Last week, Congress passed a much-weakened version of the STOCK Act banning insider trading by its members and their staffers. The law was significantly weakened by failing to place curbs on “political intelligence,” as well as failing to provide new clean-government rules for oversight of the financial dealings of Congressional members.
The legislation makes clear that lawmakers and key staffers are bound by the insider trading laws, but members of Congress are already bound by the laws of the United States so it is unclear what the purpose of this legislation is—except perhaps to promulgate convoluted language so they may continue to practice questionable financial dealings without much oversight. For example, the House version of the bill bars lawmakers from participating in IPOs, but whether this provision will remain in the conference version of the bill, which is reconciled between the Senate and House, remains to be seen.
Further proof that the law is anemic and intended to protect corruption in Congress can be found in two provisions that were cut at the last minute. One provision found in the Senate version requiring members and staffers who collect and trade so-called political intelligence—information from government that can move markets and stock prices—to register just like lobbyists was eliminated by House Republicans. Their version of the bill also cut a provision that cracks down on officials who are guilty of taking actions on the job to benefit themselves financially.
The STOCK Act represents an attempt by House Republicans to take the teeth out of the Senate version of the bill, and thereby preserve the political and financial corruption that have become hallmarks of Congress. The revisions even led Republican sponsors of the Senate version to criticize members of their own party. Sen. Chuck Grassley (R-Iowa) called the changes “astonishing and extremely disappointing.”