Two weeks after President Obama signed the Stop Trading on Congressional Knowledge Act, leaders of the Senior Executives Association have written congressional oversight leaders requesting repeal of two provisions requiring federal employees to disclose financial information, calling them “burdensome, complex and, most important, unnecessarily invasive of personal privacy.” At least one recipient may be willing to look at the issue more closely.
Carol A. Bonosaro, president of the Senior Executives Association, and William Bransford, SEA general counsel, on April 13 addressed their complaints to the chairmen and ranking members of the House Oversight and Government Reform and the Senate Homeland Security and Governmental Affairs committees. They said some of the law’s provisions “are detrimental to career senior executives and, as we had previously warned, these intrusive requirements are already having a chilling effect on the recruitment and retention of career executives,” including those in senior-level and scientific and professional positions.
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. During congressional deliberations, its scope was expanded to include some 28,000 federal executives, and SEA has been opposed to it all along.
The letters specifically cited Sections 6 of the law, which requires senior executives to file a report “not later than 30 days after receiving notification of a completed financial transaction,” and 11(b), which requires the Office of Government Ethics “to create a public database of financial disclosure reports filed by executive branch employees.” according to the SEA leaders.
“Senior executives could easily fall afoul of the rule without realizing they have done so,” the letters stated. “Many career senior executives use financial advisers or portfolio managers, because, they, like most Americans, do not have time to monitor the constant gyrations of the modern stock market. If a senior executive does use a financial adviser or portfolio manager, he or she might not get word of individual financial transactions within the 30-day window, or have the ability to receive the necessary information to make reports on individual transactions.”
The requirement for a public database, the executives warned, will violate rights to privacy and pose a risk that “supervisors within a federal agency could be subject to unwarranted personal scrutiny by their subordinates, causing tension and problems in the workplace. Many executives are concerned about the very real possibility of identity theft.”
The law also introduces new requirements for disclosure of information on spouses’ and dependent children’s finances. That information, though not planned to be made available on a public website, could be accessed by members of the public filing a request.
The executives warned that association members have expressed concern the STOCK Act will “jeopardize their ability to plan effectively for retirement.”
Few on Capitol Hill responded to inquiries as to the prospects for repeal. A House staffer noted the original House version did not include provisions covering the federal employees, and the expansion was advanced by Sen. Richard Shelby, R-Ala., and House Majority Leader Eric Cantor, R-Va. Neither would comment, nor would representatives of most lawmakers to whom the letter was addressed: Reps. Darrell Issa, R-Calif., and Elijah Cummings, D-Md., and Sen. Susan Collins, R-Maine.
A spokeswoman for Sen. Joe Lieberman, I-Conn., chairman of the Homeland Security and Governmental Affairs Committee, said he “has always been concerned that some provisions applying to the Senior Executive Service may be overly broad, and he is open to closer examination of the problem.”