Why Politicians Should #Divest - Honolulu Civil Beat

About the Author

Sultan White

Sultan White is the Innovation & Technology Manager at the City & County of Honolulu's Office of Economic Revitalization.

The concept of legislative risk is well known to investors and policymakers. It is defined as “the potential that government regulations or legislation could significantly alter the business prospects of one or more companies, by creating changes that could positively or negatively affect investment holdings in that company”  — in other words, it is the idea that what a government does with policy affects how companies do financially.

Many financial analysts monitor political activity and offer stock predictions based on what they’re seeing with legislation, timing the market to buy or sell and make gains. But there is a dark side to this game.

A 2016 Bloomberg article, “Private Prison Stocks Are Surging After Trump’s Win,” reveals a grim picture of an incentive structure that encourages mass incarceration and a vast, unthinking and heedless majority who cannot or will not resist the appeal of profiting off of imprisoned individuals who come disproportionately from communities of color.

Investors listening to Donald Trump’s hateful rhetoric placed bets that that rhetoric would eventually translate into oppressive public policy. And they were right.

The private prisons industry, which has a powerful lobby, diversified from its targeting of minority Americans to include more undocumented migrants. Detaining immigrants in detention centers has become wildly profitable for private prisons and their investors.

We now see how brutal and dehumanizing this practice has become, leading to the child separation policy which has left at least 524 children involuntarily orphaned and thousands more sleeping in cages in unhygienic conditions.

Politics and money go hand in hand in America, right down to the stock portfolios of the country’s politicians. Flickr: Herval

What’s even scarier? There is little to no oversight on politicians’ intentional exploitation of legislative risk for personal gain.

Politicians, like anyone else, can invest in the stock market. If you’re curious, you can view the public financial disclosure documents of politicians in the House of Representatives here, the Senate here, and the Executive Branch here.

You can also get the financial disclosures of Supreme Court Justices, but it is a much more tedious process.

In a viral video, Rep. Alexandria Ocasio-Cortez exposed this corruption to the House Oversight and Reform Committee. In the hearing she played a “lightning round game” before a panel of top government experts in which she pretended to be a “bad guy” whose only purpose in politics was to make as much money as possible.

Vox reported: “She then asked a litany of questions. Can she run a campaign entirely funded by corporate political action committees? Yes. Can she use that money to make hush payments and pay people off to get elected? Yes. Once in office, can she influence and write laws that might affect the groups from which she’s taken special interest money? Yes. And can she hold stocks in companies the legislation she’s writing might boost? Yes.”

I was shocked. It is entirely legal for politicians to write laws beneficial to their own investment portfolios. This legal loophole allows politicians to enrich themselves at the expense of their constituents.

How would you feel if you found out your elected official:

  • Owned stock in private prisons, then passed legislation that contributed to mass incarceration and police brutality?
  • Owned stock in the fossil fuel industry, then advocated for offshore drilling, oil pipelines through indigenous lands, and fracking?
  • Owned stock in the military defense contractors, then promoted war, violence and aggression in foreign affairs?
  • Owned stock in Big Pharma, then defended astronomical price hikes on life-saving medication?

This undue influence in government threatens to undermine our democracy. Let’s look at an example of this corruption. According to Open Secrets, Republican Sen. Ted Cruz received more donations from the oil  and gas industry than any other candidate at a total of $798,479. He also owns up to $250,000 in Exxon Mobil stock and $100,000 in ONE Gas Inc. stock. Does it come as any surprise, then, that he is such a strong proponent of coal, hydraulic fracking and offshore drilling, which are proven to devastate the natural environment?

Texas Sen. Ted Cruz is one example of many: He owns hundreds of thousands of dollars in stock in the fossil fuel industry — and is an ardent proponent of legislation that favors the industry. Flickr: Gage Skidmore

Does the seemingly coordinated attack on net neutrality and our right to the free access of information online come as any surprise when tech stocks are the most popular in Congress?

Luckily, legislation has been introduced to stop this blatant misuse of political power. The Guardian reported that “Senator Elizabeth Warren introduced anti-corruption legislation in August 2018 that included a ban on members of Congress, senior congressional staff, cabinet secretaries, White House staff, federal judges and other officials from owning individual stocks, bonds, commodities, futures and other types of securities while in office. The senators Sherrod Brown and Jeff Merkley introduced the Ban Conflicted Trading Act in December [2019] to prevent members of Congress and senior staff from trading individual corporate stocks.”

Unfortunately, as long as the Republicans retain control of the Senate, this progressive legislation will never see the light of day.

What can we do? The first step is easy. Support politicians who believe in accountability and transparency. The second step is encoded into the First Amendment of our Constitution. Use your voice. Just as college students across the nation have used the #Divestment movement to get their administrations to divest from fossil fuels and private prisons, we must demand that our elected officials do the same.

Call, email, march, rally and speak up to your elected officials. Demand that they divest from fossil fuels, private prisons, forest clearing, animal testing companies, arms and weapons manufacturers, Big Tobacco, factory farms, pesticides, companies that exploit cheap or slave-like overseas labor that would violate U.S. labor laws, companies that deal with oppressive foreign regimes or dictatorships and companies with a history of labor rights and human rights abuses.

Be relentless in your demands. Not only may we see mass financial divestment from these destructive industries, we may see systemic changes as we remove another incentive for lawmakers to pass terrible corporatist policy and questionable subsidies.

Divestment isn’t the golden ticket to a more just, peaceful and sustainable society, but it’s a start. This peculiar legality is rife with conflicts of interest and is not on many folks’ radar.

With change, we may see a more compassionate conception of capitalism. We may finally see the growing sustainable development movement get its fair shake.

And we may finally see a growing social enterprise sector succeed in finding market-driven innovations to our most pressing social, civic and environmental issues.

All opinions are those of the author and do not necessarily reflect those of the City & County of Honolulu. 

Community Voices aims to encourage broad discussion on many topics of community interest. It’s kind of a cross between Letters to the Editor and op-eds. This is your space to talk about important issues or interesting people who are making a difference in our world. Column lengths should be no more than 800 words and we need a photo of the author and a bio. We welcome video commentary and other multimedia formats. Send to news@civilbeat.org. The opinions and information expressed in Community Voices are solely those of the authors and not Civil Beat.

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About the Author

Sultan White

Sultan White is the Innovation & Technology Manager at the City & County of Honolulu's Office of Economic Revitalization.

Latest Comments (0)

Isn’t the PURPOSE of running for office, to get rich? My favorite is the frantic trading and selling/buying of stocks by politicians with insider information from secret briefings just as Covid was picking up steam earlier this year. The rich get richer and the uninformed, unprivileged and poor stay clueless.

WhatMeWorry · 2 years ago

Pointing fingers at stocks and investment yet the author did not once mention the Clinton Foundation and their "pay for play" access to influence.  It just shows that if you want to root out corruption you need to follow the money. Cronyism and corruption is bound to happen when you don't have term limits or safeguards in place to monitor conflicts of interest.

jaytee777 · 2 years ago

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