Monday, December 12, 2011
Stock Act and Political Intelligence II: Why current provisions in the bill may not suffice?
Keywords or Terms: Stock Act; CBS 60 Minutes; Financial Congressional Committee deliberations; Congressman Brian Baird (D-WA) and Congresswoman Louise M. Slaughter Rep (D-NY); Congressman Tim Walz (D-MN); Equality under the Law; Congressional Retirement System; Social Security System; PPACA; Change
Provisions in the Stop Trading on Congressional Knowledge (STOCK) Act as introduced in 2006 are probably insufficient in 2011; considering what we now know has been going on with political intelligence, and our lawmakers. It is easier denied than corroborate; however, no one may doubt that to some extent, congressional lawmakers may have taken advantage of political intelligence for financial gains.
The new congressional interest in the Stock Act seems to have emanated from the CBS 60 Minute expose on political intelligence and the use or non-use of insider information for financial benefit by lawmakers. Even if congressional lawmakers fail to associate the new interest and multiple congressional sponsorships of the bill with CBS 60 Minute Steve Kroft’s interview, there are enough questions that need some answers; and any further foot dragging in congress will be tantamount to bridge of faith. For example, some congressmen in committee deliberations insinuated that current overwhelming interest in the act has more to do with perception of congress rather than a genuine need to have in place an effective law that prevents use of insider trading for financial benefit by congressional lawmakers; and or their cohorts.
Consequently, in the opinion of Chairman of the House Financial Services Committee, Spenser Bacchus (R-Ala), this is more of a window dressing rather than an effort to ensure that lawmakers play by the same rule that all other Americans are required. Given the benefit of doubt to the Chairman’s assertion, the questions on the mind of the public include: Why are some lawmakers intrepid about the stock act restoring public confidence in congress, while others are not? Why are some lawmakers still advocating the indefensible in light of current information regarding what may have transpired with lawmakers and political intelligence? Will the current provisions in the re-introduced and probably overwhelmingly re-sponsored Stock Act in congress, suffice? Can we have congressmen abide by all the laws, other Americans are called to uphold?
Imagine, public records show that this act was first introduced by former congressman Brian Baird (D-WA) and Congresswoman Louise M. Slaughter Rep (D-NY) in 2006; followed up by a joint press release on the Political Intelligence Disclosure Act (H.R. 5617), in March of 2008. Five years had elapsed since the august appearance of the bill in congress. The bill had gathered little or no steam since then and it appears that the bill was moribund except for the CBS 60 Minute Expose. Yet, at the new Congressional Financial Services Committee deliberations this past week, some lawmakers were hardly interested in the movement of this bill in congress; and, if they were, their actions do not match the urgency of the public’s interest. Without making flagrant and probably insupportable comments, it is more than a conviction that the public wants congress to pass the Stock Act, today, and not tomorrow or sometime else.
The notion that using political intelligence for financial gains is inappropriate and unacceptable for anyone, lawmakers or the public, is well grounded. Any effort to thwart the renewed interest and or the urgency of passing the Stock Act this time around is clearly a show of ineptitude by any lawmaker. Any insinuation that a few may be opposed to urgent consideration and passing of the bill will be considered a travesty; and probably, encroaches on the rights of all American citizens. If initial sponsors of the bill were wooed away from pressing on until something was done in congress about the bill, the fact that the public now has information regarding the potential for abuse of insider trading information, make the urgent deliberation and passing of the bill, unavoidable and paramount in the current congressional session. The same lawmakers who may have issues with the current renewed interest from some lawmakers and public may want to consider, if they were in the public’s shoes, would they allow lawmakers from abiding by the same laws they are called to uphold?
According to the new lead sponsors of the bill, five years after the first effort, Congresswoman Louise Slaughter (NY-28), Ranking Member of the House Rules Committee, and Congressman Tim Walz (MN-01), the bill is expected to prohibit insider trading on Capital Hill. Further, the bill is expected to: 1) Prohibits Members and employees of Congress from buying or selling securities, swaps, security based swaps, or commodity futures based on nonpublic information they obtain because of their status; 2) Prohibits Executive Branch employees from buying or selling securities, swaps, security based swaps, or commodity futures based on nonpublic information they obtain because of their status; 3) Prohibits those outside Congress from buying or selling securities, swaps, security based swaps, or commodity futures based on nonpublic information obtained from within Congress or the Executive Branch; 4) Prohibits Members and employees of Congress from disclosing any non-public information about any pending or prospective legislative action for investment purposes; 5) Requires Members and employees of Congress to report the purchase, sale or exchange of any stock, bond, or commodity future transaction in excess of $1,000 within 90 days. Members and employees who choose to place their stock in holdings in blind trusts or mutual funds would be exempt from the reporting requirement; and, 6) Requires firms that specialize in “political intelligence” and that obtain their information directly from Congress to register with the House and Senate, much like lobbying firms are now required to do. The urgency of these provisions may not be over-emphasized; yet in the estimation of some congressmen, this is just a fad, an event that would soon go away, if congress takes on other objections.
The documented pace and frequency of use of insider information and probably collusion between lawmakers and lobby groups in Washington DC as exposed by CBS 60 Minutes, make one wonder whether other issues related to the use of insider information to benefit the interests of our lawmakers are not ripe for visitation or re-visitation in-depth. If it has taken us six years to appreciate the relevance of this bill for congressional responsibility and governance; how long do we expect it will take before the Act is passed into law? Do we have to wait another five years? The current steam behind the stock act must now be exploited to expand the possibilities in the Act, considering that CBS 60 Minutes raised some issues that interest many members of the public. Although, it seems that a few lawmakers are unfazed with the findings of CBS News network, it is hardly impossible to justify any action that may derail the renewed interest in the Act. Two certainties at this time forward are: 1) the practice of using political intelligence for the benefit of a few is poaching and hardly portrays leadership in lawmaking; 2) any action that gives anyone an undue advantage over the rest of us, is cheating and must be eliminated in the interest of fairness.
In light of the trepidation from some lawmakers, how can we ensure that the current provisions in the Stock Act are sufficient enough to address the question of abuse or potential abuse? According to Steve Kroft of CBS 60 Minute: Political intelligence employs former Congressmen and staffers to scour the halls of the Capital gathering valuable non-public information then selling it to hedge funds and traders on Wall Street who can trade on it long before it’s public.” If this assertion is true, how can we expect lawmakers who had benefitted financially and tremendously from the past slackness, to give up their bread and butter? Is it any reason, why congress is considered a millionaire’s club? If the public expect to wrestle from the rich, their source of largesse’s, they must be ready for a huge fight, for the rich hardly give up easily.
Congressmen have in the past looked at the slackness as a source of wealth generation after sojourning in congress? The public may be oblivious to this fact, some congressmen will continue to advocate for the indefensible, prophesying that CBS investigative reporting has some rather inexplicable shortcoming. Change is not something many people readily agree to; and more so, when it comes to millions or billions of largesse that are considered fringe benefits of having served in congress. Many of those retired lawmakers will hardly go down without a fight. Political intelligence has been their bread and butter or graft, if you like. The question, Why are some lawmakers still advocating the indefensible in light of current information regarding political intelligence? The retroactive answer to this question is: Money! Money!! And Money!!! Those purists, who are currently advocating that any congressman who has traded stocks with inside information should resign, probably are not going to get what they want.
Using insider information to benefit lawmaker’s bottom-line is akin to cheating; and, ignoring public concerns regarding such actions from congressional lawmakers is tantamount to flagrant abuse of power. Current provisions in the 2011 Stock Act or the re-figured 2006 Stock Act may not completely contain those provisions that will completely avert abuse. Bills working their way through congress can still be added to or amended to address concerns from the public. Like the saying goes, it is easier to spout platitudes than to address fundamentals.
For provisions in the re-figured 2006 Stock Act to suffice and reflective, it must answer the basic questions: Who? When? What? Where? and, How? As long as the provisions answer these basic questions, we may be rest assured that the issue of fairness may be addressed. Further, as long as congressional lawmakers understand why it is possible to adversely exploit political intelligence to one financial benefit; and, why the public is concerned that the ‘first to know’ doctrine regarding the developing and passing of a bill may give lawmakers a competitive or undue advantage over others in the market place, then we are half way through the journey.
It is imperative that congress abide by all laws that are imposed on other Americans. Further, it is also essential that lawmakers are not perceived as having an undue advantage over other Americans. Just as we are considering the issue of political intelligence, how about looking at other issues as congressional retirement fund and participation of lawmakers in the same health care system enacted for all Americans? Is it possible to move the Congressional Retirement Fund into the Social Security System? Is it feasible for all congressional lawmakers to participate in the mandated purchase of health care insurance as contained in PPACA? That way, all Americans are called to participate in the same Social Security Retirement System and patients Protection and Affordable Care Act? Finally, how about having an independent salary commission consider congressional salaries, rather than having congressmen consider pay increases. Many cities have a commission like this and it works fairly well for everyone, why not for the esteemed United State Congress? For congress to stand clear and clean there must never be a suspicion of having an undue advantage over other Americans, with respect to laws of the country.