House GOP removes political intel-lobbyist rule from STOCK Act

A provision that would require political intelligence consultants to register as lobbyists for the first time has been removed from House legislation intended to curb insider trading by lawmakers. 

The decision by House Majority Leader Eric Cantor (R-Va.) and GOP leadership could set up a fight with the Senate, which approved a bill that includes the language. The Senate approved its version of the Stop Trading on Congressional Knowledge (STOCK) Act in a 96-3 vote. Sen. Chuck Grassley’s (R-Iowa) amendment that would have political intelligence consultants register under the Lobbying Disclosure Act (LDA) was added to the bill after a 60-39 vote in its favor.

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A spokeswoman for Cantor said the provision was “extremely broad” and could have unintended consequences on who would have to register as lobbyists.

“This provision was extremely broad, and its impact would have raised more questions than it answered,” said Laena Fallon, a Cantor 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. For example, members of the media who report on federal and congressional issues to a paid subscriber list might have to register as a political intelligence consultant for their reporting under the provision.”

In a news release, Cantor said the legislation was “a strengthened and expanded STOCK Act” and “provisions that would have made the bill unworkable or raised more questions then they answered” were removed.

Other changes in the House version of the bill include an expansion of its anti-insider-trading restrictions to the executive branch. In addition, it will prohibit lawmakers, executive branch officials and their staffs from participating in Initial Public Offerings.

Regarding political intelligence consultants, the bill authorizes a study of the industry by the Government Accountability Office, with consultation from the Congressional Research Service.

Lobbyists and operatives in the political intelligence arena had bristled at the language in the Senate bill. The Securities Industry and Financial Markets Association on Saturday held a hastily arranged conference call to discuss the language, and the group’s managing director of federal affairs said it could force research analysts to register as lobbyists.

— This story was updated at 11:28 a.m.