Congress starts gutting the law prohibiting their insider trading


Obama signing the STOCK Act, last year. No fanfare, this week, for the change that hides transactions.

The legislative process on Capitol Hill is often slow and grinding. There are committee hearings, filibuster threats and hours of floor debate. But sometimes, when Congress really wants to get something done, it can move blindingly fast…

A year ago, President Obama signed the Stop Trading on Congressional Knowledge Act into law at a celebratory ceremony attended by a bipartisan cast of lawmakers…

The law wouldn’t just outlaw trading on nonpublic information by members of Congress, the executive branch and their staffs. It would greatly expand financial disclosures and make all of the data searchable so insider trading and conflicts of interest would be easier to detect.

On Monday, when the president signed a bill reversing big pieces of the law, the emailed announcement was one sentence long. There was no fanfare last week either, when the Senate and then the House passed the bill in largely empty chambers using a fast-track procedure known as unanimous consent.

In the House, Majority Leader Eric Cantor, R-Va., shepherded the bill through. It was Friday afternoon at 12:52. Many members had already left for the weekend or were on their way out. The whole process took only 30 seconds. There was no debate…

“There were particular concerns about risks for those who either travel overseas on government business or work overseas,” says Carol Bonosaro, president of the Senior Executives Association, who represents many of the 28,000 executive branch employees.

An independent study said there were also risks of identity theft, which she says the new law helps avoid…

The White House cited the independent report in explaining why the president signed the bill. And a spokesman for Cantor said the House and Senate were simply following recommendations of the study.

…Two major elements of the law remain. Insider trading is illegal, even for members of Congress and the executive branch. And for those who are still covered by the now-narrower law, disclosures of large stock trades are required within 45 days. It will just be harder to get to them.

Eric Cantor and his bubbas proved that legal chicanery is still the fastest and easiest thing to get through Congress. Making it difficult for voters to see what their elected representatives and staff are doing in bed with lobbyists is the opposite of transparency.

The president could have vetoed the bill and sent it back to the House and Senate for revisions that would have retained the original purpose – transparency in Congress and online access for voters. He chose to let the bill slide through as is.

I wonder what the next revision will be? After the 2014 elections, of course.

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