House Republicans fast-track insider trading bill
WASHINGTON (AP) — House Republicans have rejected from a Senate measure a requirement that people who collect information from Congress for investors register like lobbyists.
The provision had been included in a bill the Senate passed last week to specifically ban insider trading by members of Congress, their senior aides and other top-level officials in the government.
The House is expected to overwhelmingly pass the bill on Thursday. Negotiators will have to iron out differences between the two versions, but lawmakers now suffering poll approval ratings in the teens are eager to get it finished and signed by President Barack Obama.
Under the Republican bill, a lawmaker's financial transactions would have to be publicly posted online, either 30 days after a covered person was notified of a transaction in his or her account or 45 days after the transaction.
The measure won House Democratic Leader Nancy Pelosi's endorsement Wednesday. The former speaker said she supports a provision aimed directly at banning lawmakers from using their positions to gain special access to initial public offerings of stock.
CBS' "60 Minutes" last fall questioned an investment in an initial public offering of Visa stock by Pelosi's husband in 2008 at a time when legislation to rein in credit card fees was before the House. Pelosi said she did nothing wrong, and the investment was unrelated to the bill.
On Wednesday, she and other Democrats said Republicans had weakened the bill by removing the Senate-passed registration and disclosure requirement aimed at so-called political intelligence firms.
These are companies that try to pick up details about legislation and oversight activities from lawmakers and their aides, and then sell it to investment firms and other clients. The Senate bill would force them to register and then file reports disclosing their activities as lobbyists do now.
The growing political intelligence industry lobbied hard to get the House Republicans to modify the Senate's plan or eliminate it. House Majority Leader Eric Cantor, R-Va., substituted a congressional study of these firms — essentially taking no action.
Laena Fallon, a spokeswoman for Cantor, said the Senate provision could violate First Amendment rights of individuals who have nothing to do with gathering information for investors. "This provision was extremely broad and its impact would have raised more questions than it answered," she said.
Sen. Charles Grassley, R-Iowa, who inserted the language in the Senate bill, was furious over its removal.
"It's astonishing and extremely disappointing that the House would fulfill Wall Street's wishes by killing this provision," Grassley said. "The Senate clearly voted to try to shed light on an industry that's behind the scenes. If the Senate language is too broad, as opponents say, why not propose a solution instead of scrapping the provision altogether?"
Presidential spokesman Jay Carney complained the bill "was being weakened behind closed doors" at the behest of Wall Street lobbyists.
The bill is entitled the STOCK Act, which stands for Stop Trading on Congressional Knowledge.
Fallon, the Cantor spokeswoman, said the bill is broad enough to cover real estate transactions and other types of investments — basically, any investment based on nonpublic knowledge learned through one's official duties.
The House bill also would prevent lawmakers convicted of a felony from collecting their government pensions. It includes a long list of felonies that would trigger loss of the benefits, including bribery, fraud and perjury.
The Office of Government Ethics, the ethics watchdog for the executive branch, said about 28,000 high-level employees file annual, public financial disclosures of their holdings and liabilities. They, like members of Congress, would have to supplement the annual filings with reports of new transactions.
The bill also would cover the president and vice president. President Barack Obama has said he would sign it.
Members of Congress and their staffs already face the same penalties as other investors who attempt insider trading, though no member of Congress in recent memory has been charged with that offense.
In 2005, the Securities and Exchange Commission and Justice Department investigated then-Senate Majority Leader Bill Frist's sale of stock in his family's hospital company, but no charges were brought against the Tennessee Republican.