Taking the approach that no good deed or idea should go unpunished, Congress has stripped down an already stripped-down law aimed at limiting those with political clout from enriching themselves through insider trading.
Last year, Minnesota Congressman Tim Walz resurrected long-languishing legislation that would bar members of Congress, Capitol Hill staff and senior executive branch advisers from using insider information when they trade stock or securities.
The Stop Trading on Congressional Knowledge or STOCK Act, passed with bipartisan support, but only after being stripped down. The law does not, as Walz’s proposal included, regulate consultants seeking to glean information from White House or Capitol Hill staff members about legislative proposals to help their clients -- typically hedge funds or Wall Street traders -- make shrewd moves before decisions on votes that could influence markets.
The law did, however, have an important requirement that public financial disclosures of members of Congress and senior legislative and congressional officials be put online in a searchable format.
Some critics argued that requiring online financial disclosures of some senior government officials who hold sensitive jobs could put them and the nation’s security at risk.
But rather than craft narrow exemptions that would protect those in sensitive government jobs, Congress passed a sweeping change that would exclude legislative and executive staffers from the online disclosure requirements.
The changes got even worse as the legislation still requires financial disclosure from the president, members of Congress and congressional candidates but removes the requirement that the online information be searchable, sortable and downloadable.
With the changes, Congress has essentially made the STOCK Act unworkable. It exempts large numbers of government employees from financial disclosures and needlessly obscures the public financial disclosures that are still required. In short, if you have the ability and desire to search through paper trails you can find the disclosures, but you can’t easily do it online.
It’s a classic case of pretending to do something good but writing the law so that the process will invariably fail.
If President Obama, who supported the initial STOCK Act, truly believes in transparency, he should veto this legislation and have Congress write legislation that maintains easy online searching while protecting those few officials in sensitive jobs who could be harmed.