Buyer’s Remorse? Convicted Felons Would Lose Congressional Pension Under Reform

Yesterday, former Representative Steve Buyer (R-IN) was indicted by the Securities and Exchange Commission (SEC) for insider trading, a felony offense. If found guilty, he can be assessed fines and be sentenced to prison. Under reforms first enacted fifteen years ago, Buyer also faces loss of his congressional pension. While these laws should in theory protect taxpayers from paying benefits to convicted public servants, they have not yet succeeded in stripping a single congressional felon of a pension.

Congress enacted the Honest Leadership and Open Government Act (HLOGA) of 2007, strengthened by the Stop Trading on Congressional Knowledge (STOCK) Act of 2012, to cut off  taxpayer-funded pensions to Representatives and Senators convicted of certain corruption-related crimes, including insider trading.

The government's indictment against Buyer alleges that, in March 2018, he learned from a company executive that T-Mobile was planning on purchasing Sprint. The day after that conversation, he began purchasing Sprint stock and ultimately acquired $568,000 of the company's shares. Buyer made a profit of $107,000 once news of the merger leaked. In 2019, he was allegedly involved in a separate insider trading scheme that netted him profit of more than $227,000.

Rep. Buyer served in Congress for 18 years from 1993 through 2011. Assuming he maximized his annuity benefit while in office, Buyer was eligible for an annual pension of $48,000, plus annual cost-of-living adjustments. Because of his length of service and his year of birth, he was eligible to start collecting an early retirement at a reduced annuity when he turned 56 in November, 2014. He was able to start collecting the full annual amount when he turned 62. NTUF estimates that through 2022, he has potentially collected up to $340,000. 

Despite the pair of reform laws, Buyer can remain eligible to continue collecting his congressional retirement benefit even if he is found guilty. That’s because a former member's pension is only stripped upon "final conviction" — which means not until after all legal appeals have expired, a process that can drag on for years. According to news reports, Buyer has vowed to contest the charges. If found guilty, he will have the opportunity to file an appeal after he is sentenced, enabling him to continue to collect his annual pension, worth up to $49,000 this year including COLAs.

Last year, the Senate passed a bill to close the appeal loophole. The No CORRUPTION Act, sponsored by Senators Jacky Rosen (D-NV) and Rick Scott (R-FL) would strip pensions upon conviction. If a member's appeal is subsequently successful, the annuity amount would be paid out retroactively. The House version of the bill, introduced by Ralph Norman (R-SC), was approved by the Committee on Oversight and Reform..

Recently, NTUF reviewed all of the former members of Congress who have been convicted of a felony since enactment of HLOGA and can't find that any members have lost their pension. They escaped this penalty either due to the appeal loophole, presidential pardons, or because they were found guilty of crimes not covered by the laws. The NO CORRUPTION Act would finally start to protect taxpayers from paying benefits to congressional felons.