‘‘(b) R
EQUIREMENTS FOR CIVILFINES.— 4
‘‘(1) I
N GENERAL.—Before imposing a fine pur-5
suant to this section, a supervising ethics committee 6
shall provide to the applicable Member of Con-7
gress— 8
‘‘(A) a written notice describing each cov-9
ered financial instrument transaction for which 10
a fine will be assessed; and 11
‘‘(B) an opportunity, with respect to each 12
such covered financial instrument transaction— 13
‘‘(i) for a hearing; and 14
‘‘(ii) to achieve compliance with the 15
requirements of this title. 16
‘‘(2) P
UBLICATION.—Each supervising ethics 17
committee shall publish on a publicly available 18
website a description of— 19
‘‘(A) each fine assessed by the supervising 20
ethics committee pursuant to this section; 21
‘‘(B) the reasons why each such fine was 22
assessed; and 23
VerDate Sep 11 2014 23:41 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S58.IS S58
kjohnson on DSK79L0C42PROD with BILLS 8
•S 58 IS
‘‘(C) the result of each assessment, includ-1
ing any hearing under paragraph (1)(B)(i) re-2
lating to the assessment. 3
‘‘(3) A
PPEAL.—A Member of Congress may ap-4
peal the assessment of a fine under this section to 5
a vote on the floor of the Senate or the House of 6
Representatives, as applicable, as a privileged mo-7
tion. 8
‘‘SEC. 205. AUDIT BY GOVERNMENT ACCOUNTABILITY OF-9
FICE. 10
‘‘Not later than 2 years after the date of enactment 11
of the Preventing Elected Leaders from Owning Securities 12
and Investments (PELOSI) Act, the Comptroller General 13
of the United States shall— 14
‘‘(1) conduct an audit of the compliance by 15
Members of Congress with the requirements of this 16
title; and 17
‘‘(2) submit to the supervising ethics commit-18
tees a report describing the results of the audit con-19
ducted under paragraph (1).’’. 20
(b) C
ONFORMINGAMENDMENTS.— 21
(1) Section 109 of the Ethics in Government 22
Act of 1978 (5 U.S.C. App.) is amended— 23
VerDate Sep 11 2014 23:41 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S58.IS S58
kjohnson on DSK79L0C42PROD with BILLS 9
•S 58 IS
(A) in the matter preceding paragraph (1), 1
by striking ‘‘For the purposes of this title, the 2
term—’’ and inserting ‘‘In this title:’’; 3
(B) in paragraph (1), by striking ‘‘means’’ 4
and all that follows through ‘‘Representatives;’’ 5
and inserting the following: ‘‘means, as applica-6
ble— 7
‘‘(A) the Select Committee on Ethics of 8
the Senate; and 9
‘‘(B) the Committee on Ethics of the 10
House of Representatives.’’; 11
(C) in each of paragraphs (2) through 12
(17), by striking the semicolon at the end of the 13
paragraph and inserting a period; 14
(D) in paragraph (18)— 15
(i) in subparagraph (B), by striking 16
‘‘Standards of Official Conduct’’ and in-17
serting ‘‘Ethics’’; and 18
(ii) in subparagraph (D), by striking 19
‘‘; and’’ at the end and inserting a period; 20
(E) in each of paragraphs (1) through 21
(19)— 22
(i) by inserting ‘‘The term’’ after the 23
paragraph designation; and 24
VerDate Sep 11 2014 23:41 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S58.IS S58
kjohnson on DSK79L0C42PROD with BILLS 10
•S 58 IS
(ii) by inserting a paragraph heading, 1
the text of which is comprised of the term 2
defined in that paragraph; and 3
(F) by redesignating paragraphs (8) and 4
(9) as paragraphs (9) and (8), respectively, and 5
moving the paragraphs so as to appear in nu-6
merical order. 7
(2) Section 101(f) of the Ethics in Government 8
Act of 1978 (5 U.S.C. App.) is amended— 9
(A) in paragraph (9), by striking ‘‘as de-10
fined under section 109(12)’’; 11
(B) in paragraph (10), by striking ‘‘as de-12
fined under section 109(13)’’; 13
(C) in paragraph (11), by striking ‘‘as de-14
fined under section 109(10)’’; and 15
(D) in paragraph (12), by striking ‘‘as de-16
fined under section 109(8)’’. 17
(3) Section 111(2) of the Ethics in Government 18
Act of 1978 (5 U.S.C. App.) is amended by striking 19
‘‘Standards of Official Conduct’’ and inserting ‘‘Eth-20
ics’’. 21
(4) Section 402 of the Ethics in Government 22
Act of 1978 (5 U.S.C. App.) is amended— 23
(A) in subsection (b), by striking ‘‘title II 24
of’’ each place it appears; and 25
VerDate Sep 11 2014 23:41 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S58.IS S58
kjohnson on DSK79L0C42PROD with BILLS 11
•S 58 IS
(B) in subsection (f)(2)(B)— 1
(i) by striking ‘‘Subject to clause (iv) 2
of this subparagraph, before’’ each place it 3
appears and inserting ‘‘Before’’; and 4
(ii) by striking clause (iv). 5
(5) Section 503(1)(A) of the Ethics in Govern-6
ment Act of 1978 (5 U.S.C. App.) is amended by 7
striking ‘‘Standards of Official Conduct’’ and insert-8
ing ‘‘Ethics’’. 9
(6) Section 3(4)(D) of the Lobbying Disclosure 10
Act of 1995 (2 U.S.C. 1602(4)(D)) is amended by 11
striking ‘‘legislative branch employee serving in a po-12
sition described under section 109(13) of the Ethics 13
in Government Act of 1978 (5 U.S.C. App.)’’ and 14
inserting ‘‘officer or employee of the Congress (as 15
defined in section 109 of the Ethics in Government 16
Act of 1978 (5 U.S.C. App.))’’. 17
(7) Section 21A of the Securities Exchange Act 18
of 1934 (15 U.S.C. 78u–1) is amended— 19
(A) in subsection (g)(2)(B)(ii), by striking 20
‘‘section 109(11) of the Ethics in Government 21
Act of 1978 (5 U.S.C. App. 109(11))’’ and in-22
serting ‘‘section 109 of the Ethics in Govern-23
ment Act of 1978 (5 U.S.C. App.)’’; and 24
(B) in subsection (h)(2)— 25
VerDate Sep 11 2014 23:41 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S58.IS S58
kjohnson on DSK79L0C42PROD with BILLS 12
•S 58 IS
(i) in subparagraph (B), by striking 1
‘‘section 109(8) of the Ethics in Govern-2
ment Act of 1978 (5 U.S.C. App. 109(8))’’ 3
and inserting ‘‘section 109 of the Ethics in 4
Government Act of 1978 (5 U.S.C. App.)’’; 5
and 6
(ii) in subparagraph (C), by striking 7
‘‘under section 109(10) of the Ethics in 8
Government Act of 1978 (5 U.S.C. App. 9
109(10))’’ and inserting ‘‘in section 109 of 10
the Ethics in Government Act of 1978 (5 11
U.S.C. App.)’’. 12
Æ
VerDate Sep 11 2014 23:41 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6301 E:\BILLS\S58.IS S58
kjohnson on DSK79L0C42PROD with BILLS