Eliminating Executive Branch Insider Trading Act

Subjects: Government Operations and Politics


<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 693 Introduced in Senate (IS)]

&lt;DOC&gt;






118th CONGRESS
  1st Session
                                 S. 693

   To amend chapter 131 of title 5, United States Code, to prohibit 
certain executive branch officials from holding individual stocks, and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 7, 2023

  Mr. Hawley introduced 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 
certain executive branch officials from holding individual stocks, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Eliminating Executive Branch Insider 
Trading Act''.

SEC. 2. SENSE OF CONGRESS.

    It is the sense of Congress that executive branch officials should 
not have a personal financial interest in the outcome of Government 
policy decisions.

SEC. 3. BANNING INSIDER TRADING IN THE EXECUTIVE BRANCH.

    (a) In General.--Chapter 131 of title 5, United States Code, is 
amended by adding at the end the following:

    ``Subchapter IV--Banning Insider Trading in the Executive Branch

``Sec. 13161. Definitions
    ``In this subchapter:
            ``(1) Covered financial instrument.--
                    ``(A) In general.--The term `covered financial 
                instrument' means--
                            ``(i) any investment in--
                                    ``(I) a security (as defined in 
                                section 3(a) of Securities Exchange Act 
                                of 1934 (15 U.S.C. 78c(a)));
                                    ``(II) a security future (as 
                                defined in that section); or
                                    ``(III) a commodity (as defined in 
                                section 1a of the Commodity Exchange 
                                Act (7 U.S.C. 1a)); or
                            ``(ii) any economic interest comparable to 
                        an interest described in clause (i) that is 
                        acquired through synthetic means, such as the 
                        use of a derivative, including an option, 
                        warrant, or other similar means.
                    ``(B) Exclusions.--The term `covered financial 
                instrument' does not include--
                            ``(i) a diversified mutual fund;
                            ``(ii) a diversified exchange-traded fund;
                            ``(iii) a United States Treasury bill, 
                        note, or bond; or
                            ``(iv) compensation from the primary 
                        occupation of a covered individual who is a 
                        spouse or dependent of an individual described 
                        in subparagraphs (A) through (E) of paragraph 
                        (2).
            ``(2) Covered individual.--The term `covered individual' 
        means--
                    ``(A) the President;
                    ``(B) the Vice President;
                    ``(C) each officer or employee in the executive 
                branch, including a special Government employee as 
                defined in section 202 of title 18, who occupies a 
                position classified GS-15 or above of the General 
                Schedule or, in the case of positions not under the 
                General Schedule, for which the rate of basic pay is 
                equal to or greater than 120 percent of the minimum 
                rate of basic pay payable for GS-15 of the General 
                Schedule;
                    ``(D) each member of a uniformed service whose pay 
                grade is at or in excess of O-7 under section 201 of 
                title 37;
                    ``(E) each officer or employee in any other 
                position determined by the Director of the Office of 
                Government Ethics to be of equal classification to the 
                positions described in subparagraphs (C) and (D); and
                    ``(F) the spouse of any individual described in 
                subparagraphs (A) through (E).
            ``(3) Qualified blind trust.--The term `qualified blind 
        trust' has the meaning given the term in section 13104(f)(3).
            ``(4) Supervising ethics committee.--The term `supervising 
        ethics committee' means, as applicable--
                    ``(A) the Select Committee on Ethics of the Senate; 
                and
                    ``(B) the Committee on Ethics of the House of 
                Representatives.
``Sec. 13162. Prohibition on certain transactions and holdings 
              involving covered financial instruments
    ``(a) Prohibition.--Except as provided in subsection (b), covered 
individual, or any spouse of a covered individual, may not, during the 
term of service of the covered individual, hold, purchase, or sell any 
covered financial instrument.
    ``(b) Exceptions.--The prohibition under subsection (a) shall not 
apply to--
            ``(1) a sale by a covered individual, or a spouse of a 
        covered individual, that is completed by the date that is--
                    ``(A) for a covered individual serving on the date 
                of enactment of the Eliminating Executive Branch 
                Insider Trading Act, 180 days after that date of 
                enactment; and
                    ``(B) for any covered individual who commences 
                service as a covered individual after the date of 
                enactment of Eliminating Executive Branch Insider 
                Trading Act, 180 days after the first date of the 
                initial term of service; or
            ``(2) a covered financial instrument held in a qualified 
        blind trust operated on behalf of, or for the benefit of, the 
        covered individual or spouse of the covered individual.
    ``(c) Penalties.--
            ``(1) Disgorgement.--A covered individual shall disgorge to 
        the Treasury of the United States any profit from a transaction 
        or holding involving a covered financial instrument that is 
        conducted in violation of this section.
            ``(2) Fines.--A covered individual who holds or conducts a 
        transaction involving, or whose spouse holds or conducts a 
        transaction involving, a covered financial instrument in 
        violation of this section may be subject to a civil fine 
        assessed by the Attorney General under section 13163.
``Sec. 13163. Civil penalties
    ``(a) Civil Action.--The Attorney General may bring a civil action 
in any appropriate United States district court against any covered 
individual who violates any provision of section 13162.
    ``(b) Civil Penalty.--The court in which any action is brought 
under subsection (a) may assess against a covered individual a civil 
penalty of not more than $10,000 or the amount of compensation, if any, 
that the covered individual received for the prohibited conduct, 
whichever is greater.
``Sec. 13164. Audit by Government Accountability Office
    ``Not later than 2 years after the date of enactment of the 
Eliminating Executive Branch Insider Trading Act, and annually 
thereafter, the Comptroller General of the United States shall--
            ``(1) conduct an audit of the compliance by a 
        representative sample of covered individuals with the 
        requirements of this subchapter; and
            ``(2) submit to the supervising ethics committees a report 
        describing the results of the audit conducted under paragraph 
        (1).''.
    (b) Clerical Amendment.--The table of sections for chapter 131 of 
title 5, United States Code, is amended by adding at the end the 
following:

          ``subchapter iv--banning insider trading in congress

``13161. Definitions.
``13162. Prohibition on certain transactions and holdings involving 
                            covered financial instruments.
``13163. Civil penalties.
``13164. Audit by Government Accountability Office.''.
                                 &lt;all&gt;
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