This bill would add a new subchapter to Title 5 that stops many top federal officials and some of their family members from owning or trading a wide set of investments. "Covered individuals" include the President, Vice President, Members of Congress, certain congressional staff, senior executive branch officials, certain judicial officers, and the spouses and dependent children of those people. "Covered investments" include securities, commodities, futures, digital assets, event (prediction) contracts, and similar synthetic interests.
The bill requires covered individuals to stop buying covered investments and to divest (sell) any they own. The deadline to divest is 30 days after the law takes effect for people already covered and 30 days after someone becomes a covered individual for people who later enter covered positions. Certain holdings are excluded from the rule, including diversified, publicly traded funds; U.S. Treasury securities; state and municipal bonds; compensation a spouse or dependent receives from their employer; small business interests; a single-member LLC holding a personal residence; and certain Alaska Native settlement shares. A spouse or dependent may trade covered investments only if the trade is part of their primary job and the covered investment is not owned by the covered official.
The bill also says that a special tax rule (section 1043 of the Internal Revenue Code) does not apply to divestitures made under this subchapter. Supervising ethics offices would have authority to require records, issue administrative subpoenas to financial firms, assess fees and penalties, collect unpaid amounts by offsetting federal pay or benefits, and refer suspected violations to Inspectors General or the Attorney General. Offices must publish each fine, why it was assessed, and the result.
Penalties in the bill include a daily fee of 10 percent of the fair market value of the violating portfolio for each day after the divestment deadline, accruing until compliance but capped at 50 percent of that value. A covered individual who purchases or trades in violation must pay the value of the investment, an additional $10,000, and disgorge any profits from the violating transaction. Penalties and disgorged funds go to the Treasury general fund for deficit reduction. The bill bars paying penalties with appropriated funds, certain Members' office allowances, or campaign contributions and other specified donations.
No publicly available information on estimated costs to implement or enforce this bill or on projected savings. The bill specifies that fines and disgorged amounts will be deposited into the Treasury general fund for deficit reduction.
No publicly available information.
No publicly available information.