For years, Rep. Louise Slaughter, D-N.Y., toiled away in virtual obscurity on the Stop Trading on Congressional Knowledge Act.
“Six years,” says Slaughter. “A lot of hard work.”
The STOCK Act would, among other things, explicitly ban insider trading for members of Congress and their staffs.
“They’re supposed to be busy fixing the country, not trading stocks,” says Rich Smith, who has been looking into the issue for the Motley Fool, an investment adviser. “Especially at the time when they’ve got the information, in theory they know what’s going on and the rest of us don’t.”
The bill is being debated in the Senate and has strong bipartisan support, which is a rare event in this deeply divided Congress. But for years, arguments like Smith’s didn’t even move the needle on Capitol Hill.
“I was the guy [who] said, ‘I can’t believe this isn’t already law,’” says Rep. Tim Walz, D-Minn., who has been working on the STOCK Act with Slaughter.
More Than 270 House Co-Sponsors
But then, in mid-November, CBS’s 60 Minutes ran an explosive story about congressional insider trading, and other conflicts of interest. Almost immediately, the STOCK Act got very popular. Today Slaughter and Walz have more than 270 co-sponsors in the House from both parties, more than enough to pass it.
“It isn’t a partisan or ideological issue,” says Sen. Scott Brown, R-Mass, one of the STOCK Act authors on the Senate side, where it now has similarly strong support. “It’s about cleaning up Washington.”
There’s actually a pretty lively debate about whether members of Congress are truly exempt from insider trading laws. Many members of Congress, including Sen. Carl Levin, D-Mich., argue it’s already illegal. But he said on the Senate floor earlier this week, this bill will eliminate any doubt.
“It’s important to remove that doubt because any appearance of a breach in trust between Congress and our constituents is so corrosive to honest open and effective government,” says Levin.
With an argument like that — who could say no? It appears ultimately very few members of Congress will. But that doesn’t mean the STOCK Act is on a glide path to passage, because, this is Congress we’re talking about here.
Hitting A Few Bumps
Senators have now offered 20 amendments, and counting. Some of them have nothing to do with congressional stock trades, or anything even remotely close. It’s not clear when the Senate will get to the point of voting on the bill itself. And in the House, Majority Leader Eric Cantor, R-Va., says he doesn’t intend to hold a vote until the bill gets even tougher.
“If the Senate produces a bill that we believe is strengthened and something that is workable, that certainly will be something well received by the House,” said Cantor at a press conference. “If it does not, it is my intention to move a bill, to bring a bill to the floor in February that does.”
Cantor would like other transactions like land deals included, and would like to require members to publicly disclose their trades more quickly.
“This idea that, you know, we have to have a pinch here and a twist there is really, I think, just stalling,” says Slaughter.
She and Walz are circulating what’s called a discharge petition, to try and force a floor vote on their bill.
“I think when 271 members of this House have spoken, ‘We want to pass this bill,’ I don’t know why the leadership should stand in the way of that,” Slaughter says.
Even with this apparent drama, Walz is quite certain one way or another, President Obama will sign the long-suffering STOCK Act. It’s only a matter of time.
“I think at this point in time, when people try and run all the calculus on this, they come to the conclusion that it really is, ‘Do this: It’s what the public wants,’” says Walz. “It’s the right thing to do. And the lucky thing is, it’s good politics, too.”
Some outside observers and even members of Congress argue this bill may be more symbol than substance. But right now, the idea of getting something done, and maybe restoring a little faith in Congress along the way, is mighty appealing to members on both sides of the aisle.