The $1 Million Amazon Conflict: Washington's Ethics Czars Struggle To Enforce Stock-Trading Laws (wsj.com) 26
The U.S. has rules limiting federal officials' stock-market investing. They can be waived. The Wall Street Journal: Mark Wu held more than $1 million of Amazon.com stock when President Biden tapped him to help craft a trade policy that would benefit U.S. technology companies and online retailers. Ethics officials at the Office of the U.S. Trade Representative said they gave Mr. Wu two options: Get rid of the stock or recuse himself from digital trade issues. He did neither.
For several months, Mr. Wu continued working on the trade matter while keeping the shares. He had "not followed the requirements," the U.S. Trade Representative's chief of staff told him in a June 2021 phone call, an email describing the call shows. Eventually, Mr. Wu quit, citing family issues. He kept his Amazon stock. Mr. Wu said he didn't work on trade issues specific to Amazon and left the government when the restrictions became too much of a burden on his family.
The U.S. has a law aimed at preventing the nation's thousands of obscure but powerful federal officials from using their influence on regulations, policies and investigations to benefit themselves. With penalties up to $50,000 and five years in prison, the law is supposed to ensure that officials in the executive branch don't work on any matter that could affect their personal finances. It doesn't. It has exceptions. Violations often go unpunished. When a problematic holding is identified, if the official resists selling it, the rules often are waived. The result is a system that largely relies on government employees to police their own stock investing.
For several months, Mr. Wu continued working on the trade matter while keeping the shares. He had "not followed the requirements," the U.S. Trade Representative's chief of staff told him in a June 2021 phone call, an email describing the call shows. Eventually, Mr. Wu quit, citing family issues. He kept his Amazon stock. Mr. Wu said he didn't work on trade issues specific to Amazon and left the government when the restrictions became too much of a burden on his family.
The U.S. has a law aimed at preventing the nation's thousands of obscure but powerful federal officials from using their influence on regulations, policies and investigations to benefit themselves. With penalties up to $50,000 and five years in prison, the law is supposed to ensure that officials in the executive branch don't work on any matter that could affect their personal finances. It doesn't. It has exceptions. Violations often go unpunished. When a problematic holding is identified, if the official resists selling it, the rules often are waived. The result is a system that largely relies on government employees to police their own stock investing.
Pretend rules were unforced, would it matter (Score:4, Insightful)
Even if the rules were enforced, with a cap of $50k fine would it matter?
Many members of the house and congress have made millions, or even tens of millions of dollars in the last few years.
The whole thing needs to be re-thoguht, from fines to process. Maybe it's not reasonable to ask serving politicians to live entires outside the stock market, as that would keep a lot of really good people from ever being in government... but maybe it's as simple as utter transparency where the second someone buys or sell stocks or options that is published for all to see - and possibly benefit from.
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Even if the rules were enforced, with a cap of $50k fine would it matter?
If the cap was only $50k then it might not, but $50k plus five years in prison is a much much stiffer penalty. Setting aside the question of whether punitive measures actually prevent crimes, five years in prison seems sufficient for what this law covers. More severe fraud and graft are handled by other laws.
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If the cap was only $50k then it might not, but $50k plus five years in prison is a much much stiffer penalty.
We all know no U.S. federally elected official will ever see the inside of a jail.
Especially over a financial matter.
Different Rules for Different People (Score:2)
There is no conflict of interest here, no taxes due to the US and the accounts are basically exactly the same year to year and nobody actually told her that she needed to do this until it became a news s
Re: Different Rules for Different People (Score:1)
Oh, boohoo, you guys have an income more than $250k/year, you need to file some extra forms. Why donâ(TM)t you want to pay into a socialist utopia?
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Oh, boohoo, you guys have an income more than $250k/year, you need to file some extra forms.
Err no we do not, not even close to that. It's the FBAR form. All you need to have is $10k in total foreign financial accounts which means any US citizen with any sort of savings.
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Didn't realize Washington had ethics (Score:5, Insightful)
Seriously, the stock and lobbying rules are jokes made by the corrupt to be more corrupt.
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A Revolving door (Score:5, Insightful)
Re:A Revolving door (Score:4, Informative)
Blind Trust... (Score:4, Insightful)
There used to be a long history of the PotUS giving all their wealth to a "blind trust" plan with a financial advisor who wouldn't tell them what they're invested in. This let them have the freedom to operate without the "conflict of interest" problems.
You'd think there could be an investment provider that would provide a "blind" investment fund for all sorts of government types.
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Ultimately it's as impossible to stop as any kind of political favor or similar abuse of position that occurs just as frequently. At best we can just try to prosecute the most obvious and egregious cases and h
Perpetual paradox (Score:4, Insightful)
Government service isn't supposed to make you rich at the taxpayers' expense.
At the same time, the sort of competent people one would nominally like to see in government are precisely the sort of people who are more prone to be doing well outside of government, and thus would be repelled by the restrictive policies in place as a condition of working in government.
The end result is that we get the worst of both worlds: mediocre people for whom government is a step up relative to what they'd be doing otherwise, and sneaky bastards who have the wherewithal to skirt the rules.
I don't have an answer, but I do see a lot of "process as a substitute for cognition" that enables (or is the end result of) this dynamic, and my instinct is just to pay people more *and* fire poor performers more easily.
Somewhere between what we've got now and the bad old days of unabashed patronage there's got to be a happier medium.
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Exactly. This case cited in the summary is an example of where we lost out on the services of someone valuable to the nation because we demanded that they liquidate their million dollar investment in a company they believed would grow long term. Of course they declined.
It is a complicated situation. We want to prevent insiders from using their governmental power and knowledge for their personal benefit at the detriment of the nation... But at the same time we cannot expect to find experts on a subject or
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Absolutely agree. The little bit of time I put into focusing on politics when I lived near DC? I noticed that you had far too many people perpetually running for one office or another, desperate to break into politics so they could start influencing things and increasing their pay. Others already in relatively influential political positions were often acting as "king makers", to gate-keep who was and wasn't going to get elected (at least at a local or regional level).
The system really isn't designed at all
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There are TONS of regulations that govern rank and file bureaucrats that ultimately boil down to even the appearance of impropriety is verboten, and subject to both dismissal and criminal charges.
There are already TSP accounts for civil service to dump any holdings prior to taking office, with at least marginal returns on a mostly blind trust.
This is simply a matter of Quis custodiet ipsos custodes where regulations only apply to the little people.
Self-Regulation (Score:3)
So someone appointed to an executive branch agency by the head of the executive branch, and some other executive branch agency is supposed to make sure they are behaving ethically? I think it's working exactly as well as you'd expect.
Congress is supposed to watchdog this stuff but they do the same thing.
Trump didn't, the standard was set (Score:1)
What a Hoot! (Score:2, Insightful)
Hmm (Score:1)
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good luck changing the rules (Score:2)
The best change would be to change the hiring requirements to prevent them from being hired in the first place. The problem with this is that congress controls the laws, and they're the ones that allow the rules to be bent because they aren't stupid enough to criminalize their own actions.
Some interesting trivia (Score:2)
It turns out that senior government appointees can diversify their share portfolio to a market-neutral position when accepting a role, without incurring an immediate capital gains tax bill. The purchase price gets grandfathered into the new portfolio.
Rumor has it that some former Goldman Sachs partners accepted administration jobs purely as a way to offload their GS shares in a tax-friendly way. Just rumors of course.
While I worry... (Score:2)