Preventing Elected Leaders from Owning Securities and Investments (PELOSI) Act

Key Points

• The HONEST Act would ban Members of Congress, the President, and the Vice President from buying, selling, or holding individual stocks, commodities, futures, and digital assets like cryptocurrency. Spouses and dependent children are also covered by the ban. They could still invest in diversified mutual funds and exchange-traded funds.
• Current officeholders would need to sell off their covered investments by the time they start a new term of service. New officeholders sworn in after the law passes would have to divest by the time they begin their term. A 90-day grace period applies for illiquid investments like private funds.
• The bill would shut down qualified blind trusts for covered officials. Trustees would be required to sell all covered investments in existing blind trusts and dissolve them. No new blind trusts could be created after 180 days past the divestiture deadline.
• Violations would carry steep financial penalties. Noncompliant officials would face fines equal to the greater of one month's pay or 10% of the value of each undivested investment, assessed every 30 days until they comply. Profits from illegal trades would also have to be given back to the U.S. Treasury.
• The bill creates a new public database for financial disclosure reports that would let anyone search, sort, and download data by filer name, asset, ticker symbol, transaction type, and more. It also raises the fine for failing to file required transaction reports under the STOCK Act to $500 per violation.
• Covered officials would get favorable tax treatment when divesting. The bill amends the Internal Revenue Code so that members of Congress, the President, and Vice President can use certificates of divestiture to defer capital gains taxes when they sell investments to comply with the law.