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Finally, a few weeks ago, “60 Minutes” did an exposé of the abuse. House co-sponsors of legislation to end Congressional insider trading jumped from nine to 131, and the number continues to grow. The Senate, which never even had a bill, now has two. The Senate Homeland Security and Governmental Affairs Committee held a hearing a week after the bills were introduced. The House Financial Services Committee, headed by Rep. Spencer Bachus (R-Ala.), who was singled out in the “60 Minutes” report, held a hearing on the long-stalled Slaughter-Walz bill Tuesday.
Adding insult to injury, though the insider trading law has never been applied to Congress, these hearings are producing statements from the House Ethics Committee, the Securities and Exchange Commission and some academics that the existing law really could apply to Congress, if properly interpreted and enforced.
It is reassuring that some of the enforcement officers are now signaling that they may indeed apply the law against insider trading to Congress, but let’s not take these signals as an excuse to once again kill the legislative fix. Confusion and disagreement reign over this point. The STOCK Act would make it clear and unambiguous that Congressional insider trading is illegal.
Just as importantly, there is no body more privy to a flood of insider information on economic trends than Congress, so the legislation would also require near real-time disclosure of trading activity by Members, staff and those who do business with Congress as a means to enforce the law.
The time to pass this legislation is now. With the federal government assuming an ever-larger role over the economy under the watchful eye of Congress, it is imperative that Congress act quickly to assure the nation that the government’s involvement is solely in the public’s interest.
Craig Holman is government affairs lobbyist for Public Citizen. Lisa Gilbert is deputy director of the group’s Congress Watch.