A Senate panel approved a proposal to place restrictions on insider stock trading by members of Congress, as lawmakers seek to restore eroding public trust in Washington.
The Senate Homeland Security Committee, on a 7-2 vote, today approved a measure that would explicitly ban lawmakers and their aides from using nonpublic information they receive as part of their legislative and oversight duties for personal gain. The legislation also would make clear that existing securities laws prohibiting insider trading apply to Congress.
“Elective office is a place for public service, not private gain,” said Senator Susan Collins of Maine, the committee’s top Republican.
Enacting such legislation, which Congress has considered before, took on added urgency after the CBS News program “60 Minutes” reported last month that members of Congress bought stock in companies during debates on legislation that might affect the businesses. None of the questioned investments was illegal, the report said.
The Senate measure combines bipartisan proposals offered by Senator Kirsten Gillibrand, a New York Democrat, and Senator Scott Brown, a Massachusetts Republican. It directs ethics committees in the House and Senate to issue rules on insider trading and requires lawmakers to disclose their stock, commodities futures, bond and other transactions within 30 days.
“This is something that is critically needed to ensure there is a public trust that is reestablished,” Brown said.
The bill requires the Government Accountability Office to study the role of so-called political intelligence firms, which use their contacts in Washington to provide financial institutions with market-related information.
In the House, similar legislation is gaining bipartisan support, growing from nine cosponsors before the CBS report to more than 230 backers.
Representative Louise Slaughter, a New York Democrat who has pushed for the insider-trading legislation since 2006, said the Senate bill needs to be tougher on political intelligence firms.
Legislation she supports would require those firms or individuals involved in political intelligence to register in the same way as federal lobbyists and bar them from selling nonpublic information obtained from federal employees.
“We don’t need a study to understand this industry,” she said in a statement yesterday. “We need transparency and regulation so that the public, members, staff, and regulators know who is speaking to Congress to gain an advantage on the financial markets.”
Lieberman said the issue is complex and he plans a hearing on it when Congress returns next year.
Senator Tom Coburn, an Oklahoma Republican, said the panel was moving too fast on the legislation.
“We have laws,” Coburn said. “This isn’t a big problem with the vast majority of members of Congress.”
“Our constant response in Washington is, ‘pass another law,’” he said, and rushing to judgment further undermines public confidence.