Monday, July 23, 2012
(graphic-Affordable Housing Institute)
The office of House Majority Leader Eric Cantor (R-Virginia) gutted a much-publicized ethics law earlier this year by creating a huge loophole for family members, although the Congressman insists the change was inadvertent and promises to fix it. Passed in April, the Stop Trading on Congressional Knowledge (STOCK) Act strengthened the already existing prohibition on members and employees of Congress using “any nonpublic information derived from the individual’s position… or gained from performance of the individual’s duties, for personal benefit.” The bill also applies to all employees in the Executive and Judicial branches of the federal government.
The STOCK Act’s primary reform is to require every member of Congress to publicly file and disclose any financial transaction worth $1,000 or more of stocks, bond, commodities futures, and other securities within 45 days on their Web sites, rather than only once a year as they do now. Such timely and frequent disclosure is intended to help citizens and law enforcers alike in evaluating the ethics of members’ financial transactions.
As originally introduced and passed in the Senate, the STOCK Act imposed the same 45-day filing requirement on the family relations of Congress members, but when Cantor’s office drafted the House version, they moved this language to a different section of the bill, meaning that spouses and dependent children aren’t subject to the new reporting requirements. Unaware of the change, STOCK Act co-sponsor Senator Scott Brown (R-Massachusetts) said he was “obviously very concerned,” and sent a letter to Cantor and House Speaker John Boehner (R-Ohio), demanding a fix to the problem.
In the meantime, the Senate Ethics Committee has decided to interpret the Act according to its original spirit, and has advised Senators that their spouses and dependent children all have to file the 45-day reports. The House Ethics Committee, however, interprets the Act according to its letter, and is not requiring the reports.
The Office of Government Ethics, which oversees all federal executive branch employees, has agreed with the House, informing its employees that their spouses and children need not file the reports.
-Matt Bewig
To Learn More:
Congressional insider trading ban might not apply to families (by Deirdre Walsh and Dana Bash, CNN)
130 Members of Congress Bought Stocks in Companies that Lobbied their Committees (by Noel Brinkerhoff and David Wallechinsky, AllGov)
House of Representatives Waters Down Insider Trading Bill to Protect “Consultants” (by Noel Brinkerhoff, AllGov)
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