Do Minnesota congressmen have stock market disputes?

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Three Minnesota congressmen – Senator Tina Smith and Representatives Angie Craig and Dean Phillips – reported stock trades from their own accounts or those of close family members at companies that overlapped with their work in Congress.

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

Phillips reported the most business activity: 276 companies, including 34 that the Times flagged as potential conflicts. Smith disclosed transactions at four companies, including three potential conflicts. Craig reported transactions at 19 companies, including two that the newspaper deemed to be potential disputes.

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

Phillips says he didn’t make any trades

Phillips said he sold shares of Wells Fargo in 2019 as the company was under investigation by the House Financial Services Committee, of which Phillips was then a member. Phillips also sold shares in four banking companies before their executives appeared before the committee.

Phillips said he had not directly traded in stocks since taking office and that his financial advisers sold the shares of bank stocks in 2019 without his knowledge. A spokesperson provided a May 2020 email from JP Morgan indicating that Phillips had not directed any transactions since January 1, 2019 – just before he took office.

In January 2020, Phillips hired lawyers to transfer his assets into a blind trust, a process that took 18 months. The congressman has begun the process of transferring two other accounts of which he is 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’ which means I can’t see what’s being bought and sold in my name – one of the few congressmen to have taken this step. I think he’s time for all members of Congress to do the same.”

Phillips’ spokesperson pointed to a 2021 Business Insider article that reported that Phillips was among 10 members of Congress who set up a blind trust. He advocated for legislation requiring all members to establish such trusts, but Congress did not act on this measure.

Republican Tom Weiler has questioned the 2019 trade schedule. Weiler is challenging Phillips for the Congressional seat in the Twin Cities’ Metro West.

“Don’t let members of Congress own individual stocks,” Weiler said in a statement. “It’s so simple.”

Craig calls for ban on stock trading

Craig’s situation seems much simpler. In an interview, the congresswoman said her son, then 19, tried to trade 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 heard about it and her son lost money in both trades.

Craig sold his own individual shares before taking office in 2018 and supports a complete ban on members of Congress, their spouses and dependent children owning individual shares. The resolution has not advanced.

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

Republican Tyler Kistner, who is challenging Craig for his congressional seat from Metro South this fall, said the question reflected hypocrisy in Congress.

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

Asked by reporters on Wednesday why a securities trading bill has not moved forward, Speaker Nancy Pelosi said she expects a bill to be introduced in the House this this month.

“It’s very strong,” Pelosi said of the legislation. She declined to detail what restrictions this 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 advocated for legislation that would reduce insulin prices. Her husband is an independent investor in healthcare and medical device companies.

In a statement, the senator said she and her husband are keeping their jobs separate.

“I am unaware of and have absolutely no role in any of his investment decisions,” Smith said.

A spokesperson for Smith said the senator had not considered and did not know whether her legislation would benefit 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 spokesperson said.

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

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