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This blog was updated on May 4th with the addition of stock ownership by several Virginia lawmakers.
By Kayli Ottomanelli, Clean Virginia Advocacy Fellow
Nearly 60 U.S. Congress members made headlines last month when they violated federal law by failing to properly report their stock ownership and financial trades in accordance with the decades-old Stop Trading on Congressional Knowledge, or Stock Act. These elected officials have faced widespread criticism for using their political positions and access to nonpublic information for personal financial gain.
Unfortunately, the issue of elected officials serving their stock portfolios rather than their constituents extends beyond just the federal level – it exists here in Virginia, as well. Currently, six members of the Virginia General Assembly own substantial quantities of stock in Dominion Energy. According to annual candidate and incumbent disclosures, which were updated this month, these lawmakers own anywhere from $825,000 to $1.25 million in Dominion stock combined. Additionally, three members of the Virginia legislature, Minority Leader Tommy Norment, Senator Bill DeSteph, and Delegate John Avoli each owned at least $250,000 worth of Dominion Energy stock alone in 2021.
Although opponents of stock-ban legislation have asserted that the United States is a free-market economy and everyone, including elected officials, should be able to participate in stock trading, this argument becomes problematic when lawmakers are purchasing stock in the corporate monopolies they are tasked with regulating, as is the case with Dominion Energy. Captive customers of utility monopolies, like the two of three Virginians that are Dominion customers, lack the luxury of shopping around for a better deal on their electricity. It is a clear conflict of interest for elected officials to participate in legislative matters in which they have a vested financial interest.
Currently, conflict of interest laws require Virginia lawmakers to recuse themselves from legislative matters when they have a personal interest in the affected corporation. Although well-intentioned, in practice this legislation is unenforceable under Virginia’s lax disclosure rules. The Virginia General Assembly Conflicts of Interest Act requires any legislator who receives $5,000 or more in dividend payouts from stock ownership to disqualify themselves from participating in votes on relevant legislation. However, candidate and incumbent disclosure rules only require elected officials to disclose their investments within an estimated range that spans nearly $50,000, rather than reporting the exact value. As a result, it is impossible to tell just how much legislators are financially benefiting from certain votes.
Due to these legislative loopholes, elected officials have continued to participate in matters in which they have a vested financial interest. For example, with at least $250,000 in Dominion stock holdings, Senator DeSteph likely received nearly $9,000 in dividends from his shares in Dominion Energy last year, clearly placing him above the $5,000 threshold set by the General Assembly Conflicts of Interest Act. Despite this, he is still actively participating in legislative matters that impact how the corporate utility is regulated. In the 2020 legislative session, Senator DeSteph cast the only opposing vote on a piece of bipartisan utility legislation intended to give the State Corporation Commission more discretion to reduce the rate of return on common equity for investor-owned electric utilities. This begs the question: how can we expect legislators to fairly regulate Dominion Energy, when they themselves directly profit off of the corporation?
To strengthen existing legislation and hold lawmakers accountable, Delegate Dan Helmer introduced a bill (House Bill 1252) during the 2022 legislative session to prohibit any member of the General Assembly from owning stock in public service corporations like Dominion during their term of office. This bill would directly eliminate conflict of interests and ensure legislators are acting in the interest of Virginians, not their wallets. Passing this common-sense bill could also help restore public trust and faith in our institutions. Unfortunately, this bill was sent to the House Rules Committee where it never received a hearing. By denying the legislation a hearing in committee, lawmakers effectively killed the bill without having to vote on it. This method of killing legislation is particularly underhanded, as it allows elected officials to sidestep taking a stance on this issue on public record and dodge any electoral consequences for their actions.
Share this blog post now on social media to help protect future good governance legislation and to take a stance against our elected officials being allowed to profit off of their legislative decisions.