Endangered lawmakers move to back bill banning congressional insider trading

Politically vulnerable lawmakers are lining up as co-sponsors of legislation that would ban congressional insider trading.

A “60 minutes” report earlier this month indicated that members of Congress have been trading stocks based on knowledge gained from their positions, a practice that does not violate the law.

Before the report, a House bill that would outlaw the practice only had nine co-sponsors. In the week following the “60 Minutes” segment, that number jumped to 92. Of the 83 additions, 19 are facing competitive reelection races as defined by the Cook Political Report.

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Republican Sen. Scott Brown, who is seeking reelection in blue Massachusetts and will likely face Elizabeth WarrenElizabeth WarrenWarren goes on tweetstorm over GOP ObamaCare repeal bill Warren: Dems should campaign on single-payer healthcare plan Senate Dems step up protests ahead of ObamaCare repeal vote MORE, a champion of Wall Street reform, introduced a version in the upper chamber two days after the report aired. Two of the four co-sponsors, Sens. Dean HellerDean HellerOvernight Healthcare: GOP infighting erupts over bill | How Republican governors could bring down ObamaCare repeal | Schumer asks Trump to meet with Dems GOP infighting erupts over healthcare bill Budowsky: Rising up vs. TrumpCare MORE (R-Nev.) and Olympia Snowe (R-Maine), are facing challenging reelection battles in 2012.

Sen. Kirsten GillibrandKirsten GillibrandSenate Democrats: ObamaCare repeal fight isn't over yet Bipartisan senators seek to boost expertise in military justice system Mattis gaining power in Trump’s Cabinet MORE (D-N.Y.) introduced a third version three days later. She and four of the seven co-sponsors are up for reelection in 2012. Sens. Jon TesterJon TesterOvernight Regulation: Labor groups fear rollback of Obama worker protection rule | Trump regs czar advances in Senate | New FCC enforcement chief Trump's 'regulatory czar' advances in Senate Gianforte causes stir after becoming newest House member MORE (D-Mont.) and Claire McCaskillClaire McCaskillMcCaskill attended reception at Russian ambassador's residence in 2015 Senators question need for HHS cyber office Overnight Cybersecurity: Obama DHS chief defends Russian hack response | Trump huddles on grid security | Lawmakers warned about cyber threat to election systems MORE (D-Mo.), who both face races rated as toss-ups, are among those that have signed on.

The House bill, titled the Stop Trading on Congressional Knowledge (STOCK) Act, was first introduced in 2006 by then-Rep. Brian Baird (D-Wash.) and Rep. Louise Slaughter (D-N.Y.). The measure was reintroduced it in each Congress since then, but the bill never got out of committee and never received more than 14 co-sponsors until the “60 minutes” piece aired.

Now, both the House Financial Services and Senate Homeland Security and Governmental Affairs Committees have scheduled hearings on the legislation next week.

Politically vulnerable House members who have cosponsored the measure this month include Reps. Allen West (R-Fla.), Jason Altmire (D-Pa.), Larry Kissell (D-N.C.), Charles Bass (R-N.H.), Dave ReichertDavid ReichertTime to fix our national parks House GOP not sold on Ryan’s tax reform plan Lawmakers push back against Trump offshore drilling review MORE (R-Wash.) and Leonard Boswell (D-Iowa.).

Baird is not cynical about the sudden support for his bill after it languished for so long.

"I'm just happy that it's getting attention now," Baird told The Hill. "I don't want to pass judgment on the past. Let's move forward and get it passed."

House Minority Leader Nancy Pelosi (D-Calif.) and Speaker John BoehnerJohn BoehnerChaffetz calls for ,500 legislator housing stipend GOP super-PAC promises big spending in 2018 Ryan reminds lawmakers to be on time for votes MORE (R-Ohio) lashed out at the “60 Minutes” report, which focused on the two House leaders, among others. Neither Pelosi nor BoehnerJohn BoehnerChaffetz calls for ,500 legislator housing stipend GOP super-PAC promises big spending in 2018 Ryan reminds lawmakers to be on time for votes MORE is a co-sponsor.

Andrew Eggers, a lecturer in government at the London School of Economics, and Jens Hainmueller, assistant professor of political science at MIT, co-authored a study in June of this year finding that congressional stock portfolios actually underperformed the market index by 2-3 percent between 2004 and 2008. This result runs counter to a study by Georgia State University professor Alan Ziobrowski, cited by Brown in his hearing request, which found that in the 1990s, senators beat the market by 12 percent and representatives beat it by 6 percent on average annually.

In playing down the substantive importance of the STOCK Act, Eggers and Hainmueller also point to the fact that congressional ethics rules already prohibit the practice. The House Ethics Manual states that "all government employees, including officeholders" should "never use information received confidentially in the performance of governmental duties for making private profit."

But they told The Hill the bill does have political value.

"I think the value is sort of symbolic," Hainmueller said. "It probably will help salvage whatever credibility Congress has left."

"If I'm a member of Congress, I want to be on the side of whatever reform is being proposed, especially if I'm facing reelection," Eggers said.

The "60 minutes" report alleged that Boehner and Pelosi have traded stocks based on information gained from their positions.

The CBS News show reported that Boehner bought stock in private health insurance companies in 2009 while helping kill the public option. Boehner responded by saying he is not involved in his day-to-day trading. In addition, a House GOP aide said, "The idea that the Republican Leader in the House opposed the 'public option' — policy favored by the left of the left — for personal profit is, frankly, stupid."

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The report also alleged that while Pelosi was Speaker in 2008 she bought stock in Visa while not bringing to the floor a bill that would have limited fees credit card companies could charge. A Pelosi spokesman, Drew Hammill, likewise fired back by pointing out that the bill in question was only reported out of committee on the last day of the session before the election and while the House was busy considering the TARP financial rescue.

The STOCK Act would bar members and their employees from using or sharing information they gain from their positions in financial trades. It requires firms that specialize in obtaining information that could be financially useful to register like lobbying firms. The measure also mandates members and their employees to report financial trades in excess of $1,000 within 90 days.

Baird hopes that this reporting requirement will be tightened to within 48 hours of the trade, which is the way he originally wrote it. In the bill's struggles before its sudden popularity, this provision changed. "I was convinced to change it to 90 days in the hope of getting more co-sponsors," Baird said. "Obviously that didn't work out."

Other members who have co-sponsored the bill and are not in competitive reelection races include Reps. Chris Van Hollen (D-Md.), Ted PoeTed PoeHouse bill threatens Russia with nuclear treaty suspension For the sake of police, don’t back the Back the Blue Act Will McConnell and Ryan put party over country in defense of Trump? MORE (R-Texas) and Barney Frank (D-Mass.).