Sen. Chuck Grassley (R-Iowa) on Wednesday accused House Republicans of doing the bidding of Wall Street by abandoning his proposal to require more disclosure from the political intelligence industry.
House Majority Leader Eric Cantor (R-Va.) dropped Grassley’s provision from the House version of the Stop Trading on Congressional Knowledge (STOCK) Act. It would have required political intelligence consultants to register for the first time under the Lobbying Disclosure Act (LDA).
“It’s astonishing and extremely disappointing that the House would fulfill Wall Street’s wishes by killing this provision,” Grassley said in a statement. “If Congress delays action, the political intelligence industry will stay in the shadows, just the way Wall Street likes it.”
The White House piled on, accusing House Republicans of “caving to pressure from Wall Street lobbyists.”
“I was shocked to see that even this simple bill that would ensure that everyone plays by the rules is weakened,” said White House press secretary Jay Carney. “This should not be a partisan issue.”
A spokeswoman for Cantor argued that Grassley’s provision was dangerously overbroad and could have affected unintended parties, including members of the media.
“This provision was extremely broad and its impact would have raised more questions than it answered,” said Laena Fallon, Cantor’s spokeswoman. “Worse, the unintended consequences on the provision could have affected the First Amendment rights of everyone participating in local rotaries to national media conglomerates.”
The registration provision was intended to bring transparency to the growing political intelligence trade, which sees plugged-in tipsters marketing private congressional information to hedge funds and traders on Wall Street.
The version of the STOCK Act that passed the Senate last week was attracting opposition from Wall Street and K Street due to the provision.
Cantor dropped the registration requirement from the House version of the bill, replacing it with a provision that requires a government study on the issue.
Reps. Louise Slaughter (D-N.Y.) and Tim Walz (D-Minn.), the original authors of the legislation, said they were dismayed to see the registration requirement withdrawn.
“The thing we greatly feared has come upon us,” said Slaughter. “It has been weakened totally, as far as I’m concerned.”
Nonetheless, the two said they planned to support the House bill when it hits the floor on Thursday.
Cantor is bringing up the bill under a suspension of House rules. That will prohibit amendments, limit debate and require a two-thirds vote for final approval.
Fred Wertheimer, president of watchdog group Democracy 21, said by suspending the House rules, Cantor is blocking parts of the Senate bill that have been supported by a majority of lawmakers.
“They are basically using procedures to override the overwhelming will of the House,” Wertheimer said. “Majority Leader Cantor is afraid to have those issues come to a vote because I’m sure he knows that he would lose.”
Watchdog groups, as well as Slaughter and Walz, are eyeing a potential conference committee between the two chambers as an opportunity to put the political intelligence provision back in the STOCK Act.
“We are going to be supporting it ... with hopes and expectations we can go to conference,” Slaughter said.
“I’m happy we’re getting something going. Not ecstatic,” Walz added.
House Minority Leader Nancy Pelosi (D-Calif.) also announced her support for the House version of the STOCK Act despite the inclusion of what Republicans have dubbed the “Pelosi provision” to block lawmakers from participating in some stock sales.
A “60 Minutes” report last year that set off the legislative frenzy aimed at insider trading in Congress reported that Pelosi and her husband participated in an initial public offering (IPO) of Visa stock while Congress was weighing new regulations on the credit-card industry. Pelosi has denied any wrongdoing, and said she did not enjoy privileged access to the sale.
The STOCK Act unveiled in the House includes a provision that prohibits members of Congress from participating in IPOs that are not available to the general public. Other changes in the bill include an expansion of its anti-insider-trading restrictions to the executive branch.
Pelosi said on Twitter that she supported the bill, though she accused Cantor of watering it down.
Slaughter similarly accused Cantor of trimming the political intelligence registration requirement to accommodate special interests.
“Everybody can make a pretty educated guess on why it’s not there. ... Lobbyists,” she said.
Other lawmakers from both parties had issues with requiring political intelligence consultants to register as lobbyists.
Sen. Joe Lieberman (I-Conn.), who steered the Senate bill to the floor, had aired concerns about the reach of such registration and its First Amendment implications.
The original Senate version of the bill that hit the floor last week mirrored Cantor’s bill by requiring a Government Accountability Office (GAO) study of the political intelligence industry. Grassley’s amendment was adopted on a 60-39 vote, although both Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) opposed it.
Cantor also garnered criticism for dropping a provision from the Senate-passed STOCK Act that would have helped investigators and prosecutors go after public corruption. That measure was included in the bill by Sens. Patrick Leahy (D-Vt.) and John Cornyn (R-Texas).
“If we are serious about restoring faith in government and addressing the kinds of egregious misconduct that we have witnessed in recent years in high-profile public corruption cases, Congress must act now to enact serious anti-corruption legislation. The House Republicans’ version of the STOCK Act misses that opportunity,” Leahy said in a statement.
Cornyn’s office said it hoped the provision would be included in the final bill.
“There are a lot of moving parts right now and we are monitoring it closely. Our hope is the amendment will be included in final passage,” said Drew Brandewie, a spokesman for Cornyn.
Cantor’s spokeswoman said the bill was meant to stop congressional insider trading and that other provisions included in the legislation have raised “constitutional questions.”
“The purpose of the STOCK Act is to ensure that members of Congress do not use insider information gained through public office for personal profit. These other provisions raise broad constitutional questions, as the courts have pointed out on similar provisions,” Fallon said.
Amie Parnes contributed to this report.
This story was originally posted at 12:00 p.m. and has been updated.