In March, the Senate passed the 21st Century ROAD to Housing Act, which sponsor Senator Elizabeth Warren said would “boost housing supply and bring down costs.” The bill passed the Senate with broad support from both Republicans and Democrats. In fact, there was only one Senate Democrat who voted against the bill — the senior United States Senator from Hawai’i, Brian Schatz.
At the time of the vote, Schatz said he didn’t support the bill because of a provision which requires large investors who own more than 350 single-family or duplex homes to sell those properties after seven years. Schatz argued that the provision, aimed at getting single family homes into the hands of real people instead of investors, would “stifle the supply of rental construction.”
But new reporting suggests that Schatz’s lone wolf vote may have had something to do with his wife’s financial ties to the exact class of institutional investors who would be affected by the requirement. Schatz’s wife owns a real estate consulting firm that works with “real estate companies outside of Hawai‘i that need local expertise,” such as private equity firms with single-family housing development project holdings that could be impacted by the ROAD provision.
While it’s impossible to say if his wife’s business interests directly impacted Schatz’s vote, it’s still eyebrow-raising that a Democratic senator voted at odds with his entire caucus. Especially since Schatz is often identified as Schumer’s pick to succeed him as leader of the Senate Democrats.
In terms of the slate of scandals rocking the Hill (not to mention the White House), Schatz’s vote may not seem like the most important headline when it comes to the crisis of basic ethical standards infecting politics. Indeed, unlike many other figures animating politics in the Trump era, we are not suggesting that Schatz has broken any ethics laws, or even violated any existing ethics rules which bind our representatives.
What we are saying is that Schatz’ distinct break from the party line, paired with the issue of his spouse’s work, could create the appearance of impropriety — appearances which current ethics laws aren’t adequately suited to safeguard against.
Schatz’s vote, in our view, creates an opportunity to examine a much broader issue: the fact that our politicians can follow the letter of existing ethics laws and still create problematic situations rife with opportunities for personal profiteering because of outdated ethics regimes that have long failed to meet 21st century realities.
Senate ethics rules, for example, were primarily written for a time in which a politician was in all likelihood a man and significantly more likely to be the sole breadwinner of his family. Our current ethics regime has not caught up to the modern reality of dual professional couples and the complications a spouse’s employment and entanglements might cause for an elected official. It’s a complex issue, but it’s one of the many ethics concerns desperately in need of modern reform as Americans’ trust in government continues to erode.
The issue provides a reminder that if Democrats want to convince Americans they are distinct from the endless self-serving grift that is one of, if not the, defining features of the Trump administration, and indeed that they can be trusted to reform it for good if ever given power again, they must take even seemingly minor ethics questions seriously.