Congress seldom has volunteered to require its members to disclose more of their finances.
Members of Congress have never been required to disclose their tax returns in public. For much of the Senate’s existence, members simply put their tax returns in sealed envelopes that were kept for private record. That was the extent of financial disclosure.
In fact, voters didn’t even choose members of the Senate for the nation’s first 137 years. Financial scandals early in the 20th century changed that, revealing conflicts of interest and patronage when state legislatures chose the wealthy or their surrogates to serve.
“Quite frankly, direct election didn’t change things,” Senate historian Donald Ritchie said. “It had some impact, but the first election, held in 1914, all the incumbents that were running got re-elected. The voters didn’t choose a different set of people than the legislatures did.”
Public pressure for greater financial disclosure returned at the end of World War II.
In 1946, there were revelations that key members of the House of Representatives and Senate agriculture committees had received inside information that they’d turned into profit by investing in commodities. That’s similar to the behavior of lawmakers during the 2008 financial crisis, who, after private meetings with Federal Reserve Chairman Ben Bernanke, took steps to protect their investments based on knowledge that the American public lacked.
President Harry S Truman pressed for financial disclosure, and a congressional report in 1951 offered a number of recommendations that were never adopted.
Financial scandal gripped the Senate again in the 1960s, but a bill requiring detailed financial disclosure was defeated in 1964.
It wasn’t until the Nixon administration’s Watergate scandal that Congress tackled a serious revamp of ethics rules, leading to the Ethics in Government Act of 1978, which prevails today.
After revelations that some members had cashed in during the 2008 financial crisis, Congress passed the Stop Trading on Congressional Knowledge Act this spring. It forces members to report online any financial transactions valued above $1,000 within 30 to 45 days of the transactions.