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 Ann WarrenElection Countdown: Trump confident about midterms in Hill.TV interview | Kavanaugh controversy tests candidates | Sanders, Warren ponder if both can run | Super PACs spending big | Two states open general election voting Friday | Latest Senate polls On The Money: Midterms to shake up House finance panel | Chamber chief says US not in trade war | Mulvaney moving CFPB unit out of DC | Conservatives frustrated over big spending bills Warren suggests Mulvaney broke law by speaking to GOP donors 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 Arthur HellerElection Countdown: Trump confident about midterms in Hill.TV interview | Kavanaugh controversy tests candidates | Sanders, Warren ponder if both can run | Super PACs spending big | Two states open general election voting Friday | Latest Senate polls Trump to fundraise for Heller, Tarkanian in Nevada The Hill's Morning Report — Sponsored by United Against Nuclear Iran — Kavanaugh and his accuser will testify publicly MORE (R-Nev.) and Olympia Snowe (R-Maine), are facing challenging reelection battles in 2012.

Sen. Kirsten GillibrandKirsten Elizabeth GillibrandGillibrand: Kavanaugh accuser shouldn't participate in 'sham' hearing Booker: It would be ‘irresponsible’ not to consider running for president Ex-GOP donor urges support for Dems in midterms: 'Democracy is at stake' 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 TesterJonathan (Jon) TesterTrump Jr. campaign event looks for new venue after Montana restaurant declines to host CBS Poll: Missouri, Montana Senate races in dead heats Dems play waiting game with Collins and Murkowski MORE (D-Mont.) and Claire McCaskillClaire Conner McCaskillMcCaskill to oppose Kavanaugh nomination Wyden says foreign hackers targeted personal accounts of senators, staffers Election Countdown: Trump confident about midterms in Hill.TV interview | Kavanaugh controversy tests candidates | Sanders, Warren ponder if both can run | Super PACs spending big | Two states open general election voting Friday | Latest Senate polls 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 (Dave) George ReichertElection Countdown: GOP worries House majority endangered by top of ticket | Dems make history in Tuesday's primaries | Parties fight for Puerto Rican vote in Florida | GOP lawmakers plan 'Freedom Tour' Democrat Kim Schrier advances in Washington primary Overnight Energy: Koch backs bill opposing carbon taxes | Lawmakers look to Interior budget to block offshore drilling | EPA defends FOIA process 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 Andrew BoehnerNancy Pelosi: Will she remain the ‘Face of the Franchise’? Jordan hits campaign trail amid bid for Speaker GOP senator says he 'regularly' considers leaving Republican Party MORE (R-Ohio) lashed out at the “60 Minutes” report, which focused on the two House leaders, among others. Neither Pelosi nor BoehnerJohn Andrew BoehnerNancy Pelosi: Will she remain the ‘Face of the Franchise’? Jordan hits campaign trail amid bid for Speaker GOP senator says he 'regularly' considers leaving Republican Party 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 PoeLloyd (Ted) Theodore PoeCook shifts two House GOP seats closer to Dem column Five races to watch in the Texas runoffs Five Republican run-offs to watch in Texas MORE (R-Texas) and Barney Frank (D-Mass.).