The House easily approved legislation on Thursday making it clear that insider trading by members of Congress is illegal.
In a 417-2 vote, the House approved the Stop Trading on Congressional Knowledge (STOCK) Act. Every House Democrat voted in favor of the bill despite complaints that Majority Leader Eric CantorEric Ivan CantorBottom line Virginia GOP candidates for governor gear up for convention Cantor: 'Level of craziness' in Washington has increased 'on both sides' MORE (R-Va.) and Republicans substantially weakened the Senate-passed version. The only two "no" votes were from Republicans: Reps. John Campbell (Calif.) and Rob WoodallWilliam (Rob) Robert WoodallDraft Georgia congressional lines target McBath, shore up Bourdeaux The tale of the last bipartisan unicorns McCarthy guarantees GOP will take back House in 2022 MORE (Ga.).
The House and Senate will now have to work out a compromise agreement between the two versions of the bill.
The vote was several years in the making, as many House Democrats had been sponsoring legislation for the last few Congresses that would clarify a prohibition on trading on non-public knowledge that members gain from doing their job. Last November, House members flocked to a bill from Rep. Tim Walz (D-Minn.) after "60 Minutes" reported that some members, including Minority Leader Nancy Pelosi (D-Calif.) and Speaker John BoehnerJohn Andrew BoehnerRift widens between business groups and House GOP Juan Williams: Pelosi shows her power Debt ceiling games endanger US fiscal credibility — again MORE (R-Ohio), appeared to have benefited from non-public information.
Still, rhetorical support for the bill was tempered by the House GOP decision to amend the Senate-passed bill. Most importantly, the House version of the bill does not include language clarifying that political intelligence consultants must register as lobbyists.
Several Democrats said they were disappointed in that omission, but said it is still important to pass the bill in order to get it to a House-Senate conference. Pelosi said explicitly that many Democrats were holding their nose on this issue in order to re-fight it in conference.
"Pass this bill, go to conference," she said. "It's very important that the House and Senate meet to discuss these very important issues.
"I don't want anyone to interpret the strong vote for it to be a seal of approval," she said.
Democrats argued during the debate that the GOP language doesn't do nearly enough to regulate political intelligence consultants, and noted that GOP Sen. Chuck GrassleyChuck GrassleyAnother voice of reason retires Overnight Health Care — Presented by Carequest — FDA moves to sell hearing aids over-the-counter McConnell: GOP should focus on future, not 'rehash' 2020 MORE (Iowa) is also angry at this change.
"I think his statement yesterday tells you all you need to know about his desire to see this language inserted back into the STOCK Act before it reaches the president's desk," said Rep. Louise Slaughter (D-N.Y.). She and other members read out Grassley's statement from earlier this week that said the Senate "clearly voted to try to shed light on an industry that's behind the scenes."
The House bill does require a study on whether and how to regulate political intelligence consultants, which Pelosi dismissed as "just a dodge." But Republicans said they stripped out this language because it's not so easy to regulate such consultants.
The Senate language "raises an awful lot of questions," Cantor said. "It think there's a lot of discussion and debate about who and what would qualify and fall under the suggested language that came from the Senate."
Rep. Dan Lungren (R-Calif.) added that lobbying is a constitutional right, and that more time is needed to study how best to balance that with the demand for more transparency.
"It is a constitutionally protected activity," Lungren said of lobbying. "Those are difficult conflicting interests that have to be carefully determined if we're going to deal with the question of political intelligence. It does us no good to pass a bill that will be rendered unconstitutional."
While the House bill does not include Senate language on political intelligence gatherers, Republicans noted that the bill is stronger than the Senate version in other ways. House Judiciary Committee Chairman Lamar Smith (R-Texas) said the bill includes broader disclosure requirements, and would apply not just to members of Congress, but officers and staff in the executive and judicial branches.
"The American people deserve to know that no one in any branch of government can profit from their office," he said. "All three branches should be held to the same standard, because all three branches must be worthy of the public's trust."
The bill would also deny members of Congress their pensions if they are convicted of a crime, and adds a provision prohibiting members of Congress from getting early access to initial public stock offerings, something the GOP labeled the "Pelosi provision" to poke at the Democratic leader.
While Republicans broadly supported the bill, several have pointed out along the way that it is currently illegal for anyone to be involved in insider trading, and that the bill merely says explicitly that these rules apply to members of Congress and the government. Rep. Woodall, who voted against the bill, said Wednesday that it's a disservice to Congress to act as if it is currently legal for members to engage in this activity.
"The STOCK Act has been characterized … as to prevent insider trading by members of Congress, as if members of Congress are allowed to participate in insider trading today, and they are not," Woodall said.
"It is against the law; it has been against the law," Lungren added on the House floor Thursday.