More than 2,600 executive branch officials have bought and sold shares of companies whose fortunes rise and fall on the policies their agencies enact, a Wall Street Journal investigation has found.
While controversy about insider trading by members of Congress has occasionally stirred major headlines, this phenomenon has quietly endured across Democratic and Republican administrations alike — and it involves more than 20% of senior officials among the 50 agencies covered by the Journal’s research so far.
The findings are based on the Journal‘s study of more than 31,000 disclosure forms filed between 2016 and 2021 by 12,000 senior career employees, presidential appointees and political staffers.
Some riskier trades — involving options and short sales, for example — were valued between $5 million and $25 million.
Though it’s illegal for officials to work on issues in which they have a direct financial interest — and though regulations even prohibit the mere appearance of conflicts of interest — the Journal found many such instances. For example:
“A top official at the Environmental Protection Agency reported purchases of oil and gas stocks. The Food and Drug Administration improperly let an official own dozens of food and drug stocks on its no-buy list. A Defense Department official bought stock in a defense company five times before it won new business from the Pentagon.”
Often, ethics officials have simply waived the rules, or certified that an official’s trade qualifies for an exception.
More than 40% of the Treasury Department’s senior officials traded in companies touched by their agency — the highest among the 50 agencies studies by the Journal. Treasury was followed by the Environmental Protection Agency, the Department of Defense, the IRS, SEC and the Fed — each of which had an above-average percentage of officials implicated.
Some agencies sought to thwart the Journal‘s scrutiny, and at least one is still stonewalling completely:
“Some [agencies] made it difficult to obtain the forms, and several agencies haven’t turned over all of them. The Department of Homeland Security hasn’t provided any financial records,” the Journal reports.
The Journal has indicated these initial revelations are just the start of an investigative series. For a deep dive into several examples of questionable trading by federal officials, read the Journal‘s first installment here.