Hidden Agendas, Huge Risks: The Importance of Financial Disclosures

Welcome to the November 2025 edition of our newsletter!  In this issue, we’ll examine the financial disclosure process for federal officials and discuss its importance in identifying conflicts of interest.

Ethical Safeguards Against Conflicts of Interest

One of the key reforms of the post-Watergate 1970s political era was the requirement for federal elected officials and political appointees to disclose their personal investments.  The need for disclosure becomes obvious as policymakers gained ever greater regulatory influence over the markets in which they – and, importantly, their spouses – are invested.  The idea was that disclosure would be an impediment to self-serving legislative or executive branch actions – politicians, knowing that such conflicts would create a public outcry, would pre-emptively avoid taking actions that could be seen as inappropriate, or divest themselves of a conflicted asset before sponsoring a bill.

This system has held up, to varying degrees, although a recent strain of political nihilism shows its obvious weakness – how effective can it be if politicians lack shame, and thus don’t care about any consequence beyond their own enrichment?

Fortunately, some officials still hold themselves accountable: Federal Reserve Board Governor Adriana Kugler resigned in August 2025 after it was made public that she made investments during the Fed’s “quiet period” the year before.  Her final Form SF-278, the disclosure filed with the U.S. Office of Government Ethics (“OGE”), was not certified by anyone at the Federal Reserve, which is a highly unusual step – an agency’s ethics office personnel typically review a filing, then submit it to OGE on the filer’s behalf.  No agency official certified Kugler’s last filing, which she submitted on September 11, 2025, while her September 2024 filing did receive such an internal review prior to its OGE submission,

Financial disclosure is a critical firewall against outright corruption, and an important source of information regarding what might be motivating a public official’s position on an important policy issue.  Members of Congress are currently debating a bill that would amend the 2012 STOCK Act in various ways, including potentially banning lawmakers, their spouses, or children from owning stock at all (https://cha.house.gov/press-releases?id=FDF56AEC-1B06-48ED-A908-CB4705C0B746).   This comes several years after some of whom have profited handsomely from investments while giving favorable treatment to the same high-flying technology companies in which they or their spouses have invested.

Financial disclosures, such as those submitted to OGE, list any positions held outside of government (such as adjunct teaching roles), any speaking fees or other gifts received, and both the filer’s employment and investment income and assets, as well as those of their spouse.  Most importantly, the dates and amounts of specific transactions are also disclosed, which can help researchers, and the public, establish potential cause and effect scenarios between the transactions and any relevant policy decisions.