This bill prohibits Members of Congress, their spouses, and dependent children from owning or trading stocks, bonds, and other securities in defense contractors that have contracts with the Department of Defense. Current members must divest these holdings within 120 days of the bill's enactment (180 days for complex investments like hedge funds), while newly elected members must do so within 120 days of taking office. The legislation allows limited exceptions for diversified, widely-held investment funds and government retirement plans where members have no control over specific holdings. Violations can result in civil penalties of up to $50,000 per offense, and the bill provides tax relief by allowing members to avoid capital gains taxes on forced divestitures. The House and Senate ethics committees are tasked with issuing guidance on how the law should be implemented.
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