Federal Officials Trade Stock in Companies Their Agencies Oversee (wsj.com) 52
schwit1 shares a report: A Wall Street Journal investigation revealed that thousands of officials across the U.S. government's executive branch disclosed owning or trading stocks that stood to rise or fall with decisions their agencies made. Across 50 federal agencies ranging from the Commerce Department to the Treasury Department, more than 2,600 officials reported stock investments in companies while those companies were lobbying their agencies for favorable policies, during both Republican and Democratic administrations. When the financial holdings caused a conflict, the agencies sometimes simply waived the rules. The Office of Government Ethics, which oversees the conflict-of-interest rules across the executive branch, is "committed to transparency and citizen oversight of government," said a spokeswoman.
Among the findings of the investigation, which is the most comprehensive analysis of stock trading by officials in the executive branch of the government:
Numerous federal officials owned shares of companies lobbying their agencies: More than 200 senior officials at the Environmental Protection Agency, or nearly one in three, reported that they or their family members held investments in companies that were lobbying the agency.
Issues emerged at a wide array of agencies: At the Defense Department, officials in the office of the secretary or their family members collectively owned between $1.2 million and $3.4 million of stock in aerospace and defense companies, on average, during years the Journal examined. Some owned stock in Chinese companies while the U.S. considered blacklisting the companies.
Some officials traded ahead of regulatory actions: More than five dozen officials at five agencies reported trading stocks of companies shortly before their departments announced enforcement actions against those companies, such as charges or settlements.
Among the findings of the investigation, which is the most comprehensive analysis of stock trading by officials in the executive branch of the government:
Numerous federal officials owned shares of companies lobbying their agencies: More than 200 senior officials at the Environmental Protection Agency, or nearly one in three, reported that they or their family members held investments in companies that were lobbying the agency.
Issues emerged at a wide array of agencies: At the Defense Department, officials in the office of the secretary or their family members collectively owned between $1.2 million and $3.4 million of stock in aerospace and defense companies, on average, during years the Journal examined. Some owned stock in Chinese companies while the U.S. considered blacklisting the companies.
Some officials traded ahead of regulatory actions: More than five dozen officials at five agencies reported trading stocks of companies shortly before their departments announced enforcement actions against those companies, such as charges or settlements.
Well of course they do. (Score:5, Informative)
It's similar to senators and the like owning stock in companies that are impacted by their decisions. It's so ubiquitous that they've largely quit policing it at all. Unless you're ready to jail the whole works, you're going to have to let it slide.
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There is a simple fix.
All government employees and contracted agents must have a BLIND trust for their investments.
This would fix a lot of the issues.
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That's 15% of the workforce. It'll never fly.
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That's people who work directly in government.
The contractor base who don't work for the government, but still receive checks from them, would need to be enforced
That's over 50% of the working population, I believe. You're basically creating a massive collective pot (ripe for plundering, which given who we're talking about, I'd be fine with, because...)
You can't fix this problem without destroying the institutions involved and scattering the people to the wind. The only way to do that is eliminate the seat
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50% of the working population is paid by government? That seems like an extraordinary claim. 35% of workers are contractors to the federal government while 15% directly work for government. I'm not saying you are wrong it just seems very amazing to me if it is.
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I'd argue you paid into the SS scheme and that's yours. Your VA benefits are also something that you earned and literally gave blood, sweat and tears for. Definitely earned that one.
But sure if you take all the SS and disabled persons (vet or otherwise) and call it government paid then 50% would might even be to low. Not sure if it's still true today but I recall Mitt Romney saying 47% of the population are doing all the paid work. Given that statement 50% makes sense.
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I think I was conflating statistics with welfare recipients, which are the other half of the "unproductive recipients" on the receiving side of tax funds.
Even still, 15% - 1 in 6 people - being net costs to society, not accounting welfare, is pretty obscene, don't you agree?
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Well, someone has to run the government or we can't have nice things or even crappy things. Government is necessary but perhaps could be run thinner and have less scope. Lots of things government involves itself in it shouldn't be and when it does it just screws with the markets but also imprints on culture which it should not. Regulations are fine and dandy but when government starts offering any kind of services that the private market also offers, things start to smell and rot.
Government should not be in
Re:Well of course they do. (Score:5, Informative)
Your confusing the issue.
Federal employees are not allowed by law to buy stocks in conflicts of interest. My wife can only use indexes as a GS Contracting Officer. SAS'ers and elected officials have no such regulation and are the ones that are the problem.
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That is crazy! And not at all surprising.
I keep waiting for someone with guns to do something about this. Versus walking into a daycare or school. And I have yet to hear about a drone assassin. Something that doesn't seem all that hard, if you really wanted to make one.
Or like the people in charge could be good humans and NOT take advantage of the system. And put rules in place to protect the public from their less scrupulous colleagues. But that's crazy talk.
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Laws are only for the little people, not the "elite". Nancy Pelosi got something like 69% return on her stock portfolio, besting every other stock trader out there.
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Most government employees have jobs that have no effect on the stock price of companies. It's only a tiny fraction of top management that could possibly have a conflict of interest.
They might not have influence, but they still have access to information that outsiders might not have.
Re:Well of course they do. (Score:5, Interesting)
I agree its to hard to identify the 'cheaters' in terms of who is trading organizations impacted by regulatory action they may either have authority over or at the least advanced knowledge of - you can't to many companies to many with to much cross cutting over industries and to many regulatory bodies that might not impact company A but certainly could impact a supplier or client of company A.
The only really 'fair' solution is just say anyone holding an elected office, or in public service rated above GS[N] where N is whatever level most people start to get the level in insight/control over government actions we decide makes them insiders, is simply not allowed to own individual securities. Restrict them to holding widely held publicly investable Funds and ETFs or if they want to be able to own individuals companies, private funds, etc they can do so in blind trust and trustee can manage it actively for the duration of their public service.
Even with that rule, if you work at the FAA/EPA/.. you might still have some non-public information that might help you decide to swap in and out of something like JETS or USO but I suspect not so much advance knowledge or certainty that someone really diligently following the congressional minutes as they are made public and all the request for comment stuff for that given industry could achieve.
It won't be perfect, but would probably be more fair than the current system. I don't think going much further than that make sense though because what people of quality are going to want to work in government if you effectively bar them from investing?
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That's a pretty nuanced and well considered response. How dare you!
All kidding aside, it's a thorny problem. The blind trust thing sounds appropriate to some, but a trust isn't free, and neither are financial management services. Most people working in government make less than $100k/year. Your refinement of GSn addresses this to some extent.
Letting it slide sounds morally iffy...but it's often the pragmatic choice.
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Indeed, and you right trustees and financial managers are not free. My phasing the requirement in after some GS[N] level was to hopefully not complicate the lives and unfairly impose costs on small fries.
I am sure we could do some things like make trustee/financial manager fees upto some percentage of the value of assets you transferred into the trust in a given year a non-refundable tax credit for qualifying government employees. There is certainly room to tune things.
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Generally I would say just bar them from pattern trading. Most of the ETFs are worse investments than their top 5 holdings due to the way they operate. Trading on inside information is a problem, but holding stock in a sector you understand is likely a good thing on the whole.
Bidens, Pelosis, Bushes, Clintons... (Score:2, Insightful)
Political crime families will of course find ways to make money using family members who are not working for the government.
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That's like completely jettisoning all players from the Washington Commanders. It might be emotionally satisfying, but you're still left with nothing, and last place is still better than no team at all.
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It depends a bit on how you own the stock. I own very few directly, but a lot of stuff is from mutual funds and the like. Some is in 401Ks, etc. No direct control over it, but occasionally I will get a voting form for something I only own 12 shares in and didn't know I had.
So if I was a federal worker and wanted to be completely above board, should I have to manage each and every stock manually? That would be a full time job, simpler to just get a Vanguard XYZ ETX Emerging Markets Fund #3. But if an off
Re: Well of course they do. (Score:3)
Unless you're ready to jail the whole works
Do it. Corruption is a cancer on society. It must be excused. If it is too advanced to excuse, the patient does not have long to live.
Another comment suggests only holding this above a certain GS level responsible. I'm fine with that. Your GS7 clerk isn't making big decisions. Your GS14 manager is. And certainly the entire SES must be included.
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Do it. Corruption is a cancer on society. It must be excused. If it is too advanced to excuse, the patient does not have long to live.
s/excuse/excise/g
COI regs (Score:1, Interesting)
As I understand the conflict of interest regulations for federal employees, they can own stock as long as their particular actions don't involve that stock (if other people in the agency they work for make decisions that affect the company, it's irrelevant). So it's not clear that any of these mentioned are conflicts of interest.
Frankly, I'm more concerned about members of Congress owning stock in companies that they regulate.
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Unintelligible.
What's a DOL? What's a SMB? What are cpi numbers?
Why does data from DOL "monitoring logs" showing "job/cpi numbers" allow you to "frontrun market trades"?
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Re:COI regs (Score:4, Informative)
Unintelligible.
What's a DOL? What's a SMB? What are cpi numbers?
Why does data from DOL "monitoring logs" showing "job/cpi numbers" allow you to "frontrun market trades"?
He worked at the Department of Labor, and people with access to the server shares would watch for the source documents that the Fed releases on economic data and use that to pre-trade the news. His post wasn't unintelligible, but you need minor government, IT, and finance knowledge to get the drift.
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Conflicted stock holdings are only the most obvious and shallow of the corruption. Government employee interests are intertwined with all sort of institutions; powerful non-profits, academic institutions, private and quasi-government companies, foreign governments, etc. The revolving doors spin at high RPM. Family and friends hold lucrative positions in these interests. Insider information flows freely in all directions.
Traded companies at least deserve credit as being the most transparent participant
Most active Michael Molina of EPA appointed 2018 b (Score:5, Informative)
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New York Times article (Score:5, Informative)
By very definition (Score:1, Insightful)
This is, for those who haven't been paying attention, the very literal definition of fascism.
Look at the history books. Where did the fascists go when they "lost" the war? They came to the US, and were absorbed into US institutions. Fascist ideology birthed both European fascism and US corporatism in the late 1800s.
Corporations are not separate, private entities. It's not a private business, bro. They are endorsed, sponsored, and guaranteed by the federal government. The people who call the shots often tran
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Try again. We're talking about economics.
https://en.wikipedia.org/wiki/Economics_of_fascism
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That wiki link is more or less how I would describe Fascism. Central control of government is just good old authoritarianism, which you can have with whatever kind of economic system you want.
USA is very much fascist but we do still have a democratic republic as well. Would be nice if we could push back on the co-mingling of government officials and big business. The two really shouldn't be so cozy but here we are.
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You have illusion that it's the people who decide the outcome of the votes, rather than the sponsoring corporations? Interesting. Is that why we have the ability to "mint" a pixel and track its full authenticity from point of origin, but can't seem to figure out how to certify elections?
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Corruption *is* the political system in the USA (Score:5, Insightful)
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and corruption, fueled by greed, is why society is in decline and civilization is collapsing ...
This is in no way news (Score:5, Insightful)
I'm shocked! (Score:2)
Corruption... (Score:3)
Corruption is the downfall of any society.
You are either in or out (Score:2)
No different than CONgress critters (Score:2)
Not just companies, but economic reports (Score:2)