Congressional candidates are using stock trades as a 2022 midterm weapon. But it's a double-edged sword that could hurt their own allies.

• There’s a ton of momentum behind a congressional stock ban.
• Some politicians, especially House Republicans, see this policy debate as a potent political weapon.

A battle over stock trading in Congress is consuming the 2022 midterms. It's providing fodder for press releases, fundraising, and opposition research. It has inspired powerful attack ads and even spawned Trumpian nicknames.

And campaigns on both sides of the aisle are salivating at the thought of bludgeoning their opponents for violating congressional stock trading laws or failing to support stock-specific government reforms.

"They smell blood in the water here, which in some ways is good," said Dylan Hedtler-Gaudette, government affairs manager at the nonprofit Project on Government Oversight, who said he hoped the political pressure and public outrage on the issue would result in Congress passing reforms.

The signs that the issue is taking off not just on Capitol Hill but in candidates' home turfs are increasingly widespread.

Among them:

• Republicans in New Jersey have taken to calling Democratic Rep. Tom Malinowski "Trading Tom" and "The Wolf of Washington" as the independent Office of Congressional Ethics found "substantial reason to believe" that he failed to properly disclose dozens of personal stock trades he made during 2019 and 2020. The National Republican Congressional Committee declared Malinowski will "pay the price … with his job next November."
• Rep. Alexandria Ocasio-Cortez, a Democrat of New York, sent a campaign fundraising email earlier this month asking her supporters to sign onto a stock trading ban.
• The Iowa Republican Party has chided Rep. Cindy Axne, a Democrat of Iowa, for her stock trading.
• "Pelosi folds!" read a fundraising email from GOP Sen. Josh Hawley of Missouri after House Speaker Nancy Pelosi announced Wednesday that she'd reverse her defense of congressional stock trading and support a ban. The Hawley fundraising email called it "bad news for Pelosi, who has gained outrageous wealth during her time in Congress," in reference to the millions of dollars in stock trades that her venture-capitalist husband, Paul Pelosi, has made.
• On the opposite end of the political spectrum, Shahid Buttar, a Democratic political activist and one of Pelosi's primary challengers, also pilloried Pelosi. "She has grown fantastically wealthy by leveraging insider information to game the markets, and has embraced reform only after viral news cycles observing the corruption she has embodied for decades," he said.

But as these candidates play politics with stock ban policy, irony lurks: Numerous members of both parties have been guilty of violating the decade-old Stop Trading on Congressional Knowledge Act, or STOCK Act, by failing to routinely report their stock trades. Others have held stock in companies that clash with their public responsibilities or stated orthodoxies, or sat on committees that directly oversee the activities of companies in which they hold shares.

"Very few people have clean hands on this stuff," Hedtler-Gaudette said.

On Capitol Hill, a bipartisan group of lawmakers is actively pushing reforms, having introduced several different bills and resolutions that would, to one extent or another, curb the ability of lawmakers — and potentially, their family members and senior aides — from trading individual stocks.

Congress' top bosses say they agree with a stock trading limit after rank-and-file members squeezed them on the issue and polling shows it's popular with most voters.

Republicans are campaigning as though they have an edge on the issue even though they haven't been any better about abiding by the law. Yet the political reality is that several Democratic STOCK Act scofflaws are running for re-election in vulnerable House districts.

They include Malinowski and Axne. Republicans also are angling to attack Reps. Kim Schrier of Washington, Brian Higgins of New York, Mikie Sherrill of New Jersey, and Susie Lee of Nevada in stocks. The GOP has also hit Sean Patrick Maloney of New York, who's almost certain to win re-election, but chairs the Democratic Congressional Campaign Committee.

This week, Rep. Elaine Luria, a Democrat of Virginia who's running in a competitive district, told Punchbowl News that congressional stock ban proposals are "bullshit" — something that will likely open her up to Republican attacks.

"Everyone running from the minority knows good government sells," said one national GOP strategist who asked not to be named in order to speak candidly about the party's strategy.

Left unsaid in these district-level attacks is that Republicans have STOCK Act lawbreakers in their own ranks. Reps. Diana Harshbarger of Tennessee, Blake Moore of Utah, Kevin Hern of Oklahoma, and Pat Fallon of Texas were among the Republicans who were late reporting numerous, high-dollar stock trades.

But all of them are running for re-election in decidedly red districts where Democrats have little chance of winning. STOCK Act-related attacks, therefore, are unlikely to politically damage these lawmakers.

Republicans plan to keep hammering their opponents on STOCK Act violations regardless of whether Congress sends a stock-ban bill to President Joe Biden's desk.

"Voters will be informed of Cindy Axne, Tom Malinowski, Kim Schrier, and Sean Patrick Maloney's corrupt violations of federal law whether Congress passes a bill or not," said Mike Berg, spokesman for the National Republican Congressional Committee.

The Democratic Congressional Campaign Committee did not respond to Insider's inquiries about how it might highlight the STOCK Act violations of Republicans or push back against GOP attacks. Representatives for Pelosi and Malinowski did not immediately respond to requests for comment.

Georgia races sparked interest in running on stock trading limits

Whether it's Democrats or Republicans, minority parties often take on good government causes — at the expense of their opponents — to fire up voters.

For example, House Republicans more than a decade ago campaigned against earmarks, which allow Congress to funnel federal dollars to specific projects in individual districts.

These days, the latest push on stock trading comes after Democrats have so far failed to fulfill their own government reform promises to expand voting access and reform campaign finance practices.

It also has been fueled in part by "Conflicted Congress," a 5-month investigation published in December by Insider that uncovered numerous financial conflicts of interest and widespread violations of the STOCK Act.

The 2020 US Senate campaigns in Georgia showed that embracing a stock act ban was a winning political message, according to Insider interviews with more than a dozen congressional aides and political strategists.

Democratic Sens. Jon Ossoff and Rafael Warnock won their seats in Georgia after they repeatedly skewered their Republican opponents, then-Sen. Kelly Loeffler and David Perdue, over their personal stock portfolios. Financial disclosures showed Loeffler and Perdue dumped millions of dollars in stocks after receiving private briefings about the coronavirus pandemic.

Ossoff and Warnock hammered a message that Perdue and Loeffler were more interested in their financial portfolios than in representing the people who had voted them into office. Politico reported at the time that Democratic political action committees spent millions of dollars amplifying the same message.

"This really came down to: Did voters trust the two senators in Washington who were there representing them? This was the clearest example that they could not," said Jonae Wartel, who was the runoff director for the Democratic Party as the Georgia Senate races came to a close.

"What the 2020 runoff really showed us is that voters are in tune with the issues that matter," added Wartel, who is currently vice president for elections and advocacy at More Than a Vote and managing director at the Arc Initiatives. "They want ethical leaders that are transparent. They want leaders to put them first."

The messaging did more than deliver the seats to Ossoff and Warnock. It allowed Democrats to achieve the fragile majority they needed to pass a $1.9 tillion coronavirus relief package, an infrastructure law, and confirm most of Biden's nominees with fewer concerns about GOP obstruction. Now, Democrats also have the chance to confirm a Supreme Court justice without any Republican votes, should they so need.

Candidates running in the 2022 midterms are banking that the very same tactics can be just as potent this round, regardless of which party is firing them off.

"It's something we have been hitting on doors about and hitting voters with nonstop," John Henry Isemann, one of the Republicans running to unseat Malinowski, told Insider in an interview.

Isemann called Malinowski the "poster boy" for the issue.

Isemann wants Republicans to keep pushing for ethics changes even though he acknowledged Republican members of Congress also have been guilty of violating the STOCK Act. He'll support a ban if elected, he said, because it would help "change the culture of Congress.

"For me it's been a really salient story every step of this race," he said of running on government ethics, adding: "People are getting rich from being members of Congress. That's a simple sentence for people to understand."

Democrats hitting Democrats on stocks

Among Democrats, several newcomers are specifically running on ethics reform promises, such as Mckayla Wilkes, who is trying to unseat Democratic Majority Leader Steny Hoyer, and Lucas Kunce, who is running for Republican Sen. Roy Blunt's seat in Missouri, which Blunt is vacating.

Both campaigns have paid for stock-ban-themed campaign ads on Facebook, according to Facebook's political advertising database.

Wisconsin US Senate candidate Tom Nelson, a county executive running in a crowded Democratic primary to unseat vulnerable GOP Sen. Ron Johnson, released a political ad this week accusing members who trade stocks of "taking advantage of insider information to enrich themselves."

Johnson himself hasn't violated the STOCK Act, though Insider reported one of his top aides wasn't properly filing mandatory disclosures. On Facebook, Nelson's campaign blasted the two-term senator's government position on stock trading. Nelson has also criticized Democratic leaders for what he considers to be their slow embrace of a stock ban.

Johnson's office said he was wary of legislation that would dissuade people from the private sector from going into public office.

Only one Senate Democrat that's up for re-election this year has violated the STOCK Act — as has only one Republican, Sen. Rand Paul of Kentucky.

That Democrat, Sen. Mark Kelly of Arizona, was late reporting a stock liquidation while he was in the process of moving his assets into a blind trust where he'd no longer have control over them. Now he's not only urging users on Facebook to support a stock trading ban but has introduced legislation alongside Ossoff to prohibit individual stock trades.

Malinowski, too, moved his assets to a blind trust and urged House colleagues to support a trade ban. Several other members of Congress who trade individual stocks have pledged to support a limit or ban.

"I'm glad this is happening," Hedtler-Gaudette said of all the Capitol Hill activity on congressional stock trades. "And if it's happening because people see political opportunities and advantages of doing it, that's OK as long as we end up with strong policy."