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Friday, February 10, 2012

House OKs insider trading ban; faces differences with Senate





Jonathan Ernst / Reuters
Sen. Charles Grassley, seen here in a file photo, said Wednesday it was "astonishing and extremely disappointing that the House would fulfill Wall Street's wishes ..."
The House on Thursday passed its version of a bill already approved by the Senate to make clear that members of Congress and congressional employees are not exempt from insider trading prohibitions under securities laws.
House and Senate leaders are likely to appoint members to a conference committee during the next few days to reconcile the differences between the two bills.
Using an expedited procedure requiring a two-thirds vote and allowing no amendments, the House voted 417 to 2 to pass the bill which was drafted by House GOP leaders.
The bill resembles the one passed by the Senate last Thursday but differs in a few ways.

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One is that the House bill would require public disclosure of stock transactions by fewer executive branch officials – about 28,000 – than the Senate bill, which would require public disclosure by 360,000 executive branch officials.
More controversially, the House bill omits the Senate bill’s requirement that “political intelligence professionals” register, just as lobbyists are required to do.
The political intelligence amendment, sponsored in the Senate by Sen. Chuck Grassley, R- Iowa, exempts the news media, but applies to information gathering “intended for use in analyzing securities or commodities markets, or in informing investment decisions,” and done on behalf of clients who want to keep track of pending legislation or federal agencies’ rule-making.
Rep. Louise Slaughter, D- N.Y., who has been advocating her own congressional insider trading ban for years, told the House Thursday that House GOP leaders had succumbed to pressure from lobbyists and information gatherers on K Street, center of Washington’s lobbying industry, to remove the Grassley amendment from the bill.
“It appears that the Republican leadership couldn’t stomach the pressure from the political intelligence community,” she said on the House floor.
She said the political intelligence industry “is worth $400 million a year. It is unregulated, unseen, and operates in the dark.”
Grassley said in a statement Wednesday that it was “astonishing and extremely disappointing that the House would fulfill Wall Street’s wishes by killing this provision. The Senate clearly voted to try to shed light on an industry that’s behind the scenes. If the Senate language is too broad, as opponents say, why not propose a solution instead of scrapping the provision altogether?”
But House Majority Leader Eric Cantor indicated that the Grassley amendment was one of the parts of the Senate bill that “would have made the bill unworkable or raised far more questions than they would have answered.”

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And Senate Governmental Affairs Committee chairman, Sen. Joe Lieberman of Connecticut, who shepherded the bill to passage in the Senate, also opposes Grassley’s amendment, saying last Thursday that registration of political intelligence gatherers might run afoul of the First Amendment. "We're going to have to try to fix it in conference," he told reporters.
Lieberman prefers to ask the Government Accountability Office to do a study of the activities of political intelligence gatherers before Congress moves ahead on any regulation of them.
In his State of the Union speech on Jan. 24, President Obama said, “Send me a bill that bans insider trading by members of Congress; I will sign it tomorrow.”
The rapid pace of enactment of the bill was spurred by a CBS “60 Minutes” report last year and a book by Peter Schweizer, a fellow at the conservative Hoover Institution, on alleged insider trading by members of Congress.

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