What happens when public confidence in Congress hits an all-time low as elections loom? Something good, at least this time.
On Wednesday, President Barack Obama put his signature to the Stop Trading on Congressional Knowledge Act of 2012. Known as the STOCK Act, this legislation spent six years going nowhere-until it passed the House of Representatives on a 417-2 vote and was adopted by the Senate by unanimous consent.
A confluence of public distrust of Congress, media scrutiny of questionable stock trading practices on Capitol Hill and the persistence of a few lawmakers-among them Rep. Louise Slaughter, D-Fairport, who first introduced the measure-brought this bill to the president’s desk. Thus, what seemed improbable only a few months ago became a slam dunk.
The STOCK Act both tightens rules and increases transparency regarding investment transactions by elected officials and others in government. The law contains several key provisions:
- One declares-for the first time-that congressional lawmakers and their employees are not exempt from federal insider trading laws. This extends to the president, vice president, thousands of executive branch employees and the judiciary as well.
- Another requires lawmakers and others covered under the law to file frequent reports of new investment transactions exceeding $1,000; currently, these are filed just once a year.
- All financial disclosure reports will be posted online-which the House currently does but the Senate does not. Again, this would extend to executive branch officers and employees.
- The law also bars covered individuals from taking part in initial public stock offerings if they are not available to the public.
In the final push for passage, regulation of so-called "political intelligence" firms was proposed, then dropped. While a few critics think this is a major failing of the final version, this matter deserves more study and can be dealt with in a separate measure. In fact, Rep. Slaughter introduced such a bill in February.
It’s easy to be skeptical about any legislation that passes Congress these days. But the STOCK Act is worthy of the overwhelming support it finally received.
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