Former House Speaker Nancy Pelosi (D-CA) and her stock-trading husband Paul are alleged to have made quite a fortune from rather conveniently time transactions that some critics assert are based on advanced insider knowledge about impending legislation or regulation that is not typically available to the general public.

To be sure, Pelosi is not alone among members of Congress facing such allegations, but all of that could end thanks to legislation introduced by Sen. Josh Hawley (R-MO) that bears Pelosi’s own name, the Conservative Brief reported.

Furthermore, reports indicate that at least some congressional Democrats are supportive of Hawley’s legislation, or at least the general idea behind it, to prohibit members of Congress and their spouses from even appearing to benefit from transactions potentially based on insider knowledge.

The PELOSI Act

On Tuesday, Sen. Hawley issued a press release to announce the introduction of a bill dubbed the Preventing Elected Leaders from Owning Securities and Investments Act, or PELOSI Act.

“For too long, politicians in Washington have taken advantage of the economic system they write the rules for, turning profits for themselves at the expense of the American people,” Hawley said in a statement. “As members of Congress, both Senators and Representatives are tasked with providing oversight of the same companies they invest in, yet they continually buy and sell stocks, outperforming the market time and again.”

“While Wall Street and Big Tech work hand-in-hand with elected officials to enrich each other, hardworking Americans pay the price,” the Missouri senator added. “The solution is clear: we must immediately and permanently ban all members of Congress from trading stocks.”

Real prohibitions with real penalties

The PELOSI Act, if passed into law, would prohibit members of Congress and their spouses from “holding, acquiring, or selling stocks or equivalent economic interests” while serving in office, though it would allow them to hold less specific “diversified mutual funds, exchange-traded funds, or U.S. Treasury bonds” during their tenure.

Members and their spouses would have six months after taking office to either divest all of their holdings or place them in a blind trust, the Government Accountability Office would be authorized to conduct compliance audits of all members, and there would be real penalties for members found to have violated the law.

For those found to be in violation, any profits obtained would have to be forfeited to the U.S. Treasury while any losses suffered would be barred from being deducted from their tax returns. Furthermore, the ethics committees of the House and Senate would be empowered to levy additional fines and publicize any violations.

House Democrats had proposed similar legislation

Meanwhile, Moneywise reported in November that a number of House Democrats had supported somewhat similar legislation of their own but were frustrated that, despite initially signaling her support, then-Speaker Pelosi had essentially sat on the bill for months and prevented it from being brought up for a vote on the House floor.

That bill, known as the Combating Financial Conflicts of Interest in Government Act, would actually have had a broader reach than Sen. Hawley’s legislation, as in addition to members of Congress and their spouses, it would also apply to members’ children and staffers, federal judges and Supreme Court justices, Federal Reserve Board members, as well as the president and vice president and their families.

Like Hawley’s bill, that Democratic measure would also require that all individually traded “securities, commodities, futures, cryptocurrencies or other digital assets” be divested or placed in a blind trust, but would allow the continued holding of more passive assets like “diversified ETFs, diversified mutual funds, U.S. Treasury bills or bonds, state or municipal government bills or bonds,” or other things of that nature.

Is there enough support?

However, per the Moneywise report, there does appear to be one crucial difference between that prior Democrat-backed measure and the legislation introduced by Sen. Hawley — primarily that while Hawley’s bill includes real penalties for violators the previous House bill was criticized for lacking teeth and having built-in loopholes.

Now the question becomes, are there even enough supportive Republicans and Democrats combined in both the House and Senate who are willing to place financial constraints upon themselves in order to make Hawley’s PELOSI Act proposal a reality?