The STOCK Act was drafted after 60 Minutes revealed that Senator Spencer Bachus bought stock options to benefit from Wall Street's coming collapse on the basis of a secret briefing. (Reuters/Gary Cameron.)
A busy day in Washington, in which the Senate began debate on a gun control package and Republicans in the House unanimously voted down the Paycheck Fairness Act, was ending sleepily late Thursday afternoon.
At 5:30 p.m., Representative Steve King was in a nearly empty House chamber, delivering a dreary stem-winder slamming the yet-to-be-announced immigration bill. Towards the end of his speech, King was interrupted so the House could receive a report from the Senate, declaring that it had just passed a bill the lower chamber needed to consider. After the House secretary read the announcement, King seemed confused.
“I had to pause for a minute there, I was concerned that might be the amnesty act coming over from the United States Senate. But I’m relieved to know it might be a few more days,” he said, before resuming his reading of a 1986 op-ed from then-Attorney General Edwin Meese.
No, the Senate had not somehow announced, passed through committee, and voted to approve a comprehensive immigration package without King noticing. Instead, it had passed a bill almost completely gutting the STOCK Act—one of the only recent efforts by Congress to police its own ethics and transparency problems, and one that passed with much self-congratulation a year ago. The House approved this “fix” on Friday.
The STOCK Act’s essential purpose was to stop insider trading in government: to prevent members of Congress and the executive branch, and their staffers, from using exclusive information gained through their jobs to profit financially.
The bill was rushed into law after an explosive 60 Minutes report detailed how, among other instances of improper dealing, Representative Spencer Bachus bought stock options that would yield high returns if the stock market tanked—immediately after a confidential briefing from Treasury Department officials that Wall Street was on the brink of collapse.
Before the STOCK Act even passed, House Majority Leader Eric Cantor stripped key language that would outlaw “political intelligence” operations—companies that work to obtain nonpublic information from Congress or the executive branch and then provided it to Wall Street traders. (The foolishness of these changes was underscored just this month, when one such company, Height Securities, appeared to obtain advance notice of a Medicare Advantage rate change that would benefit insurers. Health insurance stocks soared on April 1, even though the rate change wasn’t announced until April 3.)
But what remained in the bill was still good. It made it illegal it for members of the Congress and executive branch to personally profit off confidential work information, and created extensive online reporting requirements for a wide swath of important government officials: members of Congress, their staffers, Congressional candidates, the president, vice-president, and cabinet officials along with senior executive branch employees.