The Senate approved a House-passed bill aimed at preventing insider trading by members of Congress and thousands of executive branch officials. The legislation now goes to President Obama for his signature.
Senators agreed to discard a more extensive version of the bill they passed last month in favor of the House measure. That meant dropping amendments including measures to require people engaged in “political intelligence activities” to register as lobbyists and to help prosecution of public corruption.
The STOCK Act seeks to clarify an ambiguity in the 1934 Securities and Exchange Act by prohibiting members of Congress and their staffs from trading on information they obtain from their work that is not available to the general public. It would require disclosure 30 days after any securities trade of more than $1,000 and would compel all disclosures to be available electronically.
But both the House and Senate versions included a provision to compel all disclosures to be available electronically. Confusion over how many federal employees would be required to disclose information emerged in February after an amendment from Sen. Richard Shelby, R-Ala., broadened the language to cover thousands more lower level federal employees. Under the 1978 Ethics in Government Act, high-level federal appointees must make their financial disclosures public, while a vaster universe of mid-level employees must disclose confidentially to their agency ethics officer.
The House version now headed to President Obama would cover only the smaller group of top officials, some 28,000, according to the Office of Government Ethics. Soon after it passed the House, Senior Executives Association President Carol A. Bonosaro and General Counsel William Bransford wrote a letter to Senate leaders saying the act’s “extensive, burdensome and public reporting requirements will have a chilling effect on those employees considering entering the SES.”
Passage of the bill on Thursday completes a process that senior lawmakers in both parties considered unnecessary as policy but an important public relations exercise in response to reports of lax restrictions on insider trading by members. Senate Majority Leader Harry Reid, D-Nev., said he moved the House measure because Republicans blocked a conference committee to reconcile differences between the chambers’ measures. But Reid chose to quietly move the House bill rather than force a fight, to the chagrin of some senators.
Sen. Chuck Grassley, R-Iowa., who sponsored the political intelligence amendment, said he voted against cloture on the bill to protest its exclusion. “The majority leader’s heavy-handed tactics leave few options for restoring the provision this go-round,” said Grassley, who pledged to try again.