Congress Wrote Tax Law That Fattened Members' Own Portfolios
From the 2017 pass-through deduction to pandemic stock dumps, public records show lawmakers voting on legislation that directly benefited their disclosed personal holdings.
The single most documented fact in six years of congressional financial records is this: Senator Ron Johnson of Wisconsin initially opposed the Tax Cuts and Jobs Act of 2017, then flipped his vote to yes after Senate negotiators expanded Section 199A — the provision that delivers a 20% deduction to owners of pass-through businesses like S-corporations. Johnson's 2017 Annual Financial Disclosure, filed with the Senate Financial Disclosures Office in May 2018, lists an ownership interest in Pacur, Inc., a plastic sheeting manufacturer organized as an S-corporation — precisely the class of entity Section 199A was written to benefit. The National Federation of Independent Business, which lobbied for pass-through protection and spent $1.2 million on TCJA advocacy per its LDA Form LD-2 filings for the third and fourth quarters of 2017, is recorded in OpenSecrets FEC data as a PAC contributor to Johnson's campaigns. Johnson has not released personal tax returns, so the precise annual dollar value flowing from Section 199A to his Pacur holdings cannot be independently confirmed. That gap is the first of many in this story.
Johnson was not alone among TCJA architects and supporters whose disclosed holdings aligned with the bill's provisions. Senator Bob Corker of Tennessee, who also initially opposed the bill citing deficit concerns before voting yes on the final version, reported real estate limited partnerships and LLCs in his 2017 Senate Financial Disclosure — pass-through entities that benefit both from Section 199A and from the TCJA's preserved real estate depreciation rules. A late addition in the conference report, characterized by critics as the 'Corker Kickback,' specifically expanded the pass-through deduction for real estate investors. The International Business Times and The Intercept documented this alignment in December 2017. Corker denied knowledge of the provision's insertion. The conference report was drafted without a regular-order markup, and as of this writing, no public congressional record identifies who inserted the enhancement.
The same architecture — committee access, personal holdings, campaign contributions, legislative outcome — repeats in the pandemic trading record. On January 24, 2020, the Senate received its first classified briefing on COVID-19 severity, confirmed by Senate records. In the three weeks that followed, four senators disclosed stock transactions whose timing and composition raise documented questions. Senate Intelligence Committee Chairman Richard Burr of North Carolina executed 33 separate sell transactions totaling between $628,033 and $1.72 million on February 13, 2020 — one week before equity markets collapsed — according to his Senate Financial Disclosures as reported by ProPublica on March 19, 2020. The stocks sold included hospitality equities exposed to pandemic disruption. On February 7, six days before those sales, Burr published an op-ed on Fox News stating the United States was 'better prepared than ever before' for a pandemic. The Department of Justice opened an investigation in March 2020 and closed it in January 2023 without charges, stating it could not prove beyond a reasonable doubt that Burr traded on classified information. The evidentiary basis for that decision has not been made public.
Senator Kelly Loeffler of Georgia, then a member of the Senate Health, Education, Labor and Pensions Committee that received the January 24 briefing, disclosed that between January 24 and February 14, 2020, she and her husband Jeffrey Sprecher sold between $1.275 million and $3.1 million in equities while simultaneously purchasing stock in DuPont — a manufacturer of personal protective equipment materials — and Citrix Systems, whose remote-work technology would benefit from mass quarantine. Sprecher is CEO of Intercontinental Exchange, which owns the New York Stock Exchange. The DOJ opened and closed an investigation of Loeffler without charges in May 2020. A structural gap documented in Section 1.2 of the underlying intelligence analysis is directly relevant: spousal transactions, while disclosed on annual Senate Financial Disclosure forms, do not carry the same mandatory 45-day STOCK Act reporting requirement as direct member trades in all circumstances, creating a legal gray zone the Loeffler-Sprecher pattern illustrates in practice.
Senator Dianne Feinstein of California, a member of the Senate Intelligence Committee, disclosed that her husband Richard Blum sold between $1.5 million and $6 million in shares of Allogene Therapeutics between January 31 and February 18, 2020. Blum was a board member of Allogene at the time of the sales, per Business Insider's March 2020 reporting. Unlike Burr and Loeffler, Feinstein was not the subject of a publicly announced DOJ investigation. No explanation for that asymmetry has been offered by the Department of Justice in any public statement. Senator James Inhofe of Oklahoma, chairman of the Senate Armed Services Committee, also sold between $394,038 and $850,000 in stock in late January 2020 and stated the trades were executed by an independent financial advisor without his direction. The investment management agreements that would verify the independence of that account are not subject to public disclosure.
The financial regulation record adds a third strand to the documented pattern. The Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018, known as S.2155, raised the threshold at which banks are designated systemically important financial institutions from $50 billion to $250 billion in assets, exempting dozens of regional banks from enhanced Federal Reserve oversight. Senate Banking Committee Chairman Mike Crapo of Idaho led the legislation and received $1,502,950 from the commercial banking and financial sector in the 2017-2018 cycle, per OpenSecrets FEC data drawn from Federal Election Commission filings. Silicon Valley Bank spent $3.1 million lobbying on S.2155 per LDA Form LD-2 filings in the Senate Office of Public Records, and its assets sat near the old $50 billion threshold at passage. SVB's assets grew to $209 billion by March 2023, when the bank collapsed. The Federal Reserve's own post-mortem, released April 28, 2023, identified reduced supervisory intensity enabled by S.2155 as a contributing factor. Three Democratic senators — Heidi Heitkamp of North Dakota, Joe Donnelly of Indiana, and Jon Tester of Montana — joined the Republican majority to pass S.2155, each receiving financial sector contributions documented in FEC records.
The legal infrastructure governing all of this is, by the records, permissive to the point of symbolic. The STOCK Act of 2012 requires disclosure of personal securities trades within 45 days of transaction. The civil penalty for late filing is $200 — less than many Washington parking fines. No sitting member of Congress has been criminally convicted of insider trading while in office as of this writing. The pass-through deduction, the pandemic trades, the bank deregulation bill: in each case the public record documents the contribution, the holding, the vote, and the financial result. What the public record does not document — and what existing disclosure law does not require — is the internal deliberation connecting those data points.
What remains hidden is substantial and identifiable. Johnson's IRS K-1 filings from Pacur, Inc. would quantify precisely what Section 199A has been worth to him annually. The DOJ's investigative file on the Burr trading case, closed without charges, has not been released and could be sought under the Freedom of Information Act, though law enforcement investigative files carry broad exemptions. The investment management agreements for Inhofe's managed account would confirm or undermine the independence claim. Richard Blum's Allogene trading records and the specific Feinstein intelligence briefing dates could be cross-referenced through a Senate Ethics Committee inquiry — a body that has not opened a public proceeding on any 2020 pandemic trading. The conference report drafting records for the TCJA, which would identify who inserted the real estate pass-through enhancement that became the 'Corker Kickback,' remain undisclosed. The instrument that would begin to close these gaps is not new legislation but the enforcement of disclosure law that already exists: mandatory public release of investment management agreements for managed accounts, extension of the 45-day STOCK Act requirement to spousal trades without exception, and a civil penalty for late filing calibrated to deter rather than inconvenience. The records mapped above are what public law currently requires to be disclosed. The gaps mapped above are what it does not.