A best-selling book – and a controversial “60 Minutes” report – get results. Congress is falling all over themselves to pass legislation banning insider trading by its members, two months after Peter Schweizer’s “Throw Them All Out,” his expose on the practice, was published, and discussed on “60 Minutes.”
The U.S. Senate passed legislation Monday to ban stock trading by its members. In a 93-2 vote – Republicans Richard Burr and Tom Coburn were the only “no” votes – the Senate agreed to the bill. Five senators did not vote.
The bill says that “no member of Congress and no employee of Congress shall use any nonpublic information derived from the individual’s position as a member of Congress or employee of Congress, or gained from performance of the individual’s duties, for personal benefit,” according to the New York Times. The bill also says that members of Congress have “a duty arising from a relationship of trust and confidence” with the public.
The Times also says that “federal securities law does not explicitly exempt members of Congress, but experts disagree on whether and when lawmakers may be found to have violated the law,” and that “the bill is meant to eliminate any ambiguity.”
In addition, the legislation, called the Stop Trading on Congressional Knowledge Act (STOCK Act), would require that members of Congress reveal within 30 days whether they bought or sold any stock, bond, commodity, or other such financial transaction. The information would be on a website for the public to see. Sens. Joseph Lieberman and Susan Collins drafted the bill. There are two other similar bills also in the Senate, one written by Sen. Scott Brown and the other by Sen. Kirsten Gillibrand.
The House of Representatives has their own legislation on its issue. Rep. Louise Slaughter has been trying to get her bill on the issue passed since 2006, but it was only after the recent attention on the issue that she was able to get a slew of cosigners to the legislation.
The outrage by the book and the TV report – not to mention upcoming elections – was echoed by President Obama, who called in his recent State of the Union address for legislation to be passed on the issue, and said that he would sign such a bill. But the president also called for something even stricter on the legislation, which is not included in the Senate legislation that just passed, calling for Congress to “limit any elected official from owning stocks in industries they impact.” That seems like a pretty common-sense addition to the bill, but it hasn’t happened so far.
The STOCK Act seems to have bipartisan support, but what does not have bipartisan support is the so-called “Buffett rule” legislation, introduced by Sen. Sheldon Whitehouse. It is not likely that Republicans will join in on supporting the legislation, which would raise taxes on the rich. Sen. Orrin Hatch, who serves as ranking Republican on the Senate Finance Committee, has already voiced his opposition to the legislation.
Lisa Swan is a Feature Writer for the Compliance Exchange. She is also a columnist for The Faster Times and a blogger for Subway Squawkers. Her work has also appeared in the New York Daily News, Yahoo Sports, Huffington Post and the books Graphical Player 2011 and Graphical Player 2010.