Ever wondered how insider trading impacts the laws that shape our lives? Well in today’s episode I’m diving deep into a conversation that could reshape our democracy. I sat down with Oregon’s U.S. Senator Jeff Merkley to discuss the urgent need to ban congressional stock trading—a practice that not only undermines our trust in government but also impacts our daily lives more than you might think.
Key takeaways:
- Importance of local elections: Local politics directly impact daily life, including schools, taxes, and community wellbeing. Positions like school board members and coroners have significant influence over community resources and justice.
- The ETHICS Act and congressional stock trading: The ETHICS Act aims to ban congressional stock trading to prevent conflicts of interest and insider trading. Senator Merkley highlights how current laws are insufficient and how stock trading by lawmakers undermines public trust.
- Challenges in passing legislation: The procedural hurdles in the Senate, including the filibuster and partisan gridlock, make it difficult to pass reforms like the ETHICS Act. The influence of wealthy individuals and special interests often hinders legislative progress that benefits the general public.
- Impact of financial corruption on democracy: Legalized corruption allows elected officials to prioritize personal gain over constituents’ needs. This undermines democracy and leads to policies that favor the powerful over ordinary Americans.
- Citizen engagement and taking action: Both Tori and Senator Merkley emphasize the power of individual actions like voting, advocacy, and volunteering. Encouraging listeners to hold lawmakers accountable and participate in the democratic process to drive change.
Notable quotes
“The Senate has become deeply dysfunctional in ways that favor the powerful over the people.”
“We need to restore a system where every Senator has a voice, but not a veto.”
“When lawmakers serve their portfolios over the people, it’s a corruption of the public purpose.”
Episode at-a-glance
≫ 00:33 The importance of local elections
≫ 04:56 Senator Merkley’s first money memory
≫ 08:39 The Ethics Act explained
≫ 14:05 Challenges in passing the Ethics Act
≫ 18:44 Trump’s cryptocurrency and dark money in politics
≫ 21:06 Final thoughts and call to action
Senator Merkley’s links:
Learn more about the ETHICS Act
Learn more about the End Hedge Fund Control of American Homes Act
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Meet Senator Merkley
Oregon’s U.S. Senator Jeff Merkley has spent his career taking on the powerful to serve the people. In the Senate, he leads the fight to ban Congressional stock trading for more than a decade. He is committed to advancing his Ending Trading and Holdings in Congressional Stocks (ETHICS) Act, as well as filibuster reforms, to make the Senate work again for ordinary Americans. Senator Merkley has also been a long-time leader on addressing the housing affordability crisis. Having previously led Portland’s Habitat for Humanity, he knows what it means to families to be able to afford a safe home in their community. Senator Merkley has been called Oregon’s “Roots and Boots Senator” because of his deep Oregon roots and his boots on the ground. In the Senate, he’s laser-focused on building the four foundations of success for working families: good health care, quality education, decent affordable housing, and good-paying jobs.
Transcript:
Senator Jeff Merkley:
There’s really two forms of corruption here. One is we’re getting information the public doesn’t have, so essentially insider trading. We shouldn’t be trading stocks because that is unfair. Time and time again, you see results where members of Congress do a little better than the general public on their stock trading. Maybe it’s because we get better information sooner that the public doesn’t have.
Tori Dunlap:
I know you’re getting a lot of election content, but you got to stay with me. We’re just going to kick it right off. There’s no intro needed, you know who I am, you know what the show is. Okay.
Here’s the thing. We talked about it many times here on the show before, on our social media platforms, but it is worth nothing again. We’re in the midst of election season. I don’t have to tell you that, we all know that. However, the presidential election is the sexy election. It’s where all of the media goes to, it’s where all of the publicity happens. That is the election most of us think of when we hear the word election. Super important. Who we elect to be president is incredibly important. Please register to vote, vote.org.
And also, indent, new paragraph. Here’s the thing. If we want to actually be represented as individuals and as a community, if we want to have policies in place that actually affect our day-to-day wellbeing, and the ability for more national leaders to get stuff done, our local elections, I would argue, are as much if not more important. The president cannot do the things they’re trying to do if they House of Representatives and the Senate is also not supporting those policies.
We’ve had Amanda Litman on the show, I highly recommend listening to that episode. She talked about how important it is at the hyper-local level to maintain and to vote for your school board because they determine what kind of education your children are getting. Coroners, fun fact, are often an elected position. That blew my mind when she said it. And that coroner, especially in 2020, decided how many people actually died of COVID and what the cause of death was, and therefore how many ventilators or how many vaccines were rolled out in that county. But also, if a Black man were to die at the hands of the police, the coroner decisions what the cause of death actually was.
These things are extremely relevant to us, to our tax dollars, to our schools, to the way we live our lives. With elections in full swing right now, yes, please dear God, vote in the presidential election. If you’re in a swing state, God, I need you to vote. Any Pennsylvania folks listening right now, I know you’re getting all the ads, you’re getting absolutely barraged. I know. Fuck the Electoral College. Our life is in your hands, Pennsylvania. And also, local politics are as important if not more so, but they don’t get the media coverage. They don’t get all of the sexy parts.
I’m really, really excited to talk with our guest today, who is an incredible Senator from Oregon. Oregon’s US Senator Jeff Merkley has spent his career taking on the powerful to serve the people. In the Senate, he leads the fight to ban Congressional stock trading for more than a decade. He is committed to advancing his Ending Tradings and Holdings in Congressional Stocks, which is called the ETHICS Act, as well as filibuster reforms, to make the Senate work again for ordinary Americans.
Senator Merkley has also been a longtime leader on addressing the housing affordability crisis. Having previously led Portland’s Habitat For Humanity, he knows what it means to families to be able to afford a safe home in their community. He has also been called Oregon’s Roots and Boots Senator, because of his deep Oregon roots on his boots on the ground. In the Senate, he’s laser-focused on building the four foundations of success for working families. Good healthcare, quality education, decent, affordable housing, and good paying jobs.
In our time together, we discussed how politicians have been able to legally use a form of insider trading to line their own pockets. Yuck. No, thank you. How this legalized corruption leads to elected officials who continuously disenfranchise their own constituents, and what we can do to see legislation like the ETHICS Act passed, and hold our lawmakers accountable. Let’s do it. Let’s listen.
But first, a word from our sponsors.
We’re so excited to have you. Thanks for being here.
Senator Jeff Merkley:
Oh, I’m delighted to be with you. Thanks for the invitation.
Tori Dunlap:
One of our favorite questions to ask folks, because it’s a financial podcast, is what is your first money memory? What is the first time you remember thinking about money?
Senator Jeff Merkley:
My first memory is when my sister was able to open a bank account, because she had learned to write her name. My mother said, “Well, if you learn to write your name, you can open a bank account, too. The Umpqua Bank will give you a little bronze Chieftain piggy bank that you can put your coins into.” I thought, “Well, that’s pretty cool.” I spent the rest of the day learning to write my name so I could go down and sign up for a bank account.
Tori Dunlap:
I was an Umpqua Bank user as well in the early days, because I’m also from the Pacific Northwest. You said that and I was like, “Yeah, Umpqua. Know it.”
Senator Jeff Merkley:
Did you get a bronze piggy bank?
Tori Dunlap:
I did not get a piggy bank. I feel like I missed out.
Senator Jeff Merkley:
Oh, you did.
Tori Dunlap:
Yeah. I’ll have to find one. I love talking to any sort of representative, but especially, we’ve been joking internally as a team, that the best politicians are the ones who never planned on being politicians. You’re called the Roots and Boots Senator. You were what people would consider an average American before diving into politics.
Can you talk about what that defining moment was for you when you were like, “I want to run, I want to do this?”
Senator Jeff Merkley:
I was running a local affiliate for Habitat For Humanity. I was proceeding to lobby the City Council to say, “Hey, you’re spending all your money on the city downtown. Why aren’t you spending more on the neighborhoods? They’re really being neglected, and that’s where the quality of life comes in.” None of them were interested because they had to run city-wide. Their money came from developers to run their campaigns, so the developers decided how the city money was spent.
I thought, “If I’m going to be effective on affordable housing, maybe I should be on the other side of the table.” Instead of the advocate coming and saying, “Dear Mayor, Dear City Counselor, don’t you think we should be doing this?” What if I’m in their seat, and I can drive much more action? That’s when I started thinking about running for what turned out to be the State House.
Tori Dunlap:
Do you feel like you’re even better at your job because you do understand maybe what it’s like for the average American and what it means to be a civil servant, as opposed to people who maybe have existed their entire career in politics?
Senator Jeff Merkley:
Well, I think it is. There’s several things, I think, that are valuable. One, I come from a little, tiny mill town. I come from rural Oregon. Our family moved after an investor bought the stock to the company, and then overnight, sold it to a bigger company. Made a profit, but immediately shut down the mill. Oh. We moved to a bigger rural town of Roseburg, Oregon. Still timber country. When jobs weren’t prevalent there, my dad, he was a mechanic and he said, “Maybe I should look in a bigger market where the jobs don’t keep disappearing. I’ve got to raise a family now.” We moved to the larger city.
I think that rural background, and the fact that my family’s a blue collar family. Familiar with the challenges that families were facing on healthcare, and housing, and education makes a big difference. I must say, right now, I’m dismayed by the number of billionaires that the Republican Party is recruiting in key states to run for the Senate in the states like Ohio, and Pennsylvania, and Maryland, and Montana, where folks who are billionaires, they want to lower the taxes of fellow billionaires. As opposed to the fundamentals for families to thrive.
Tori Dunlap:
Speaking of a lot of that, one of the biggest reasons we wanted to talk today is to talk about the ETHICS Act. This is a pretty ambitious piece of legislation. For those of us that are just learning, can we break down what the ETHICS Act would do, and why it’s such a crucial step in addressing conflicts of interest?
Senator Jeff Merkley:
This came up when the members of Congress, House and and Senate, were trading stocks. Folks said, “Well, it looks like they’re privy to inside information.” Let’s write a new bill that says members of Congress, who are already covered by the existing bill against insider trading, let’s restate it in a new bill. I said, “Well, okay. Two things wrong with that.”
One is we’re not actually making a difference because we’re already covered by the old bill. But the second problem is insider trading is essentially extremely difficult to document, track, and prosecute. Because who knows how somebody learned about something? Even I hear information all the time, I have no idea if it’s inside information or if it’s already in the public realm. Somebody’s talking about what they’re planning to do three to six months from now. This has just come up, time and time again.
I said, “No, we shouldn’t actually be trading in stock,” because there’s really two forms of corruption here. One is we’re getting information the public doesn’t have, so essentially insider trading. We shouldn’t be trading stocks because that is unfair. Time and time again, you see results where members of Congress do a little better than the general public on their stock trading. Maybe it’s because we get better information sooner that the public doesn’t have.
I really feel the second piece is even more corrupt. That is while you are writing legislation or voting on amendments, you’re thinking, “Oh, will this help renewable energy? I hold a bunch of renewable stocks. Will this help fossils? I have a bunch of fossil stocks.” In other words, it’s corrupting, you’re serving your portfolio rather than the public.
On both these basis, the unfair advantage in information, but the corruption of your service to the people, both levels, it’s unacceptable. That’s why Sherrod Brown and I proceeded to introduce that amendment. We only had 30-some votes in support of it. That was a long time ago, over a decade ago. But slowly, we’ve been building support for this concept, this recognition that is a really a corruption of the public purpose for members to be trading in stocks.
Tori Dunlap:
Well, you mentioned a lot of the Republican push to either get billionaires into office or allow billionaires to influence the campaign. Was this an act that received bipartisan support?
Senator Jeff Merkley:
Well, we do have bipartisan support in the House, and we have one Republican Senator in support of the bill, Josh Hawley. That’s progress. But in general, every time we’ve pursued this, the leader of the Republican side, Mitch McConnell, has discouraged his members from supporting it.
Why is that? Well, if you want to recruit someone like David McCormick, who is a billionaire hedge fund executive, or Eric Hovde, who is running in Wisconsin, and he was a banker to the hedge funds, and equally right up there at a similar level. Well, these folks have enormously complex financial lives. They want to be trading in stocks, and on the exchange stocks, probably off the exchange stocks. Who knows? The last thing they want to do is to stop serving their personal portfolio. It’s what they’ve done for a living. How is he going to recruit these billionaires, these self-financing candidates, if they can’t trade stocks? He’s squelched it.
Tori Dunlap:
Well, you mentioned the Stock Act that was supposed to curb insider trading by just requiring this disclosure of stock trades by lawmakers. Why hasn’t that been enough? And then, why does the ETHICS Act address those issues?
Senator Jeff Merkley:
Well, a couple things. Disclosure is good, so that’s fine. That’s advantageous. But that disclosure comes after the act.
Tori Dunlap:
Yeah.
Senator Jeff Merkley:
How are you going to go back and tie that act to the type of information somebody heard in a meeting? They’re raising money, they’re asking somebody to donate to their campaign, and they say, “Oh, by the way, we’re working on this merger with such-and-such a company.” Or, “We’re working on this new invention.”
I’ve heard about some really cool, almost sci-fi style inventions from people when I’ve been out raising money. They’re like, “Now, this is under wraps right now.” I’m like, “Yeah, well, this is why I shouldn’t be trading in stocks.”
Tori Dunlap:
It’s still information.
Senator Jeff Merkley:
I don’t know if the public has the same information.
Tori Dunlap:
Yeah.
Senator Jeff Merkley:
Yeah. It didn’t work, in part, because many people didn’t report in a timely fashion. The fees have been minimal consequence for anyone of substantial means when they are fined. Disclosure is useful, but it doesn’t stop you from getting that information in advance, or thinking about your portfolio while you’re voting or writing legislation.
Tori Dunlap:
You’re mentioning the resistance to this. We know how difficult it is to pass any sort of legislation. If the ETHICS Act doesn’t pass as a standalone bill, how would you plan to push it through as part of other legislation? What are the chances that it becomes law during this session?
Senator Jeff Merkley:
Let’s start with the challenge of getting a standalone bill to the floor. This requires, in the Senate, a procedure called cloture, which means you are closing debate over whether to bring it to the floor. Which means that any one person can force you to spend a week debating whether to bring a bill to the floor. Then once it’s on the floor to close, debate, and hold a vote, you again need a super majority of 60, as long as one Senator insists that you go through the formal rules.
Now these rules were set up with the idea that there would be very rare … The social contract was simple majority. And that this provision of several days of debate on whether something comes to the floor, several days of debate over closing debate, and influence on the floor, these obstacles would be so rare. It happened once a year, because the underlying ethic was we are a legislature where the majority makes the decisions, not the minority. But as the tribal partisanship has increased, the minority party has preceded to say, “We can use this rule to prevent the majority from ever getting anything done. They can’t put the bill on the floor. And if they get it on the floor, they can’t get it to a vote. Hey, we can paralyze them. Why not? Our constituents would like us to paralyze that other party.”
Tori Dunlap:
Yeah.
Senator Jeff Merkley:
This is why we’ll never make it as a standalone bill.
Now, that means the only way to do this is as an amendment. Okay, so here we hit a second challenge. That is all 100 Senators have to agree to allow an amendment to be debated and voted on. If you have the Republican leader saying, “No. This will kill our efforts to recruit some billionaire to run for office,” you’re not going to get 100 Senators agreeing.
That brings me to then, is there any path? Well, here is the path. There has to be a moment in which the Republican Party wants something so badly to be debated that I can hold that hostage in order to get a vote on the ETHICS Act. That’s the moment this can happen.
If this sounds like an incredibly dysfunctional Senate to your listeners, your listeners are correct. The Senate has become deeply dysfunctional in ways that favor the powerful over the people. It’s driving frustration and cynicism. It’s why we are not more successful in acting on numerous issues involving what I call the four foundations for a family. Healthcare, housing, education, a good paying job. America is being poorly served by this system in the Senate.
Tori Dunlap:
Yeah. I don’t even know how to … I’m just like, “Oh, boy.”
Senator Jeff Merkley:
I went a long ways from the question you asked there.
Tori Dunlap:
No, no, no. It’s an important conversation. I just want to talk about, really quickly, if there is somebody listening, and I’m thinking this, of, “Okay, this does sound like total dysfunction. What can I do about it” If I want this legislation passed, what can I do at the local level to advocate for it?
Senator Jeff Merkley:
Well, one is to create momentum. The House of Representatives doesn’t have a super majority.
Tori Dunlap:
Right.
Senator Jeff Merkley:
Push your local House member to vote for. Second is advocate for a reform called the Talking Filibuster. If anyone really wants to delve into it, I wrote a whole book on it last year called Filibustered. The point of this book is the Senate is broken, and if we’re going to serve the people, we have to fix this system. Hey, here is a reform that would leave a significant voice and leverage with the minority, but not a veto. It’s pretty simple and straightforward. If you want to delay a vote, you have to hold the floor continuously. When there’s a break in the debate or everyone’s exhausted their two speech rule, then we get to vote on a bill. The minority can hold up something for weeks, it gives them leverage. The majority doesn’t want to be held up for weeks, so that makes them cooperative on a compromise. But if there’s no compromise, you can eventually get to a vote.
On small bills, if you have to hold the floor continuously, if the debate starts on a Thursday night, by midnight it’s over. You come in on Monday and vote on a small bill. We would restore the balance in which every Senator has a voice, but not a veto.
Tori Dunlap:
Yeah. Very topical. As we’re recording this today, Former President Donald Trump has launched his own cryptocurrency platform. I just want your thoughts about it. How do you feel? We’re 50 days before the election. One of our candidates is launching a new, I can say it, a new scheme, a new scam. How do you feel?
Senator Jeff Merkley:
Well, it just sounds so sleazy to me. I think about other enterprises he’s been involved in where he refuses to pay his subcontractors. Then he says, “I can fight you in court for 10 years. I’ll pay you pennies on the dollar, but you have to sign a non-disclose agreement.” Or his university, where it didn’t teach anybody anything, it was a massive scam.
But now, crypto raises some important questions here, of judgement. The first is you want to be leader of the Free World. There’s huge, complex issues we’re dealing with. Shouldn’t you be really diving in and understanding those issues? How you can take the world forward and making your case to the public, not launching some I want a profit for myself side scheme. So, there’s that.
But then, there’s also the fact that the biggest contributors to dark money in this election cycle is the crypto community. They are trying to buy Congress the same way the fossil fuel community buys Congress, the same way Wall Street or the drug companies buy Congress. They’ve done it in more bigger numbers, more cash than any other interest group in America this cycle. Here is Trump, pandering to them. Essentially saying, through launching his World Liberty Financial crypto, “Hey, I’m going to be all in on crypto. Spend your money on the Republican candidates.” It has not gone unnoticed in that context.
I could say more about my concerns about crypto. I held the first-ever crypto hearing when I was a member of the Banking Committee, and had control of the subcommittee. The big issue that came up was on how it facilitates organized crime and money laundering. It also comes up now in our state, my home state of Oregon, a lot in terms of the amount of electricity it’s eating up. Which is a huge problem, if you’re worried about climate change and having enough renewable energy to power the planet without destroying it. There’s a lot of pieces of his little crypto announcement.
Tori Dunlap:
Senator, to wrap up our time together, why does your legislation in addressing corruption, especially financially, matter so much for a lot of our listeners, who are women and who are young people?
Senator Jeff Merkley:
I came to the Senate as an intern, where every Senator had a superpower. Which is they could put any amendment up, argue that this is good or bad for America. Of course, they were putting it up and saying it’s good for America to be voted on. That’s the Senate I believe in. That’s the republic I believe in. But right now, what we’re facing is a system that’s being damaged by many forces. One is the dark money, and that’s the Citizens United decision that said, “Hey, you and I, if we donate more than $200, we’re fully disclosed to the public,” so we’ll get a million text messages afterwards. I’m sure your listeners are getting a ton of those in this election cycle.
But if you’re a billionaire-
Tori Dunlap:
I think I got three while we were talking.
Senator Jeff Merkley:
Oh, there were go. I have my phone at a distance so it wouldn’t be dinging every time you asked me a question.
We have that challenge of the dark money being anonymous in our campaign system. We have the problem of the minority having a veto in the Senate. We have the fact that the wealthiest folks in America that want influence, well, they have lobbyists. Ordinary people don’t. None of the folks back home in the mill town I grew up in have a lobbyist. The powerful have lawyers. They have media campaigns. They have regular donations. They have dark money donations. If all that fails, they have a filibuster. In other words, they have all these tools.
Now, here’s one more piece of corruption on top of all of that, where affluent people are coming here, and while they should be working for their people, they’re working for their portfolio. That’s unacceptable. That’s why we need to ban stock trading by members of Congress.
Tori Dunlap:
I couldn’t agree more. Senator, thank you for your time today. I really appreciate it.
Senator Jeff Merkley:
Our pleasure being with you. Thank you.
Tori Dunlap:
Thank you, to US Senator Jeff Merkley, for his work and for supporting our show by coming on. We really appreciate it. It was such an incredible conversation. Please vote, vote.org. Call your legislators. Donate to causes, and organizations, and legislators you believe in. Have hard conversations. Volunteer! I phone bank almost every weekend. You can do this at votesaveamerica.com. That’s the easiest way to get signed up. There are ways that you can contribute beyond just voting if you feel helpless.
That’s my quick little hack for you, by the way. Every time I have felt helpless … It happened this morning. I had a whole meltdown with our team this morning about a lot of things, but including the election. Every time I’ve felt helpless, and every time I feel like, “My vote’s not going to matter,” or, “I wish there was more I could do,” I do more. I sign up to phone bank for even a half hour. I donate a little bit of money. I post on social media. There are things you can do, especially if you’re really, really nervous about what’s going to happen in the coming weeks.
As of this recording, we have less than 50 days until the election. That’s going to be even less by the time this comes out. Please register to vote. Make sure you check your registration, vote.org. Thank you again to Senator Merkley for being here. Thank you for your support of this show. Yeah, that’s it. Have a great day. Bye, everybody.
Thank you for listening to Financial Feminist, a Her First $100K podcast. Financial Feminist is hosted by me, Tori Dunlap, produced by Kristen Fields and Tamisha Grant, research by Sarah Sciortino, audio and video engineering by Alyssa Midcalf, marketing and operations by Karina Patel and Amanda Leffew. Special thanks to our team at Her First $100K, Kailyn Sprinkle, Masha Bakhmetyeva, Taylor Chou, Sasha Bonnar, Rae Wong, Elizabeth McCumber, Claire Kurronen, Daryl Ann Ingram, and Meghan Walker, promotional graphics by Mary Stratton, photography by Sarah Wolfe, and theme music by Jonah Cohen Sound.
A huge thanks to the entire Her First $100K community for supporting the show. For more information about Financial Feminist, Her First $100K, our guests and episode show notes, visit financialfeministpodcast.com. If you’re confused about your personal finances and you’re wondering where to start, go to herfirst100k.com/quiz for a free personalized money plan.
Tori Dunlap
Tori Dunlap is an internationally-recognized money and career expert. After saving $100,000 at age 25, Tori quit her corporate job in marketing and founded Her First $100K to fight financial inequality by giving women actionable resources to better their money. She has helped over five million women negotiate salaries, pay off debt, build savings, and invest.
Tori’s work has been featured on Good Morning America, the New York Times, BBC, TIME, PEOPLE, CNN, New York Magazine, Forbes, CNBC, BuzzFeed, and more.
With a dedicated following of over 2.1 million on Instagram and 2.4 million on TikTok —and multiple instances of her story going viral—Tori’s unique take on financial advice has made her the go-to voice for ambitious millennial women. CNBC called Tori “the voice of financial confidence for women.”
An honors graduate of the University of Portland, Tori currently lives in Seattle, where she enjoys eating fried chicken, going to barre classes, and attempting to naturally work John Mulaney bits into conversation.
