Fact Check: Do Minnesota members of Congress have stock trading conflicts?

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Three Minnesota members of Congress – Sen. Tina Smith and Reps. Angie Craig and Dean Phillips – have reported stock trades from their own accounts or those of close family members in companies that intersected with their congressional work.

The New York Times included the three lawmakers in a report about 97 members who had potential stock trading conflicts in recent years. Their explanations varied: Phillips said his investment advisers made the trades without his input, Craig said her then-teenage son traded without her knowledge, and Smith said her husband made the trades in question. No other Minnesota members were included.

Phillips reported the most trading activity: 276 companies, including 34 that The Times flagged as potential conflicts. Smith disclosed trades in four companies, including three potential conflicts. Craig reported trades in 19 companies, including two that the newspaper deemed potential conflicts.

The Republicans challenging Phillips and Craig this fall said the activity was inconsistent with the members’ advocacy for limitations on owning or trading individual stocks. Smith does not face re-election until 2026.

Phillips says he didn’t make trades

Phillips reported selling shares of Wells Fargo in 2019 as the company was under investigation in the House Financial Services committee, which Phillips was then a member of. Phillips also sold shares in four banking companies before their executives were scheduled to appear before the committee.

Phillips said he hasn’t directly traded stocks since taking office, and his financial advisers sold the shares of the banking stocks in 2019 without his knowledge. A spokesman provided a May 2020 email from JP Morgan that indicated Phillips had not directed any trades since Jan. 1, 2019 — just before he took office.

In January 2020, Phillips hired lawyers to move his assets into a blind trust, a process that took 18 months. The congressman has started the process of moving two more accounts on which he’s the beneficiary into blind trusts.

“I don’t trade stocks and haven’t had contact with my advisors since 2018,” Phillips said on Twitter. “My assets are in a ‘blind trust,’ meaning I can’t see what is bought and sold on my behalf — one of only a handful in Congress to have taken that step. I believe it’s time all members of Congress do the same.”

Phillips’ spokesman pointed to a Business Insider article from 2021 that reported Phillips was among 10 members of Congress who had set up a blind trust. He has advocated for legislation to force all members to set up such trusts, but Congress has not acted on the measure.

Republican Tom Weiler questioned the timing of the 2019 trades. Weiler is challenging Phillips for the congressional seat in the west Twin Cities Metro.

“Do not allow members of Congress to own individual stocks,” Weiler said in a statement. “It’s that simple.”

Craig seeks stock trading ban

Craig’s situation appears much simpler. In an interview, the congresswoman said her son, then 19 years old, tried day-trading individual stocks while in college. The companies included Ford and Lyft. Craig was then a member of the House Transportation committee.

Craig said she reported the activity when she learned about it, and that her son lost money on both trades.

Craig sold her own individual stocks before taking office in 2018 and supports a total ban on members of Congress, their spouses, and dependent children from owning individual stocks. The resolution hasn’t moved forward.

“There’s nothing wrong with holding a portfolio as a member of Congress if you’re invested in mutual funds and that sort of thing, but even the appearance of a conflict of interest when you’re a member of Congress can be problematic,” Craig said in an interview. “I think there’s a number of ways we can get at this. The truth is there’s been resistance in both parties to not having the ability to hold individual stocks over the years – including Democratic leadership from time to time.”

Republican Tyler Kistner, who is challenging Craig for her south Metro congressional seat this fall, said the issue reflected a hypocrisy in Congress.

“What happened to your stock trading ban?” Kistner tweeted at Craig on Tuesday. A spokesman said Kistner would support a stock trading ban for members and their families or a blind trust requirement.

When asked by reporters on Wednesday about why a stock trading bill hasn’t advanced, Speaker Nancy Pelosi said she expected legislation to come to the House floor this month.

“It’s very strong,” Pelosi said of the legislation. She declined to detail the curbs it would place on members or their staff. “You know what? When the bill comes out, you’ll see what it is.”

Smith’s husband sold shares

Smith’s situation involved shares in two insulin equipment makers that her husband sold in March 2020, The Times reported. Smith has advocated for legislation that would lower insulin prices. Her husband is an independent investor in health care and medical device companies.

In a statement, the senator said she and her husband keep their work separate.

“I do not know about and have absolutely no role in any of his investment decisions,” Smith said.

A spokesman for Smith said the senator did not consider and did not know whether her legislation would benefit the insulin equipment companies. Her husband’s decision to sell the shares on March 17, 2020, came as the market plunged at the start of the COVID-19 pandemic and was a “simple business decision,” the spokesman said.

Smith supports a bill from U.S. Sen. Jeff Merkley of Oregon to ban members from owning individual stocks, the spokesman said.

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