US Congress Defangs Enforcing Limits on Its Own Insider Trading

Adam Taggart
By Adam Taggart on Mon, Apr 22, 2013 - 3:22pm

You may have heard about the STOCK Act. It was a much-ignored bill that sought to make insider trading by US Congress members illegal. (Yes, up until recently, it was perfectly legal for your elected representative to do this)

After the bill was featured on 60 Minutes, generating no small amount of public ire, suddenly Senators and Representatives were hot to jump into the righteous fray in support. On April 4, 2012, President Obama signed the Stop Trading On Congressional Knowledge (STOCK) Act into law.

Fast-forward to last week, when the Administraion and Congress worked to remove much of the bite of this act quietly and out of the public spotlight.

From NPR:

But on Monday, when the president signed a bill reversing big pieces of the law, the emailed announcement was one sentence long. There was no fanfare last week either, when the Senate and then the House passed the bill in largely empty chambers using a fast-track procedure known as unanimous consent.

In the House, Majority Leader Eric Cantor, R-Va., shepherded the bill through. It was Friday afternoon at 12:52. Many members had already left for the weekend or were on their way out. The whole process took only 30 seconds. There was no debate.

"There weren't too many members of Congress who were aware of this legislation," says Craig Holman, the government affairs lobbyist for Public Citizen. "And I suspect very, very few understood what a sweeping radical change it is to the STOCK Act."

One big change to the act made it much harder to actually perform the work to police and identify bad actors:

To understand how the law changed, I asked Holman to meet me in the basement of the Cannon House Office Building.

"This is where the public records are kept, for those who can handle traveling to Washington, D.C.," Holman explained.

That's right. If you want to look up the financial disclosure forms filed by high-level congressional staffers — say, to find out whether they've been using the privileges of their positions to make well-timed stock trades — you have to come to this office.

Holman showed me how it works. You have to enter your name and address into a computer, and then you can search. But you have to know the name of the person you are searching for. If he or she has filed a financial disclosure form, it will come up as a PDF, which you can print at a cost of 10 cents a page.

"The database itself is almost meaningless," says Holman. He says the only option for those who want to get a comprehensive look at what some 2,900 staffers have filed is to review the cases one by one. "And that's just too big a job for anybody to do."

The STOCK Act was supposed to make this task significantly easier. Records for members of Congress, the executive branch and their staffs were supposed to be posted online in a searchable, sortable and downloadable format.

No surprise, those who advocated for the original version's constraints are up in arms:

But Lisa Rosenberg, a lobbyist for the Sunlight Foundation, which advocated for the STOCK Act, says Congress went too far.

"It's really shocking that they used basically the situation of questions about whether some language in the bill was overbroad to just gut the bill — to gut the transparency measures that apply to themselves," she says.

Read the full text of NPR's coverage here.

When we at Peak Prosperity predict that, when developments begin to get away from the central planners in the future "they'll just change the rules", it's steps like this that give us confidence in that prediction...

Note: If you're reading this and are not yet a member of Peak Prosperity's Civil Liberties Group, please consider joining it now. It's where our active community discusses changes being made to our personal freedoms - as doing so will help us understand what is happening, and how we want to deal with them. Simply go here and click the "Join Today" button.

4 Comments

Arthur Robey's picture
Arthur Robey
Status: Diamond Member (Offline)
Joined: Feb 4 2010
Posts: 3936
Corruption and the Lawmakers.

The reason that we pay judges exorbitant salaries is to put them beyond the reach of corruption.

Perhaps the same principle should apply to Lawmakers.

This will be expensive so we need less piggies at the trough. How much of the supporting circus can be done by robots? A little creativity is called for.

Travlin's picture
Travlin
Status: Diamond Member (Offline)
Joined: Apr 15 2010
Posts: 1322
Would you buy a used car from these people?

This is a good example of why Americans rate Congress only slightly higher than a used car sales person.  But hey, three years ago Congress rated worse, so things are getting better.  Aren’t they?

Travlin

KathyP's picture
KathyP
Status: Bronze Member (Offline)
Joined: Jun 19 2008
Posts: 84
Mind Boggling

A legislative body legislating that they can break laws.  The corruption is beyond belief.

gillbilly's picture
gillbilly
Status: Gold Member (Offline)
Joined: Oct 22 2012
Posts: 423
A Change of Clothes

My impression of new legislation that is supposed to regulate the regulators is one of merely changing clothes. The body underneath still continues to rot. Arthur, I disagree, paying them more would only justify their power and salaries (I make more, therefore I'm worth more and deserve more), they would just continue on their merry way. I was never a fan of term limits since terms are already supposed to be limited by the voting process, but the PR machine works its magic, so maybe we should limit all politicians to one term. Get in, get something done for the good of the people, then you're out. No more professionalizing politics. Pay them less so we get some non-experts in there. I can hear the arguments..."you can't get anything done in one term, blah, blah," but they barely get anything done now, and what they do get done is usually in their best interest.

The logic of "we need to pay our politicians high salaries to attract the best" has created the worst aggregate of leaders. We don't need more changes of clothes.

Okay, my political rant is over...

Have a nice day!

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