Navigating minefield of STOCK Act

Eric Cantor was playing with political dynamite when he spearheaded the House’s effort to ban insider trading for members of Congress. But despite the hopes of some Democrats, it didn’t blow up in the majority leader’s face.

Cantor’s (R-Va.) shepherding of the politically delicate legislation through the lower chamber revealed new wrinkles in his leadership style. 

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For the past several years, Democrats have sought to portray Cantor as a partisan leader who has no interest in compromising. But on this bill, Cantor took on a Republican committee chairman and worked behind the scenes with Democrats. 

In a move that raised eyebrows, the No. 2-ranked House GOP leader last fall appeared to thwart Financial Services Committee Chairman Spencer Bachus’s (R-Ala.) effort to mark up the Democratic-sponsored bill. 

Sources close to Cantor noted that members on both sides of the aisle had problems with the Stop Trading on Congressional Knowledge (STOCK) Act, which is sponsored by Reps. Tim Walz (D-Minn.) and Louise Slaughter (D-N.Y.).   

Still, the bill has been a legislative locomotive, going from nine co-sponsors to 286 in just over three months after “60 Minutes” highlighted the measure last year. 

Republican officials have privately said that Bachus, who was a central figure in the television segment, felt compelled to move the bill quickly. 

Cantor, however, wanted to study, expand and build support for an insider-trading bill that would garner support from a large majority of House GOP legislators. In doing so, the majority leader read Throw Them All Out, the book by Peter Schweizer that served as the basis for the “60 Minutes” report. 

Rep. Tim Huelskamp (R-Kan.) said Cantor picked the right time to bring the bill forward and give members an opportunity to fully grasp its ramifications. 

Huelskamp pointed out that House Republicans were consumed with the payroll tax fight in December and taking up the STOCK Act at that time “would have been a real distraction.” 

Cantor was adept, in the eyes of his colleagues, in dealing with the particularly sensitive matter.

“Eric did a great job about going to the heart of the fears [members] had about ethics rules,” Huelskamp said.

As the House deliberated, the Democrat-led Senate pounced. Senate Majority Leader Harry Reid (D-Nev.) bypassed committee action and quickly passed the chamber’s version of the STOCK Act. 

In a late-January conference call, Sen. Debbie Stabenow (D-Mich.) said, “It’s regrettable that the majority leader of the House stepped in to stop the chairman of the Financial Services Committee from having a markup on the STOCK Act.”

In his State of the Union address, President Obama challenged Congress to “send me a bill that bans insider trading by members of Congress; I will sign it tomorrow.” 

House Minority Whip Steny Hoyer (D-Md.) suggested that Cantor was obstructing the bill because it was offered by Democrats. 

Even members of Cantor’s party chastised him.

Rep. Walter Jones (R-N.C.) said in December that inaction on the STOCK Act was “absolutely unacceptable” and indicated his own leadership was being “petty.”

Cantor had said in December that he wanted to expand the scope of the STOCK Act. Regardless, pressure was building on Cantor, who has been called “Mr. No” by Democratic aides. 

Cantor, who is not shy in mixing it up with Democrats, refrained from responding to the attacks and worked to win over skeptical House Republicans. 

From late December until its passage in February, Cantor met with scores of members, talked with the counsels on six of the committees with jurisdiction and briefed the conservative Republican Study Committee (RSC) and the entire House GOP conference, according to sources familiar with the situation.

In an unanticipated twist as the measure neared consideration on the House floor, Cantor praised Walz and Slaughter in a press release. He also called Walz for help to pass the insider-trading bill. 

“I didn’t necessarily expect him to [call], but I was very appreciative when he did,” Walz said in an interview with The Hill. 

Walz and other Democrats were not pleased that Cantor stripped out a provision that would have required political intelligence analysts to register as lobbyists. 

There were members of his party who wanted the Minnesota Democrat to oppose it, Walz acknowledged.

“I’m not interested in trying to jam [Cantor] up. There’s a school of thought that says, ‘Don’t give him anything because he’s under the blocks on that.’

“I said, ‘Nahhh, we all are.’ I have no reason to not believe him. I understand that we differ on policy, but I’ve never seen him not honor his word, and that’s what he did,” Walz said. 

Not one Democrat opposed the bill as it sailed through the House, 417-2. 

The key to securing Walz’s backing was a provision calling for a study on the use of political intelligence.

Freshman Rep. Cory Gardner (R-Colo.) said that he and his colleagues worried that the political intelligence language would have had unintended consequences. Critics have said it was written so broadly that it could apply to the media and members of local Rotary clubs.

Sen. Chuck Grassley (R-Iowa) strongly disagrees. Grassley, who wrote the political intelligence amendment that passed 60-39, has accused House Republicans of doing Wall Street’s bidding. 

House GOP leaders are waiting on Reid, who voted against the Grassley amendment, to announce conferees or work out a deal among the leaders to advance the final measure.

A Senate Democratic aide told The Hill that they “haven’t decided on the path forward yet, but there will be an announcement after we get back from recess.”