As Chairman of the Committee on House Administration, I carefully reviewed current law and concluded that the prohibition on insider trading and the criminal penalties associated were already applicable – and not just to Members and staff of the legislative branch.
Though we create and uphold the laws of the land, we are not above them.
Nonetheless, as their elected representatives, we owe our constituents the assurance that the decisions we make here in the People’s House are in fact for the people – not ourselves. And this assurance must be government-wide.
Passage of S. 2038, known as the STOCK Act, is one step toward providing that assurance. With the help of the Committee on House Administration, the House strengthened the bill by prohibiting Members, officials and employees from every branch of government from using non-public, privileged information for personal gain and creating a disclosure mechanism for finding out when they do. Of course we didn’t stop there.
We expanded the requirements to report financial transactions, extended restrictions on government officials negotiating for future employment, and ended preferential treatment of government officials by prohibiting them from accepting exclusive, sweetheart deals on IPOs. Our additions also include denying pensions for Members convicted of crimes and eliminating bonuses for senior executives at Fannie Mae and Freddie Mac.
Finally, the House addressed concerns about the practice of communicating with government officials to gain information about future actions that can be used to inform financial investors. Regulating that practice could stifle citizens’ First Amendment right to communicate with their elected representatives, so we directed the Government Accountability Office to analyze its scope and impact to help Congress determine what further action might be called for. This study is a prudent step that should come before and not after new reporting requirements.
Americans not only need to know that all of their government officials are subject to insider trading laws, but they need proof we are adhering to them. This legislation provides taxpayers with the assurances and tools necessary to hold government officials accountable for their actions.
As civil servants, we must be held to a higher level of scrutiny that instills public confidence in our ability to put the needs of our constituents before our own personal financial gain.
Today’s signing of the STOCK Act is a victory for government accountability.
Rep. Lungren (R-Calif.) is the chairman of the Committee on House Administration.