Here we are again.

Congressional stock trading was a hot topic in 2022. Our 2021 political trading report brought international attention to Congress and their stock portfolios and for the first time caused a large public outcry on the topic. Within weeks of publishing it, Congress acted swiftly with drafting several proposals for a stock trading ban. Notably, 27 lawmakers immediately signed on to ban the practice, with politicians at the forefront such as Rep. Spanbanger egging Unusual Whales on and others like Senator Hawley directly quoting UW’s work. Together, we kept the topic in the news and in the minds of politicians for months.

Other examples of the UW report making waves:

• We made Rep. Josh Gottheimer flustered when directly mentioning his trades.
• We drew comments from Senate Majority Leader Chuck Schumer.
• We made Speaker Nancy Pelosi flip from nonchalance and the belief that Congress should trade in 2021 to becoming pro-banning the practice. (Seriously, she was anti-bills before our public pressure, it’s insane)
• We made Dan Crenshaw admit that without trading: "You have no way to better yourself" as a Congressperson.
• We saw the House Administration Committee hold a hearing on Congressional Stock Trading Practices, and quote Unusual Whales’ work.
• We saw Democrat and Republican politicians work together to propose a bipartisan stock trading ban on themselves and their family members, which was not voted on during regular sessions.
  

Yet despite all this mounting pressure, politicians are still allowed to trade stocks.

So, here we are again, with a 2022 report.

Let’s talk about congressional stock trading in 2022: a year in which public scrutiny intensified and a magnifying glass was pointed at politicians' trading practices. Did they feel the pressure? Did they change their ways? Let’s find out together.

TL;DR

(This is a long report. At Unusual Whales, we lean on the side of more data rather than less. So I’ve included this TL;DR for the main take-aways. When you have the time and energy, please read the the full report and let us know your thoughts over on Twitter or Discord.)

• By analysing publicly accessible financial disclosures, we found that a quarter of Congress actively traded up to $788M in various assets through 12,700+ transactions in 2022. Although this matches the number of transactions in 2021, the total value has dropped.
• The top sectors with the highest stock investments were: Technology Services, Electronic Technology, Finance, Consumer Services, Health Technology for Democrats; and Technology Services, Industrial Services, Miscellaneous, Finance, Electronic Technology for Republicans.
• Congress beat SPY based on total returns in 2022, as well as a secondary way of calculating based on if they traded SPY instead of the stocks they traded.
• Top political traders in 2021 were not necessarily top traders in 2022.
• There were many unusual trades, whether coinciding with Committee decisions or large bills themselves, resulting in large gains for politicians.
  

A Backgrounder on Congress and Financial Disclosures

Members of Congress are required to disclose their personal finances through financial disclosure procedures as a way to ensure transparency and accountability in the political process. Financial disclosure forms are filed annually and are made available to the public through the Office of the Clerk of the House of Representatives and the Office of the Secretary of the Senate. These forms are a key tool for promoting ethical conduct in Congress and are an important part of efforts to promote integrity and transparency in the legislative process.

The STOCK Act, or Stop Trading on Congressional Knowledge Act, was passed in 2012 in response to concerns about insider trading by Members of Congress. The STOCK Act amended financial disclosure laws to require Members of Congress and certain other federal officials to disclose their financial transactions within 45 days of the transaction, rather than annually as had previously been required.

The Act also prohibited Members of Congress and other covered officials from using nonpublic information for personal gain, and it established new penalties for insider trading by these individuals.

This report analyzes data obtained from publicly accessible financial disclosure forms. We tried to compile all transactions published from 2020 to December 31, 2022. Note that politicians have up to 45 days to disclose transactions, though many file years late with seemingly no penalty. This delay means that at the time of compiling this report, not all disclosures for 2022 may have been submitted and published. With that being said, our analysis mainly focuses on 2022 trends. We outline our methodology and assumptions below.

Was 2022 different?

In 2022, there were 131 Members of Congress that filed financial disclosures in 2022 (compared to 147 in 2021). This means just under a quarter of Congress (24%) was trading in 2022. Despite being only ¼ of elected officials, they traded up to $788M in various assets with over 12,700 transactions (buys/sales/exchanges). For reference, 2021 had around the same number of transactions, but up to $981M was traded. This means approximately -$189M less was traded in 2022.

A number of factors could have contributed to less money being traded this past year, though none is for certain: 40-year high inflation, interest rate hikes, a bear market, increased public interest in Congressional stock trading and colleagues trying to ban stock trading.

Let’s look at the data.

Trading Differences

We found that the number of transactions remained the same between 2021 and 2022. However, across party lines, it was a different story. House Republicans disclosed 1000+ less trades in 2022 compared to the year before. While House Democrats disclosed 1,000+ more trades in 2022 compared to 2021.

By digging deeper into the data, we can show the top 20 Members with the highest number of transactions in 2021 compared to 2022. By doing so we can show who were the busiest Members that disclosed trades. Out of all Members that disclosed transactions, we found that 59% of Members disclosed less transactions in 2022.

We see that the most prolific trader in the House was Democrat and self-proclaimed “progressive capitalist” Ro Khanna. Most of his disclosures reveal a very large and diverse family stock portfolio with all trades registered under his wife or his children (his two children are both under 6 years old and yet somehow traded). Specifically, Khanna disclosed over 5,700 trades totaling up $151M in 2022.

The second and third highest volume traders were also from the House, two House Republicans:

• Rep. Michael McCaul with over 1,600 transactions totaling up to $176M in 2022
• Rep. Diana Harshbarger with over 1,000 transactions totaling up to $21M
  

An interesting observation is that some of the most prolific traders are also the ones that submit handwritten (and often hard to interpret) disclosure forms such as Representatives Ro Khanna, Diana Harshbarger, and Michael McCaul, and Senators John Boozman and Richard Blumenthal.

Technically, these Members are fulfilling their disclosure responsibilities with their handwritten forms. However, it can be difficult to interpret some of these forms, with no other accountability beyond the handwritten forms themselves and no electronic accountability.

Value Differences

Across the board, the House and Senate have reported lower amounts being bought and sold in 2022 than in 2021.

We show the same 20 Members in each chamber and the total value of assets they traded (bought and sold) over the last 2 years. Out of all Members that disclosed transactions, 61% of them disclosed trading less in total value in 2022 than in 2021.

Asset Differences

When comparing changes in asset classes, we can see that 2022 had more investments in government securities and agency debt, and other securities such as mutual funds and ETFs. There was less investing in stocks and options in 2022 compared to the year prior.

Stock Sector Differences

Stock sector differences yielded similar patterns. With the decrease in technology industry, where numerous tickers like META and AMZN halved or more in value, technological services investing similarly more than halved by members in 2022.

The two notable industries that had larger investments in 2022 than 2021 was energy minerals and consumer durables.

2022 Stats

Let’s dive deeper into 2022 and see what our politicians chose to invest in during this year.

Trends in Assets

Stocks were the asset class with the most activity in 2022. Across both chambers, over $398M in stocks were bought and sold last year. Next were government securities and agency debt (ie. treasury bonds, municipal bonds, etc.). Other securities (such as mutual funds and ETFs) and non-publicly traded stocks were in third place.

Trends in Stocks

Across party lines, stock sell offs were well over $100M in 2022. However, House Democrats were also busy buying stocks, outpacing their Republican colleagues by about $40M.

Much of the buying for 2022 occurred in the beginning of the year, with some increases in September. December was one of the lowest periods, as was April and October. In both cases, the stock market began a trajectory into a bear market.

On the other hand, stocks traded by Congressional members in both House and Senate showed a different pattern. Following the bear market first showing itself on June 14, House and Senate members sold in larger proportions, with Senate members leading the charge. This was followed by extended selling in November.

Trends in Sectors

In 2022, the top sectors with the highest stock investments were: Technology Services, Electronic Technology, Finance, Consumer Services, Health Technology for Democrats; and Technology Services, Industrial Services, Miscellaneous, Finance, Electronic Technology for Republicans.

In 2022, the top sectors with the highest stock sales were: Finance, Technology Services, Electronic Technology, Health Technology, Consumer Services for Democrats; and Industrial Services, Technology Services, Finance, Health Technology, Energy Minerals for Republicans.

Unlike 2021, however, politicians experienced and performed varied trades. Rather than just focus on any individual stock or sector, there are numerous examples of politicians taking unique positions.

For example, in November, Senator Thomas Carper bought up to $110k in Ranger Equity Bear Bear ETF, HDGE, an active ETF that shorts US listed stocks, as well as PSQ and SH. He sits on the Senate Finance Committee. This is an ETF that actively shorts the US economy. There is more on these trends below in the report where we break down the different trading patterns of Congress.

Another example: House Representative Alan S. Lowenthal purchased over $50,000,000 in Treasury Bonds on 2022-11-08. The maturity date is 05/04/2023, 4.569% interest rate. This is an unusually large purchase for a politician.

Trends in Committees Trading

Committees are groups of lawmakers in Congress that are responsible for studying and discussing specific issues and making recommendations for legislative action. They play a vital role in the legislative process by providing a forum for lawmakers to examine and debate proposed legislation and to hear from outside experts and stakeholders. This means they are often privy to non-public information on industries they have jurisdiction over. Furthermore, these committees hold massive influence on the industries they oversee through legislation. For instance, just last month the House Financial Services Committee held a hearing on the FTX collapse and probed the current CEO for hours. That committee will be driving crypto regulation in the future.

In this section, we’ll dig deeper into which standing Committees (through its members) invested in which sectors and whether there could be any potential conflicts. The charts below attempt to illustrate these overlaps by using heat maps between committees and the stock sectors their members traded in last year. The higher the total value bought or sold, the more blue the overlap will be.

This approach could be used to begin identifying some conflicts of interest between committee assignments and personal stock portfolios.

House

We can see that someone on  the House Armed Services Committee and the House Foreign Affairs Committee bought and sold stocks in the Industrial Services sector (oil and gas). Looking further into the data, it looks like Republican Mark Green bought and sold millions in oil and gas stocks throughout 2022. He traded up to $6M in the sector right before Russia invaded Ukraine and up to $14M during the rest of the year, selling more than buying at that point.

The members on the House Homeland Security Committee appear to have a diversified portfolio spanning across industries. This makes sense when we look at who sits on that committee: Reps. Michael McCaul, Diana Harshbarger, Josh Gottheimer, and Jim Langevin. All four of these members disclosed huge amounts in 2022.

Note: Former Speaker Nancy Pelosi and Rep. Marjorie Taylor Greene were included in the “None” committee group.

Removing the Big House 5
Reps. Ro Khanna, Michael McCaul, Mark Green, Diana Harshbarger and former Speaker Nancy Pelosi disclose such huge trades that it diminishes the ability to see anyone else’s trades. So let’s see if this committee breakdown looks different when we remove them.

You can see that the value of stocks purchases differed when removing the large members. Finance became one of the largest trends purchased, as well as miscellaneous stock sectors. That is, if you were on the Financial Services Committee, you bought Finance related stocks. Interesting.

Meanwhile, on the sell side, energy and health technology sector stocks were sold by the Financial Services Committee

Senate
Meanwhile in the Senate, we can see someone on the Senate committees of Agriculture, Nutrition and Forestry, Armed Services, and Health, Education, Labor and Pensions was busy trading last year. This was Senator Tommy Tuberville trading stocks in Consumer Durables, tech and Non-Energy Minerals.

The individual on the Senate Judiciary Committee selling off tons of stock in Consumer Non-Durables was Senator Richard Blumenthal’s spouse and Kraft Heinz (KHC) and Keurig Dr Pepper (KDP).

Trends in Member Trading in Stock Sectors

In this section, we’ll dig deeper into which members bought and sold stocks in different sectors in 2022. The charts below attempt to illustrate these trends by using heat maps between Members and the sectors they traded in. The higher the number of trades or amounts disclosed the more blue the overlap will be.

House
Some of the most popular stock sectors targeted by specific House Reps (the blue squares) were:

• Ro Khanna made 514 stock purchases (GOOGL, MSFT, META, CSCO, ADBE, etc.) in tech (up to $13.1M)
• Nancy Pelosi made 2 stock purchases (PYPL, GOOGL) in Electronic Technology (up to $10M)
• Ro Khanna made 420 stock purchases (TD, JPM, BAC, V, MMC, etc.) in Finance (up to $9.73M)
• Mark Green made 20 stock purchases (ET, ENLC, AM, ETRN, PBFX, etc.) in Industrial Services (up to $7.68M)
• Michael McCaul made 104 stock purchases (EPAM, ACN, META, CDW, ADSK, etc.) in tech (up to $7.18M)
  

Some of the highest sales activity by individual Members in specific sectors were the following (blue squares):

• Ro Khanna made 454 sales transactions (GOOGL, MSFT, META, ADOBE, CRM, etc.) in tech (up to $12.4M)
• Mark Green made 21 sales transactions (AM, ENLC, USAC, ET, PAA, etc.) in Industrial Services (up to $12.2M)
• Nancy Pelosi made 2 sales transactions (both in V) in Finance for up to $10M
• Ro Khanna made another 388 sales transactions (V, JPM, BAC, MA, AIG, etc.) in Finance (up to $9.82M)
• Michael McCaul made 124 sales transactions (GOOGL, META, MSFT, GPIN, SONY, etc.) in Technology Services (up to $8.86M)
  

Removing the Big House 5

Reps. Ro Khanna, Michael McCaul, Mark Green, Diana Harshbarger and former Speaker Nancy Pelosi disclose such huge trades that it diminishes the ability to see anyone else’s trades. So let’s see if anyone else pops up once they’re removed.

We can now see that other Members pop up that disclosed many trades in 2022, but pale in comparison to the big House 5.

These individuals include:

• Reps. Josh Gottheimer, Kathy Manning and Virginia Foxx showing how to maintain a diversified stock portfolio (by investing in different sectors), with the first two continuing to trade in Congress’ favorite blue chip stock MSFT
• Rep. Trey Hollingsworth bought millions in financial institutions such as Owl Rock Capital Corp (ORCC), JPM and the National Bank of Canada (NTIOF)
• Rep. Van Taylor selling off massive amounts in oil and gas (XOM, OXY, CVX) and pharma stocks (BMY, ZIMV, LLY) in November 2022
  

Senate

Some of the highest stock buying activity by individual Senators in specific sectors were the following (blue squares):

• Tommy Tuberville made 23 stock purchases in Technology Services (PYPL, MSFT, ECOM, CSCO, etc. for up to $3.22M)
• Tommy Tuberville made 11 stock purchases in Non-Energy Minerals including infrastructure stocks (X, CLF, GOLD, GFI, SCCO, etc. for up to $1.4M)
• Tommy Tuberville made 12 stock purchases in Electronic Technology or semiconductor-related stocks (INTC, QCOM, SSYS, NVDA, MKSI, NOC for up to $1.29M)
• Richard Blumenthal made 2 stock purchases in Technology Services (GOOG, MSFT for up to $1M)
• John Hickenlooper made 13 stock purchases in Consumer Services (mainly Liberty Media Corp and its subsidiaries such as FWONK, LBRDA, LBRDK, BATRK, LSXMK for up to $825K). Hickenlooper’s wife is a senior executive at Liberty Media.
  

Some of the highest sales activity by individual Senators in specific sectors were the following (blue squares):

• Tommy Tuberville made 17 sales transactions in Technology Services (ECOM, PYPL, MSFT, ACN, ADBE, etc. for up to $2.44M)
• Richard Blumenthal made 8 sales transactions in Consumer Non-Durables (KHC and KDP for up to $2.35M)
• John Hickenlooper made 16 sales transactions in Consumer Services (again, all Liberty Media Corp stocks as well as Chipotle CMG for up to $1.85M)
• Richard Blumenthal made 20 sales transactions in Finance (all in RADI for up to $1.22M)
• Tommy Tuberville made 8 sales transactions in Electronic Technology (QCOM, SSYS, INTC, NVDA, AAPL for up to $0.76M)  
  

As you can see, numerous members traded a wide range of stocks. As per usual, both Democratic and Republican members had favorite sectors, which were similar to last year’s report (Democrats leaned tech, Republicans for banks and commodities).

Trends in Stocks

Here are the largest sectors and individual names for each sector in a heatmap for the 2022 trading year.

Some of the most popular stocks purchased were:

• Apple, AAPL: $6.3M
• Google, GOOG: $6.2M
• Disney, DIS: $6.25M
• Tesla, TSLA: $6.08M
• Nvidia, NVDA: $5.68M
  

Some of the most popular stocks sold were:

• Visa, V: $11.2M
• Nvidia, NVDA: $6.35M
• Exxon Mobil, XOM: $5.32M
• Eli Lilly, LLY: $5.21M
• Microsoft, MSFT: $3.4M
  

Let’s break the individual companies bought by the House and Senate.

House

When we look specifically at the top 10 stocks preferred by the House, we see notable tech companies, as well as oil and gas stocks.

Notably, you can see that House Democrats purchased mostly DIS, AAPL, TSLA, GOOGL, NVDA, PYPL and MSFT. Most of these large purchases can be attributed to former Speaker Nancy Pelosi. Meanwhile, the top stocks bought by House Republicans included ET, T, DOW and EPAM.

In terms of top stocks sold, Visa was the top for House Democrats, followed by NVDA and AAPL. Again, the majority of these were attributed to former Speaker Nancy Pelosi. For Republicans, the top was XOM, LLY, AM, and GOOGL.

Senate

Meanwhile in the Senate, the top 10 stocks bought were infrastructure and tech related. While the top 10 sold stocks were mostly just tech and food/commodity related.

Specifically, Senate Republicans bought MSFT, PYPL and X. Meanwhile Senate Democrats purchased INTC, AMZN, APG and GOOG.

Top stocks sold by Senate Republicans include ECOM, PYPL, MSFT and QCOM. Meanwhile, top stocks sold by Senate Democrats include KHC, RADI, KDP and LSXMK.

Less Options Trading in 2022

One large trend immediately apparent in the data was extensively less options trading in 2022. While in 2021, we saw a lot less short sales of options and potential covered calls. These two strategies were used more often in 2022 than in 2021, however most option trading was down across the board.

Josh Gottheimer was again the top options trader by total value traded. This mirrors 2021, where he bought and sold over $60 million in calls alone. Most of Gottheimer’s options contracts were for Microsoft. Interestingly, he used to be a Microsoft executive.

2022 Returns

We used two ways to compare returns to 2022. Congress outperformed the S&P 500 in 2022 on both of them.

First, here’s how we estimated Congressional stock returns. We had to do this because there currently isn’t enough information provided in financial disclosures to be 100% sure of what losses or gains were made for each trade.

1. Start off with a dataset of all congressional stock trades since 2020
2. Every sale transaction by a Member of Congress that took place before the first instance of a buy of that stock by that Member was removed
3. Every sale transaction was associated with the closest buy of that stock for each Member and their accounts (going back to 2020)
4. Every remaining buy trade was associated to the closest sale date of that stock by that Member
5. Every unrealized stock purchased since 2020 was included and the unrealized returns were calculated to December 30, 2022

This gives us conservative estimates on Congressional stock returns and incorporates timeframes of holding and selling stocks.

To compare Congressional stock trades to SPY’s performance in 2022, we filtered on only stock trades made in 2022 (ie. removed held stocks since 2020). The chart below shows that Democrats and Republicans beat the market! Unsurprising though as SPY has had its worst year since 2008 and ended off 2022 down nearly -20%. While the Democrats were down approximately -2%, their Republican colleagues were actually up approximately +0.4%.

We also used a SPY-matched trades approach that estimated what Congress’ returns would be if they ONLY traded SPY rather than their chosen company stocks. In this approach, we could include those unrealized trades since 2020, because they had corresponding SPY-matched comparisons. For example, say Congressman A bought MSFT in June and then sold it in July. Instead of using MSFT’s daily prices to calculate his returns, we would use SPY’s daily prices for those dates. By doing this for every trade, we can compare returns to SPY in a different way.

Using this approach, we also found that Democrats and Republicans beat SPY! Republicans came out on top again in this approach with +4.6%, while Democrats had +3.7%.

To reiterate: Both the Republicans and Democrats beat the market in 2022. However, Republicans outperformed both the Democrats and the market.

But what about weighted average returns?

Let’s see how Congress did when we incorporate the amounts disclosed. Again, Republicans came out on top at +2.4% compared to SPY-matched weighted returns near 0%. Democrats, with their insanely huge trading amounts, actually did worse than our SPY comparison.

Returns by Chamber and Party

You can see that both the Senate and House beat out SPY-matched trades in 2022.

The Senate Republicans who traded had a 5.83% return, whereas the Senate Democrats who traded had an average return of 16.28%. The Democrats outperformed using average returns due to unrealized returns from stocks bought back in 2020.

The House Republicans, largely invested in oil + commodities in the beginning of the year, outperformed their House Democratic colleagues by 1.4 percentage points.

When we incorporate weighted average returns, which takes a return and multiplies it by its proportion (i.e. larger return has a larger weight), we see that Senate Democrats still beat their Senate Republican colleagues marginally, but with weights included, the huge difference disappears. House Democrats fail to keep up with their colleagues, again owing to the astronomical amounts they make trades in (millions of dollars). House Republicans performed the best with a +2.1% weighted average return in 2022 beating Democrats and the SPY-matched weighted trades.

Returns by Politician

Let’s use the same approach for individual members (ie: let’s see what would happen if they traded SPY with their buy/sells instead of the individual shares they did) to get overall returns. It turns out that once again, members beat out SPY in 2022.

Note that the top performing Members including Reps Mike Kelly, David Trone, James Comer, and Senators Roger Marshall and John Hoeven were based on less than 5 trades each and were all unrealized gains due to stock buys dating back to 2020.

Here were the best trades with the highest gains as of year end 2022.

Realized:

• 2022-04-19: House Democrat Josh Gottheimer purchased $CCXI and sold on 2022-08-11 for an estimated gain of 140%
• 2022-01-24: House Republican Patrick Fallon purchased $TWTR and sold on 2022-10-31 for an estimated gain of 60%
• 2022-01-21: House Republican Diana Harshbarger purchased $LPLA and sold on 2022-10-24 for an estimated gain of 49%
• 2022-01-21: House Republican Diana Harshbarger purchased $LPLA and sold on 2022-11-14 for an estimated gain of 43%
• 2022-01-19: House Republican Patrick Fallon purchased $TWTR and sold on 2022-10-31 for an estimated gain of 43%
• 2022-06-01: Senate Republican Tommy Tuberville purchased $ECOM and sold on 2022-09-07 for an estimated gain of 61%
• 2022-06-29: Senate Republican Tommy Tuberville purchased $PYPL and sold on 2022-08-11 for an estimated gain of 41%
  

Unrealized aka still holding:

• 2020-10-02: House Democrat Tom Malinowski purchased $APEN, is holding it and is currently is up 497%
• 2020-10-30: House Democrat Tom Malinowski purchased $APEN, is holding it and is currently is up 454%
• 2020-04-02: House Democrat Dean Phillips purchased $PWR, is holding it and is currently is up 391%
• 2020-05-20: House Democrat Ro Khanna purchased $ON, is holding it and is currently is up 351%
• 2020-04-02: House Democrat Dean Phillips purchased $MOS, is holding it and is currently is up 349%
• 2020-03-10: Senate Republican Jerry Moran purchased $HAL, is holding it and is currently is up 325%
• 2020-04-17: Senate Democrat Ron Wyden purchased $F, is holding it and is currently is up 165%
• 2020-04-21: Senate Democrat Ron Wyden purchased $NVDA, is holding it and is currently is up 165%
• 2020-11-20: Senate Democrat Thomas Carper purchased $FTNT, is holding it and is currently is up 135%
• 2020-04-02: Senate Democrat Thomas Carper purchased $NVO, is holding it and is currently is up 128%
  
  

Hot Topics

A lot of things happened in 2022 and many of them affected the stock market. In this section, let’s highlight some of them and see how our politicians may or may not have benefited through their personal investments.

War Gains

“War and rumors of war is incredibly profitable and convenient.”

-Rep. Marjorie Taylor Greene

(Feb. 23, 2022)

At the start of this year, Russia invaded Ukraine. America is supporting the Ukrainian resistance through training, equipment, and advisory efforts. Politicians have lined their personal portfolios with defense stocks and have made gains from those companies this year.

As a member of the House Foreign Affairs Committee, Democrat Gerald Connolly has been a vocal supporter of sending aid to Ukraine, even co-sponsoring a House resolution on that initiative in March 2022. Throughout the pandemic, Connolly was selling off Leidos Holdings Inc stocks (LDOS). His most recent LDOS sale was in August 2022. This means he held defense stocks while advocating for/co-sponsoring an immediate defensive security response in Ukraine.

A fellow member of the House Foreign Affairs Committee, Democrat Kathy Manning also supported the same House resolution while holding Lockheed Martin stocks (LMT) bought in October 2021. In 2022, she disclosed that her spouse and herself (joint and own accounts) have traded RTX, LHX, NOC and LMT.

There were a number of politicians that bought defense stocks in late February as Russia invaded Ukraine. On February 22, House Republican Marjorie Taylor Greene bought up to $15K in LMT (as well as Chevron, CVX and NextEra Energy, NEE) and then tweeted “War and rumors of war is incredibly profitable and convenient.” one day later.

On the day of the invasion on February 24, both House Republican John Rutherford and House Democrat Earl Blumenauer bought up to $15K in RTX. Blumenauer noted in his disclosure that his advisors had bought RTX in error and once he noticed it, he sold it (on March 14, 2022 for a +3% gain). Rutherford sat on the House Committee on Appropriations and its Subcommittee on Military Construction, Veterans Affairs and Related Agencies which has jurisdiction over the DoD. On February 25, House Republican Diana Harshbarger disclosed buying  up to $15K in NOC in all three accounts (owned by herself, joint account and by her spouse). She sat on the House Committee on Homeland Security.

Senate Republican Tommy Tuberville, who sat on the Senate Armed Services Committee, bought up to $15K in NOC on March 30, 2022 while Russia’s invasion on Ukraine was in full swing. He later sold those stocks on October 5 for a +6.9% gain.

Senator Deb Fischer, another Senate Armed Services Committee member, also sold defense stock LMT  (June 23, 2022 for a +18.8% gain). However, she inherited these stocks from her mother in late 2021.

Oil

We’ve commented on how republicans outperformed SPY, the market, and their Democratic collegues above. Part of this is due to their positioning before the war in commodities that sky rocketed after the Ukraine War. I suggest reading our original report on the subject. Here is an older image from March 2022 regarding the report.

Crypto Collapse

Following 2022’s crypto crash, the chorus of pro-regulating crypto hit a crescendo in Congress. Previously, politicians had taken a wait-and-see attitude towards the industry with only a handful of vocal advocates. However, after FTX’s collapse and billions in customer assets lost, Congress has seemingly taken a stance.

Congress’ crypto trading habits may have been a proxy for this sentiment change. In 2021, we saw as many as 8 members of the House and Senate dip their toes into cryptocurrencies. They were: Senate Republicans Pat Toomey (retiring) and Cynthia Lummis; House Republicans Madison Cawthorn, Barry Moore, Mark Green, Michael McCaul, Michael Waltz, and House Democrat Marie Newman.

The chart below shows the total value of crypto and crypto-related assets bought and sold over the last two years.

However, in 2022 there were only three: Cawthorn, Newman (only bought GBTC), and Senator Ted Cruz (bought BTC). Out of those three, only Ted Cruz is returning to Congress in 2023.

We also reported on crypto industry donations to midterm campaigns and the awkward position those incumbents or candidates were in following FTX’s collapse. Check out that post here.

A lot has happened in the crypto sector this year, so here's a list of politicians who are pro-crypto and who’s staunchly anti-crypto as of the end of 2022.

Politicians who are pro-crypto or have made public supportive statements for the industry.

House:  Abigail Spanberger, Andre Carson, Anna Eshoo, Anthony Gonzalez, Ayanna Pressley, Bill Foster, Bill Huizenga, Bill Posey, Bobby Rush, Brett Guthrie, Bryan Steil, Byron Donalds, Darren Soto, David Joyce, David McKinley, David Schweikert, Donald Beyer Jr., Eric Swalwell, Frank Lucas, French Hill, Glen Thompson, Greg Murphy, Ilhan Omar, Jackie Walorski, Jake Auchincloss, Jeff Duncan, Jerry McNerney, Jim Cooper, Jim Himes, John Curtis, John Larson, John Rose, Josh Gottheimer, Joyce Beatty, Kat Cammack, Kevin Brady, Lance Gooden, Lauren Boebert, Maria Salazar, Marianette Miller-Meek, Marie Newman, Matt Gaetz, Michael Burgess, Michael Cloud, Michael Waltz, Mike Bost, Mike Levin, Mo Brooks, Nancy Mace, Patrick McHenry, Paul Gosar, Peter Welch, Raja Krishnamorthi, Ralph Norman, Ritchie Torres, Ro Khanna, Rob Wittman, Scott Perry, Sean Patrick Maloney, Stacey Plaskett, Stephen Lynch, Suzan DelBene, Ted Budd, Tim Ryan, Tom Emmer, Trey Hollingsworth, Troy Carter, Van Taylor, Warren Davidson, Warren Davison, William Timmons, Yvette Clark

Senate: Bill Cassidy, Bill Hagerty, Chuck Grassley, Cory Booker, Cynthia Lummis, Debbie Stabenow, Ed Markey, Gary Peters, John Boozman, John Cornyn, John Hickenlooper, John Thune, Joni Ernst, Josh Hawley, Kevin Cramer, Kirsten Gillibrand, Kyrsten Sinema, Maria Cantwell, Mark Warner, Marsha Blackburn, Mike Braun, Mike Crapo, Mike Rounds, Patrick Toomey, Rick Scott, Rob Portman, Roger Wicker, Ron Wyden, Shelley Moore Capito, Steve Daines, Ted Cruz, Thom TIllis, Tim Scott, Todd Young, Tommy Tuberville

Politicians who are anti-crypto or have made public statements against the industry.

House: Al Green , Al Lawson, Alma Adams, Carolyn Bourdeaux, Carolyn Maloney, Chris Pappas, Emanual Cleaver, Kweisi Mfume, Lloyd Doggett, Michael McCaul

Senate: Bernie Sanders, Brad Sherman, Chris Van Hollen, Chuck Schumer, Dick Durbin, Elizabeth Warren, Jack Reed, Joe Manchin, Jon Tester, Sherrod Brown, Tina Smith

Omicron Boosters

Pfizer and Moderna have come out as winners in the pandemic, offering the most versatile and effective vaccines on the market. PFE has also been the more popular COVID vaccine stock traded by Congress. Using transactions since 2020, we estimated the average stock returns on PFE and MRNA trades. Senator Carper, and House Reps Mo Brooks and Earl Blumenauer have the best returns trading PFE since the pandemic started. Rep. Brooks sits on the House Science, Space and Tech Committee. While Rep. Blumenauer sits on the House Ways and Means Committee, specifically its Subcommittee on Health which handles legislation and oversight related to programs paying for health care, health delivery systems, or health research.

Reps. Frankel, Perlmutter, Newman and Senators Moran and Tuberville also sat on science and health-related committees.

The only Member that bought and sold MRNA was House Democrat Ro Khanna, and according to our estimates has not made any positive gains.

Semiconductors and Competing with China

To address the semiconductor chips shortage and America’s overreliance on China, Biden signed the CHIPS Act back in August 2022. We’ve previously reported that politicians have been personally invested in the industry while finalising the details of the Act. In an unprecedented move, Speaker Nancy Pelosi completely divested from the industry (selling off her family’s 25,000 NVDA shares at a $341,365 loss) right before the House voted to pass the CHIPS Act. In September, she sold MU and NVDA calls at a loss as well.

It’s important to note that the CHIPS Act mainly benefits semiconductor “fabs” which are manufacturing plants making the actual chips. In contrast, “fabless” companies may not see much of the funding from the Act. In December, the Semiconductor Industry Association noted that the Act has spurred $200 billion in private investments for domestic manufacturing efforts. With chips being a hot topic since the inception of this Congressional cohort, let’s see who’s made gains over the last two years.

Note: Fabless stocks include NVDA, AMD, QCOM, ADI, NXPI, MXIM, SLAB; Fabs include INTC, TXN, MU, TSM, SWKS, IFNNY, WDC, STM.

Late Disclosures, Amendments and Skirting Detection

Amendments

In 2022, we also saw an unprecedented number of amendments correcting details in past financial disclosures. Specifically, 164 trades from 2021 were amended in 2022. By comparison, only 31 trades from 2020 were amended in 2021. This 4x difference could be due to Members feeling the public pressure and reviewing their past disclosures to ensure they are 100% accurate.

House Republican Pat Fallon filed 112 amended trades, the most out of all Members of Congress in 2022. This was followed by House Democrat Tom Suozzi, who filed 41 trades with some dating back to 2017! Next House Reps Alan Lowenthal and Brian Mast amended 10 trades each, and former Speaker Nancy Pelosi and House Rep Susie Lee amended 4 each. There were half a dozen more Members, but they disclosed amending 1-3 trades each.

Handwritten Disclosures

This section is here just to show that there are numerous politicians who choose to file handwritten paper disclosures. Some file thousands of trades this way. One major problem here is that these trades cannot be electronically scraped. It’s hard to piece together the larger trends when you’re stuck with chicken scratch. We encourage these politicians, especially the prolific traders, to begin filing trades in the same format as their colleagues.

Late Disclosures

Another year means another year of late disclosures filed by our elected officials. Amendments are clearly indicated in House filings, so we’ll comment on those.

In 2022, we saw 10 House Representatives file late disclosures. House Republican Chris Jacobs filed 80 late trades ranging between 53 to 70 days late. However, the worst offender for supremely late disclosures goes to now former Rep. Madison Cawthorn, who filed 22 late trades with some of them being 331 days late. On top of amending many past trades (mentioned previously), Rep Suozzi also filed 10 late trades, all over 2 months old. Representatives Lloyd Doggett and Bill Keating both filed 4 late trades with one of Keating’s trades being 102 days late.

The unfortunate reality is that a $200 fine is not a strong enough deterrent.

The good news is that there were significantly less offenders in 2022 compared to 2021, where there were 41 House Representatives with late disclosures. Some of those late trades were 200+ days late.

Even when politicians violate the STOCK Act, they aren’t held accountable. For example, just last year the House Ethics Committee unanimously voted to dismiss Pat Fallon & Tom Suozzi for their STOCK Act violations. The Committee said there was “not clear evidence of intentional failure to disclose."

Unusual Trades and Politicians Shorting the US Economy

Congress had numerous unusual trades in 2022. We’ve done a few notable sections on the above topic, as well as expanded on the unusual trades in the Conflicts and Lobbying sections, but let’s take a look at some weird, unusual, or down right odd trades Congress made in 2022:

• ECOM,  ChannelAdvisor Corp, was announced to be acquired by CommerceHub on September 6, 2022 for $23.10 per share. It jumped 55% in share price on the acquisition news. Tommy Tuberville had been purchasing ECOM since 03/08/2022, purchasing a total of $575,000 of ECOM. He bought $250,000 on 07/14. Tubberville’s ECOM average purchase price was approximately $15.00, meaning he had a 54% return on his investment this year alone, turning approximately $575,000 into ~$900000. You can see as the acquisition date came closer, he purchased more ECOM, and in larger sizes.
• Alan Lowenthal actively traded PSQ, a bearish ETF called ProShares short QQQ, around 80k USD in total. This means Alan Lowenthal shorted the US economy. He bought on Jan 14th for around $11.41, and sold on 02-24 at $12.60, for an around 10% gain in shorting the US economy.
• Alan Lowenthal was not the only shorting the US economy, numerous Congress people did it. For example, Senator Thomas Carper bought up to $200k in bearish ETFs before the huge rate hikes and CPI data from the federal reserve. He sits on the Senate Finance Committee. On October 4th, Senator Thomas Carper has sold his short on the US economy, with the ProShares Short S&P500, $SH. He just reported selling up to $80,000 shares on Sept 19, originally purchased March 2022. He made around 4% on the sale. His short positions were up approximately 5-20% on the SPY, as well as his PSQ positions.  Carper’s PSQ, and SH sales were incredible, as were his buying of SPY at the bottom of the covid crash. You should really see these charts below:
• Dan Crenshaw has consistently railed against big tech, however, his largest purchases recently have all been in large tech stocks. He bought shares of $META, $GOOGL, $AMZN, & $AAPL totaling up to $60K. On Feb 3rd, he sold up to $45,000 in $LUV, $BA, and more. His $BA had a 32% return
• On Jan 31st of 2022, it was revealed House Republican Pat Fallon, known for his late financial disclosures of up to $18 million in 2021, was day trading on December 16, 2021. He bought and sold $TWTR puts with a next-day expiry. Due to this day trading, the House Ethics Committee said they were investigating Congressman Pat Fallon, after Unusual Whales reported on his stock trades, however, according to the Committee no wrongdoing was done.
• Pat Fallon was further interestingly buying Twitter at large dips, and in large blocks, up to $100,000, on 2021-11-19, 2022-01-19 and 24, which coincided with Elon Musk’s Twitter purchases as he began his stake in Twitter. Later, Elon announced his buyout of Twitter. It was the first time Fallon bought Twitter, and throughout 2022, he was investigated by the House Ethics Committee for his stock trading.
• On July 27th, Nancy & Paul Pelosi sold all 25,000 of their shares of Nvidia, $NVDA. The most interesting thing about this was she disclosed the trade to the Ethics office THE DAY it happened. Due to public pressure, instead of waiting 30-45 days as she usually does, she felt compelled to divest from the conflict of interest of the NVDA shares and voting on the CHIPS Act in the same week. It should be stated that $NVDA was also told to restrict chip sales in China & Russia by the US Government on August 26 which was a month later from the CHIPS Act.  $NVDA dropped 20% afterwards. Pelosi sold her NVDA for a loss in July, however was well timed in selling before a significant tech drop over the next few months, hastened by semiconductor fallout.
• The Pelosi’s also sold Visa, V, shares worth up to $4 million on November 8. The Credit Card Introduction Act was introduced by her colleagues on August 7, 2022. It has not passed yet. The Act aims to increase competition among providers thereby allowing small businesses the ability to choose between two credit card network options to process transactions.
  
  

Committee Conflicts in Congress

Unusual Whales also spent the year looking at committee conflicts in Congress. What we found was staggering.

Committee Conflicts Report was completed on Sept 1st, 2022. Read more here.

• Certain Committees and members have outperformed the market by a significant margin
• Certain individual committee members and even committee chairs and ranking members have made returns in the hundreds of percent on investments in companies that operate within their committees’ jurisdiction
• Members make trades often in the individual sectors before a large decision which directly influences the sector itself
  

Unusual Committee Conflicts

• Alan Lowenthal - member of the Natural Resources House Committee - has disclosed sixteen different investments, fifteen made by his spouse, and one disclosed jointly, in the company Sunrun. Sunrun is a provider of photovoltaic solar energy generation systems and battery energy storage products. Averaging 261% across the sixteen investments. He is  the chair of the Energy and Mineral Resources (EMR) Sub-committee . The jurisdiction of the EMR includes the “planning for and development of energy from solar and wind resources on land belonging to the United States, including the outer Continental Shelf.” (Source)
• Similarly, Debbie Wasserman Schultz - another member of the House Natural Resources Committee as well as the House Oversight Committee - has disclosed investments in Patterson-UTI Energy, which provides land drilling and pressure pumping services, directional drilling, rental equipment and technology to clients in the United States and western Canada. Her investments in Patterson currently yield a 68% return.
• Senator Jerry Moran, disclosed purchasing Halliburton Company, on March 10, 2020, and is as of the time of this report, up over 325%. Moran is a member of the Appropriations Committee, Banking, Housing, and Urban Affairs Committee, Commerce, Science, and Transportation Committee,  and Health, Education, Labor, and Pensions Committee.
• Senator Bill Casidy - a member of the Energy and Natural Resources, is up 58% since March 9th, 2020 in an investment his spouse made in Phillips 66, an energy manufacturing and logistics company, you may recognize from its many gas stations. .  
  

Lobbying

Lobbying also took an active focus at Unusual Whales. You can read our full lobbying report here. The data below is valid as of May 1st, 2022. TLDR is that:

• Lobbying in US politics was a $2B+ industry in 2021
• Lobbying companies were more likely to be invested in by Congress than nonlobbying companies.
• Lobbying companies outperformed nonlobbying companies, both in average and in Congressional portfolios.
• Corporations and industry associations lobbied Congress and related agencies on legislative issues using an army of professional lobbyists, many of which have previously worked inside government.
• Taxation, budget and appropriations were the top issues with the most money spent on lobbying expenses by companies.
• Religion, DC statehood, apparel/clothing industry and gaming/casinos were issues with the least amount of lobbying expenses spent by companies.
  

The following are some examples of unusual associations in 2021 and 2022:

• House Republican Andrew Garbarino, who sits on the Committee on Small Business, bought and sold up to $15k in OneSpaWorld Holdings ($OSW) stocks, which conveniently lobbied the government on “Small Business” issues. He sold for +1.05%.
• House Democrat Josh Gottheimer, who sits on the Committee on Financial Services, bought up to $30k and sold up to $15k in BHP Group Limited ($BHP) stocks, which lobbied the government on “Financial Institutions/Investments/Securities” and “Taxation/Internal Revenue Code” among many other issues. He also traded HCA Healthcare ($HCA) several times in 2021, which also lobbied on “Taxation/Internal Revenue Code”, “Budget/Appropriations”, and “Insurance”. By the end of 2021, his most recent purchase of up to $15k had gained +40%.
• House Democrat Lloyd Doggett, who sits on both Committees on the Budget, and on Ways and Means (which together have jurisdictions over government spending, revenue and taxation), bought Procter & Gamble Co. ($PG) stocks four times throughout 2021. PG lobbied the government on “Taxation/Internal Revenue Code”. Taking his earliest purchase date, he was up 30.5% by the end of 2021.
• House Republican Kevin Hern, who also sits on the Committee on Ways and Means, bought and sold FS Investments ($FSK) stocks. The company lobbied Congress on “Taxation/Internal Revenue Code”. Rep. Hern was up 33.2% at the time of selling.
• House Democrat Thomas Suozzi, who also sits on the Committee on Ways and Means, bought and sold CVS Health ($CVS), MGM Resort ($MGM), and Eli Lilly ($LLY) stocks throughout 2021. All companies lobbied Congress on “Taxation/Internal Revenue Code”. He bought up to $130k and sold up to $65k in $CVS, and one of these trades was up 52.6% as of May 1, 2022.
• House Democrat Earl Blumenauer sits on the Committee on Ways and Means and its Subcommittee on Health. He bought $15k in Pfizer ($PFE) stocks on May 7, 2021 and has held (up 50% by end of year). Pfizer lobbied Congress on several issues including: “Health Issues,” “Medicare/Medicaid,” and “Taxation/Internal Revenue Code”.
• House Democrat John Yarmuth sits on the House Committee on the Budget, and bought $15k in 3M ($MMM) stocks in September 2021. 3M has lobbied on a variety of issues, but relevant to Representative Yarmuth, they lobbied on “Budget/Appropriations”. He was only up 1.21% by the end of the year.
• House Republican Mark Green, known for his excessive trading in the oil and gas industry, sits on the Committee on Foreign Affairs. In Q1 2021, he bought up to $750k in BP Midstream Partners ($BPMP) and later sold off up to $500k in Q2 (up 9.74%). BP America lobbied Congress on many issues related to the oil and gas industry, but of interest here were “Foreign Relations” and “Trade (Domestic & Foreign)”.
• Republican Senator Tommy Tuberville, who sits on the Committee on Health, Education, Labor and Pensions. He bought and sold 3M ($MMM) and Procter & Gamble Co. ($PG) stocks during 2021, sold $MMM during 2021 and sold off $PG in early 2022. Both companies have lobbied Congress on “Health Issues”.
• Freshman Senate Democrat John Hickenlooper sits on the Senate Committee on Commerce, Science and Technology, bought Dragoneer Growth Opportunities Corporation (previously $DGNR), a SPAC, on February 21, 2021. Dragoneer and CCC Intelligent Solutions Inc. (previously $CCC, now $CCCS) announced their intent to merge at the beginning of February and completed said merger in August. CCC Intelligent Solutions lobbied the government on “Science/Technology” among other issues for a total of $240,000 in lobbying contributions. Senator Hickenlooper also sits on the Committee on Small Business and Entrepreneurship.
• Tuberville’s colleague, Republican Senator Jerry Moran, also sits on the same committee and sold off up to $15k in CVS stocks in late 2021. Taking his earlier purchase date back in August 2020, he was +63%.  CVS lobbied the government on “Health Issues” as well, along with “Medicare/Medicaid” and “Insurance”, noting lobbying expenses just under $9M.

What About Pelosi?

What about everyone’s favorite political stock trader?

Well the Pelosi family had a greatly reduced trading year in 2022. In 2021 and 2020, they flourished, with huge outsized returns. We wrote entire reports on her trading style, as well as created a series of free ETFs to follow her moves.

Here are all of Pelosi’s reported open positions, as well as her relative returns at the moment:

Pelosi’s Options

Pelosi had a terrible year with options, where her deep ITM call strategy for her tech plays really did not work out in 2022. She exercised most of her plays that expired at a loss, and immediately sold those stocks. You can see her active options positions (down 99%) as well as the ones she exercised below:

Pelosi also added a 50k interest in an LLC called REOF LLC, bringing the total REOF investment to around 350k. Ultimately, Pelosi’s strategies worked well in 2020-2021, but failed as interest rates rose.

2023 Outlook

Although there were several bipartisan proposals to ban stock trading led by prominent politicians, none of them were passed in 2022.

Here are some reasons proposed as to why Congress should be banned from stock trading and why the idea has gained momentum in the last year:

• Members of Congress may engage in insider trading by using non-public information to inform their stock trading decisions. This has already happened several times in the past, as caught by Unusual Whales.
• Trading stocks may give the appearance that Congress members are more interested in personal financial gain than serving the public, leading to a loss of trust in government.
• Stock trading may distract Congress members from their duties and responsibilities to serve the public.
• Allowing Congress members to trade stocks may create the appearance that they are using their positions for personal gain, which goes against the principles of public service.
• Some members of Congress may have an unfair advantage in stock trading due to their expertise or resources, so a ban would level the playing field.
  

We’ve released this report on January 3rd, which is the same day the 118th Congress is being sworn in. The House switches from Democrat to Republican-led. The Senate remains under the control of Democrats. With the two chambers split, we don’t expect meaningful legislation to get passed in the next two years. With that being said, we’re hopeful that the issue of banning Congressional stock trading can bring politicians together from both sides of the aisle.

Perhaps, they can work together to pass one of those proposals. The future remains unknown. However, we are sure of two things:

1. If nothing is done, Congress will continue to trade in alarming amounts to beat the market.
2. Unusual Whales will continue to cover Congressional trading as long as it exists.
   

Unusual Whales, notably, also has collaborated with partners to launch two ETFs that will allow you to trade alongside Congress. Unusual Whales does not receive any funding from the ETF, nor any of the management fee. Unusual Whales is only a data provider for the ETF, and does not necessarily endorse, nor dissaude from, investment into, or with, it.

What Unusual Whales does endorse, however, is strong data and transparency. We will continue to fight for market transparency in 2023.

We hope you will join us.