Federal legislation to ban insider trading by members of Congress passed in
the House of Representatives on Thursday morning, but some lawmakers
complained the House version of the bill had been weakened.
The STOCK (Stop Trading on Congressional Knowledge) Act was co-sponsored
by U.S. Rep. Jaime Herrera Beutler, R-Wash. Following the 417-2 vote on
Thursday, Herrera Beutler said in a news release that she was proud to vote
yes on the legislation.
"Just five months ago, folks were skeptical that the STOCK Act would ever
see the light of day," she said. "Hardworking taxpayers deserve to know that
their federal representatives live under the same laws that they do, and that
the public good will always come before personal gain."
The STOCK Act passed the Senate last week. The Senate and House bills
have some differences, and the two chambers will need to come to an agreement
on the legislation.
Under the House version, members of Congress and congressional and
executive staff members would be prohibited from buying or selling securities, swaps or commodity futures based on nonpublic
information they obtain through their jobs; prohibited from sharing nonpublic
information about legislative actions for purposes of investing or profiting
from investments; and be required to report within 45 days any investment
transactions valued in excess of $1,000.
The bill also would prevent members of Congress who have been convicted
of a crime from receiving taxpayer-funded pensions.
The Senate version of the bill would require so-called political
intelligence firms to register the same as lobbyists, and they would have to
file public reports on their spending and contacts with federal officials.
Portions of the financial industry lobbied for removal of the proposal.
"The Republican leadership couldn't stomach the pressure," said Rep.
Louise Slaughter, D-N.Y., who has been trying to get an insider trading bill
passed for six years. She said the bill "let the political intelligence
community off the hook."
Majority Leader Eric Cantor, R-Va., who wrote the House bill, countered
that a study of this growing but little-known industry made more sense. He
said inclusion of the new rules at this point would have "raised far more
questions than they would have answered."
Democrats released a statement on Thursday afternoon criticizing Herrera
Beutler for not fighting to preserve the language that Cantor stripped from
the bill.
"Herrera Beutler let special interests win and failed to fight her
Republican leaders when they watered down common-sense ethical reforms to ban
insider trading and crack down on public corruption," Jesse Ferguson of the
Democratic Congressional Campaign Committee said.
But Herrera Beutler's spokesman, Casey Bowman, said the first-term
congresswoman would have liked the House version to include the original
provisions, noting that she did co-sponsor the original bill with the stricter
language. Bowman also said Herrera Beutler had no say in how the legislation
was revised -- only the choice to vote for or against the act.
Herrera Beutler's predecessor, Democrat Brian Baird, co-sponsored a
version of the legislation in 2006. The current version of the STOCK Act was
introduced March 17 of last year by Rep. Timothy Walz, D-Minn., referred to a
series of House committees, and reintroduced June 1.
The legislation was prompted in part by the insider trading scandal
involving former House Majority Leader Tom DeLay and lobbyist Jack Abramoff in
1999 and 2000.
In researching the issue at the time, Baird learned that political
intelligence firms marketing insider knowledge had operated in the nation's
capital since the 1970s but remained relatively unknown because they were not
required to register their clients or report their earnings.
The measure drew only a handful of sponsors and had one sparsely attended
hearing in 2006. But the movement to ban insider trading by Congress gained
traction after Baird was featured on CBS TV's "60 Minutes" last November.
Herrera Beutler signed onto the legislation two days after the show aired.
The only representatives voting on Thursday against the act were John
Campbell, R-Calif., and Rob Woodall, R-Ga.
The Associated Press contributed to this report.
