WASHINGTON (CBS/AP) – The Senate on Thursday sent President Barack Obama a scaled-down bill to explicitly ban members of Congress, the president and thousands of other federal workers from profiting from nonpublic information learned on the job.
Both the House and Senate overwhelmingly have approved separate versions of the STOCK Act, which stands for Stop Trading on Congressional Knowledge. A segment on CBS’ “60 Minutes” in November said that members of Congress were profiting from inside information, giving new impetus to legislation that had languished for years. Minority Leader Nancy Pelosi (D-San Francisco), was among the prominent legislators featured in the report.
Obama has said he would sign the bill.
In an unusual move, the legislation passed unanimously without a vote on the measure itself. Passage was automatically triggered by a procedural motion that was approved on a 96-3 vote. The lawmakers who voted no were Republican Sens. Tom Coburn of Oklahoma, Richard Burr of North Carolina and Charles Grassley of Iowa.
The bill would give the public a more frequent look at financial transactions of government officials. A driving force has been Congress’ focus on its own dismal approval ratings, which ranged from 12 to 19 percent in polls over the last several weeks.
Public reports would be posted online either 30 days after the individual was notified of a transaction in his or her account or 45 days after the transaction. The House currently posts disclosure information on the Internet, but the Senate still requires people seeking the data to appear personally in a Senate office building.
Lacking enough votes, Majority Leader Harry Reid abandoned the Senate’s own, stronger bill and decided to accept the House legislation, which stripped out two key provisions from the bill that originally passed the Senate.
One was designed to strengthen criminal laws in public corruption cases, including restoration of tools used by prosecutors that were limited by a Supreme Court ruling.
The second, which was more controversial, would have required registration and public reports—similar to those filed by lobbyists—by anyone selling inside information learned from members of Congress and their staffs.
Opponents of regulating so-called political intelligence operatives substituted a study to learn more about individuals and firms collecting and selling information.
Federal officials, including members of Congress, are not excluded from federal laws prohibiting insider trading. But there is little public information showing that members of Congress have been investigated.
Recently, it was learned the Office of Congressional Ethics was looking at the trading activities of Rep. Spencer Bachus, R-Ala. In the two months surrounding the 2008 financial collapse and subsequent $700 billion economic bailout passed by Congress, Bachus made more than three dozen trades. The OCE is an independent ethics office of the House, run by a board outside of Congress.
Bachus, now chairman of the House Financial Services Committee but then the panel’s senior Republican under a Democratic chairman, participated in closed briefings on the crisis by Federal Reserve Chairman Ben Bernanke and then-Treasury Secretary Henry Paulson. He’s denied using inside information, and subsequent records show he incurred a net loss of $19,490.
Bachus has denied any wrongdoing.
The bill has a number of additional provisions, including one
major exemption. The frequent reporting will not include transactions in widely held investment funds that are publicly traded, have diversified assets and are not controlled by the covered government official.
The bill also adds stronger ethical and legal provisions.
It would deny federal retirement benefits to the president, vice
president or an elected official of a state or local government convicted of certain felonies. It also would prohibit senior executives of mortgage giants Fannie Mae or Freddie Mac from receiving bonuses while the companies are under government control. And it would expand the definition of public corruption crimes and increase maximum penalties.
It also requires officials to disclose the mortgages on their primary residences, a provision that has been exempt from reporting requirements.
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