By Peter Schroeder - 12/15/11 12:50 AM EST
A Senate committee easily cleared legislation explicitly prohibiting members from profiting by trading on inside information, despite objections from some GOP lawmakers who called it unnecessary and politically motivated.
The Senate Homeland Security and Governmental Affairs Committee advanced the bill by a vote of 7-2 Tuesday. GOP Sens. Tom Coburn (Okla.) and Ron Johnson (Wis.) dissented, calling the bill unnecessary and rife with potential unintended consequences. Sen. John McCain (R-Ariz.) also opposed the bill, but was absent from the vote.
“We need to send a strong message making absolutely clear that members of Congress and their staff are not exempt,” said Sen. Susan Collins (R-Maine), the committee’s ranking member. “The simpler and more direct we can be, the better.”
But Coburn contended that the rush to pass such a bill was driven by a need for political cover, not the need for clearer laws.
“We’re in a rush to prove to the American public that we’re not guilty,” he said. “We shouldn’t be in a super hurry to fix it because it solves a political problem for us.”
Committee Chairman Joe Lieberman (I-Conn.) argued that suspicions about insider trading in Congress could make it harder for the legislature to actually do its job.
“If the trust in this institution goes much lower than it is right now, it really compromises our capacity to govern,” he said.
Sen. Scott Brown (R-Mass.), who introduced legislation along with Sen. Kirsten Gillibrand (D-N.Y.) that formed the basis of Tuesday’s bill, saw no problem in the rapid pace, while prodding House Republicans to follow suit.
“We’re actually ahead of the House on this, which is a good thing,” Brown said, suggesting it puts “pressure on the House to move their bill forward.”
House Financial Services Committee Chairman Spencer Bachus (R-Ala.) had planned for a quick markup of similar legislation in the House, but that vote has been tabled indefinitely. Bachus was singled out in the “60 Minutes” report for certain profitable trades made during the height of the financial crisis. He has denounced the accusations and said none of the financial moves he made were based on private information.
Following the report, Bachus began to push the harshest version of the insider-trading legislation.
House Majority Leader Eric Cantor (R-Va.) put the brakes on the bill, as Bachus’s move had not been approved by GOP leadership. Cantor told Bachus that several committees have jurisdiction on the matter.
“Since we learned Eric Cantor is blocking the STOCK Act, we are considering any and all options to bring this bill to the floor,” said Sara Severs, spokeswoman for Rep. Tim Walz (D-Minn.), one of the bill’s lead sponsors. “Members of Congress should have to play by the same rules as everyone else.”
The bill prohibits members of Congress, their staff and other government employees from making financial trades based on private, material information obtained in the course of their public service. The House version of the bill also would prohibit people outside of Congress from trading on private information obtained from within the government, in an effort to crack down on the burgeoning industry of “political intelligence.”
But the Senate panel delayed work on that aspect of the bill, instead requiring the Government Accountability Office to study the matter. Lieberman expressed concern that such a prohibition could be overly broad and could even restrict what members can tell constituents about pending legislation.