HR1756-119

What This Bill Does

The Stop Politicians Profiting from War Act restricts congressional financial interests in the defense industry. It defines covered defense contractors as persons with Department of Defense contracts or agreements, excluding higher education institutions and nonprofit medical treatment facilities, and covers securities, commodities, futures, bonds, derivatives, hedge funds, options, and other complex investment vehicles tied to covered defense contractors or defense industrial base entities. Members of Congress, spouses, and dependent children may not own or trade those interests except divestment. Current members and families generally must divest within 120 days, or 180 days for hedge funds, venture capital funds, or other privately held complex vehicles; new members and families face similar deadlines. Blind trusts do not count as divestment. Exceptions include diversified widely held funds, Alaska Native settlement stock, U.S. Treasury securities, government retirement plan funds, and diversified registered investment company funds. The Attorney General or Special Counsel can seek civil penalties up to $50,000 per violation, the tax code is amended to allow deferral treatment for required divestments, and House and Senate ethics committees must issue interpretive guidance.

Who Benefits and How

Government ethics watchdog organizations benefit from a direct ban on congressional defense contractor stock conflicts. Taxpayers concerned about defense procurement benefit if lawmakers have less personal financial exposure to defense contractors. Diversified retirement investors benefit because broad funds and government retirement plan investments remain permitted. Congressional ethics committees benefit from explicit guidance authority over undefined terms.

Who Bears the Burden and How

Members of Congress must divest covered defense contractor and defense industrial base financial interests. Spouses and dependent children of Members of Congress face ownership and trading restrictions. Defense contractor investors lose a direct-investment option while serving in or closely tied to Congress. Attorney General and Special Counsel offices must enforce civil penalties for violations.

Key Provisions

• Bars Members of Congress, spouses, and dependent children from owning or trading covered defense contractor interests.
• Requires divestment within 120 days, or 180 days for privately held complex investment vehicles.
• Provides that qualified or other blind trusts do not count as divestment.
• Creates exceptions for diversified funds, Treasury securities, government retirement plans, and Alaska Native settlement stock.
• Creates civil penalties up to $50,000 per violation and tax-deferral treatment for required divestments.