Restore Trust in Government Act
- Sponsor
- Rep. Magaziner, Seth [D-RI-2]
- Committees
- Ways and Means Committee (primary)
- Last action
- Dec 16, 2025
Bottom line
The "Restore Trust in Government Act" aims to eliminate potential conflicts of interest by banning stock ownership and trading by high-ranking federal officials and their immediate families, requiring divestment and imposing financial penalties for non-compliance.
What it actually does
This bill prohibits Members of Congress, the President, Vice President, and their spouses and dependent children from owning or trading individual stocks, commodities, futures, and similar synthetic financial interests. It mandates divestment of existing holdings within 90 to 180 days, with specific exceptions for diversified funds, government bonds, small businesses, and certain family trusts. Violations incur a 10% fee on the investment value and disgorgement of profits, with public disclosure of penalties.
Proponents argue
Proponents argue that this bill is essential to restore public trust in government by removing any appearance of impropriety or insider trading. They contend that elected officials and their families should not profit from information gained through public service, ensuring that policy decisions are made solely in the public interest, not for personal financial gain.
Opponents contend
Opponents might argue that such a broad prohibition is overly restrictive, infringing on the financial privacy and investment rights of public servants and their families. They may contend that existing ethics laws, such as the STOCK Act, are sufficient and that a blanket ban could deter qualified individuals from seeking public office due to the significant financial burden and loss of investment autonomy.
The bill is relatively short and clearly structured, making it accessible for an informed reader to understand its core provisions and implications within a reasonable timeframe.
Section 2, amending 5 U.S.C. Chapter 131, Subchapter IV, Sec. 13152(a)
Ban on Stock Ownership and Trading for Covered Individuals
This provision establishes a direct prohibition on Members of Congress, the President, Vice President, and their spouses and dependent children from owning or trading "covered investments." This includes individual stocks, commodities, futures, and synthetic financial instruments. The intent is to prevent conflicts of interest where officials might benefit financially from their legislative or executive actions.
Supporters argue
Supporters argue this is the most direct way to eliminate perceived and actual conflicts of interest, ensuring public officials prioritize public service over personal financial gain.
Critics contend
Critics might argue this is an overreach, potentially discouraging talented individuals from public service due to the significant personal financial restrictions imposed on their families.
Tradeoffs
Balances the public's right to trust in government integrity against the personal financial autonomy of public servants and their families.
Section 2, amending 5 U.S.C. Chapter 131, Subchapter IV, Sec. 13152(b)
Divestment Requirement and Deadlines
Covered individuals are prohibited from purchasing new covered investments and must divest existing ones at fair market value. Those who are covered individuals upon enactment have 180 days to divest, while those who become covered individuals later have 90 days from that date. This ensures a transition period for compliance.
Section 2, amending 5 U.S.C. Chapter 131, Subchapter IV, Sec. 13151(3)(B)
Exemptions for Diversified Funds and Government Securities
The bill specifically excludes several types of investments from the "covered investment" definition, allowing officials and their families to hold widely held, diversified, publicly traded investment funds, U.S. Treasury bills/notes/bonds, and State or municipal government bonds. It also exempts compensation from a spouse's or dependent child's employer, interests in small businesses (including family farms), LLCs for personal residences, and certain Alaska Native Claims Settlement Act shares.
Section 2, amending 5 U.S.C. Chapter 131, Subchapter IV, Sec. 13153
Financial Penalties and Transparency for Non-Compliance
Any covered individual who violates the trading or ownership restrictions will face a fee equal to 10% of the value of the covered investment and must disgorge any profits from the illicit transaction, with funds going to the U.S. Treasury. Members of Congress are prohibited from using official allowances or campaign funds to pay these penalties. The supervising ethics office must publicly publish details of all assessed fines, reasons, and results.
Section 2, amending 5 U.S.C. Chapter 131, Subchapter IV, Sec. 13152(e)
Spousal/Dependent Occupational Trading Exception
This provision allows a spouse or dependent child of a covered individual to trade covered investments if such trading is a function of their primary occupation and the investment is not owned by the covered individual. This aims to prevent the bill from unduly penalizing family members whose professions involve financial trading.
Defines "diversified" for investment funds as not having a stated policy of concentrating investments in any industry, business, single country (other than the U.S.), or bonds of a single State (except for the State in which the Member of Congress resides).
Section 2, amending 5 U.S.C. Chapter 131, Subchapter IV, Sec. 13151(4)
Why it matters:Standard legislative practice to define terms upfront, but its specific wording has significant implications for how officials can invest.
Case for: Supporters argue this definition is necessary to ensure that "widely held investment funds" truly represent broad market exposure, minimizing the potential for conflicts of interest that could arise from concentrated holdings. It also provides a reasonable allowance for state-specific bonds where a Member resides.
Case against: Critics might argue that the definition, while seemingly broad, could still allow for certain sector-specific funds that might indirectly benefit from legislative actions, or that the exception for a Member's home state bonds could still present localized conflicts.
Estimated impact: Significantly shapes the permissible investment landscape for covered individuals, guiding their portfolio restructuring.
This section applies the Certificate of Divestiture program under Section 1043 of the Internal Revenue Code of 1986 to covered individuals, allowing for the deferral of capital gains taxes from forced sales if proceeds are reinvested in permitted assets.
Section 2, amending 5 U.S.C. Chapter 131, Subchapter IV, Sec. 13152(c)
Why it matters:Standard legislative practice to integrate with existing tax code provisions rather than rewriting them.
Case for: Proponents argue that providing a tax deferral mechanism for forced divestment is crucial to make the transition financially feasible and fair for covered individuals, reducing the punitive financial impact of complying with the new ethics rules.
Case against: No significant case against this provision, as it is generally seen as a standard and fair practice when forced divestment is required for public service.
Estimated impact: Mitigates the immediate tax burden on covered individuals who must sell assets to comply, potentially saving them significant capital gains taxes.