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Minnesota politicians come up in NY Times stock story

Three Democrats had indirect stock transactions connected to industries affected by committees they serve on in Congress.

MINNEAPOLIS — Three members of Minnesota's congressional delegation were flagged in a New York Times report that sifted through financial disclosure ethics filings to look for stock transactions with companies affected by committees the members serve on in Congress.

The three Democrats -- Sen. Tina Smith, Rep. Dean Phillips and Rep. Angie Craig -- didn't make direct stock trades themselves. But, under federal rules, they were required to disclose the transactions to guard against possible conflicts.

In fact, Rep. Craig has been working for three years on a bill that would bar members of Congress and their immediate family members from buying or selling stocks while they serve in DC.

"I thought I was doing a great job by selling my stock before I came into Congress, but I did get flagged in the New York Times and anyone who has teenagers may understand this," Craig, who represents Minnesota's 2nd District, told KARE.

"I didn't know my 19-year-old was day trading, and trading stocks when he was in his sophomore year in college, and when I found out, I reported it in the ethics disclosure, because that's what's required."

While Craig sold her stocks before taking office, she was one of 97 representatives or senators listed in the New York Times analysis. The newspaper pointed out that she was serving on the House Transportation Committee in 2019 at the same time one of her sons bought Ford and Lyft stock.

Her son lost money on his transactions, according to Craig, but she's still gunning hard for her bill that would outlaw stock trading by active members of Congress, their spouses and dependent children. She said she's hopeful the bill will be taken up and passed in some form in the next month.

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"As a member of Congress, I have access to information the public doesn't. Information moves markets," Craig said. "We've got to stop this practice because we've got to build confidence in our elected officials and that we're there for the right reasons, and that's just to serve our community."

In the case of Senator Tina Smith, the Times noted her husband Archie bought stock in an insulin equipment maker at the same time Smith had a bill to lower the cost of insulin. The newspaper said it's unclear how Smith's bill would've affected the value of her husband's stock, which he bought when the market was at a low point.

Smith told KARE that her husband's profession and income is separate from hers.

"Like a lot of families, my husband Archie and I have two very different jobs - and we keep them completely separate," her statement read.

"Archie's job is to invest in medical device companies, which he has done most of his career since we moved to Minnesota in 1984. I do not know about and have absolutely no role in any of his investment decisions."

The NY Times found that Congressman Dean Phillips reported stock transactions with banking companies, including Wells Fargo, at the same time he was on a House committee that was investigating consumer complaints about Wells Fargo. 

Rep. Phillips noted he hasn't directed any stock transactions since going to Congress in 2019.

He took to Twitter to say:

"I don't trade stocks and haven't had contact with my advisors since 2018. My assets are in a 'blind trust,' meaning I can't see what is bought and sold on my behalf."

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A spokesperson for Phillips said the 3rd District Congressman paid a lot of money out of pocket paying lawyers to set up the blind trust. That may explain why he's currently one of only a handful of elected officials who've gone that route.

Once those stocks are in a blind trust, the owner has no control of what investments are made and isn't allowed to know who is running the trust and making those decisions.

Phillips supports a bill by Congresswoman Abigail Spanberger of Virginia, that would require all members to put their stock holdings in blind trusts. She has cited Phillips as an example of members who have gone the extra mile to separate their political work from their financial lives.

Spanberger points to the case of North Carolina Senator William Burr, who drew the attention of the Justice Department in 2020. Burr avoided $87,000 in losses by unloading stocks after a private briefing on the coronavirus pandemic.

"My view is that we need to make sure our constituents know we're here to serve them and only them," Craig explained.

"This is why we need to ban members of Congress and their spouses from doing this, and we need to make sure their dependent children know they can’t trade individual stocks."

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