NEW YORK (MintPress)—President Obama was in populist mode when delivering this week’s 2012 State of the Union address to millions of Americans, hoping to make his case for another term in office, and he was taking on more than just Wall Street. “Send me a bill that bans insider trading by members of Congress,” he urged. “I will sign it tomorrow.”
In fact, there is already a bill in both chambers of Congress, the Stop Trading on Congressional Knowledge (STOCK) Act, which would bar lawmakers from trading stocks based on economic or political information they receive at congressional briefings. It would also require members of Congress to publicly detail each transaction they make within 30 days; they currently have a year to disclose trades.
The US Senate and the US Supreme Court are the only two out of more than 900 federal bodies that have no rules or laws preventing them from trading stocks based on nonpublic information they gain on the job. And although the U.S. House of Representatives Ethics Manual states that its members should “never use any information coming to him confidentially in the performance of governmental duties as a means for making private profit,” it is still legal to do so.
.
Genesis of the STOCK Act
The STOCK Act was originally introduced in the House of Representatives in March, 2006 by Brian Baird of Washington and Louise Slaughter of New York, both Democrats, but it died in committee. It was reintroduced and died again in committee in both 2007 and 2009. In March, 2011, Tim Walz, a Democrat from Minnesota, reintroduced the Act, and it eventually gained more co-sponsors.
Things quickly began heating up after 60 Minutes reported on November 13, 2011 that several members of Congress used insider information for personal gain. The STOCK Act immediately won dozens of additional co-sponsors in the House. Later that month, Republican Scott Brown from Massachusetts filed the Act in the Senate. Democrat Kirsten Gillibrand from New York soon filed even more stringent measures in the Senate, and the two versions were ultimately merged.
.
House Majority Leader intervenes
In December, 2011, Republican House Majority Leader Eric Cantor of Virginia suddenly put on the brakes, indefinitely postponing a vote, stating that “a large group of bipartisan members of the committee felt the legislation was flawed and being recklessly moved soley in response to media pressure.”
Yet the move upset even members of his own party. Republican Congressman Walter Jones, for one, called it “absolutely unacceptable” and “petty”. Cantor later promised the Act would come back in the first couple months of 2012, but so far it is nowhere to be seen.
.
Popular outcry
There are a number of grass roots efforts aimed at getting the bill back on track. Members of the online community Reddit are among those up in arms, with one of many related postings on its website this week reading “We need uproar on Eric Cantor’s actions!”
Rick Smith, a financial writer for the popular investing website The Motley Fool who has for years been championing laws to stop members of Congress from profiting off of private information, has also started an online petition to drum up public support. He is now just 512 signatures away from his goal of 5,000.
.
Momentum growing
Meanwhile, there has been a flurry of activity in the wake of Obama’s speech. In a brief exchange while shaking hands, Senator Brown told the President, “My insider trading bill is on Harry’s (Senate Majority Leader Harry Reid) desk right now. Tell him to get it out.”
Reid later told reporters he saw no reason why the STOCK Act shouldn’t move forward, and his office made it clear to the Homeland Security and Governmental Affairs Committee today that they are prepared to allow a vote on it as early as next week.
There are still, potentially, some compromises to be made. A spokesman for Elizabeth Warren, the Harvard professor who is a strong Democratic challenger to Senator Brown, says she thinks the bill should be even tougher. According to her spokesperson, “The Senator’s bill would still allow for members of Congress to own stock related to issues they are dealing with and that is a loophole that needs to be closed.”
During his State of the Union address, Obama also said he wanted to “limit any elected official from owning stocks in industries they impact.”
Source: MintPress