By SUZANNE DERSHOWITZ
POGO just returned from the White House signing ceremony for the Stop Trading on Congressional Knowledge Act, or STOCK Act--an important ethics and anti-corruption bill. The STOCK Act clearly prohibits Members of Congress, their staff, and executive branch employees from using nonpublic information for insider trading.
The new law requires Members of Congress and government officials to publicly report any transactions exceeding $1,000 in stocks and bonds within 45 days after a trade. It also requires officials’ public financial disclosure reports be made available online on agency websites and ultimately through searchable, sortable databases. This is an important step forward—previously, paper copies were only made available upon request.
We are also pleased the new law requires the strong executive branch coverage we advocated for. POGO hopes the law will be implemented as soon as possible, and we will be keeping a watchful eye out for online posting of officials’ public financial reports at the U.S. Office of Government Ethics (OGE) website. The bill includes a few other new good measures, such as expanding pension forfeiture for corrupt Members, requiring Members and high level officials to disclose the terms of personal mortgages, and limiting Members and senior employees from participation in initial public offerings (IPOs).
While the STOCK Act is a great start, we are disappointed that several key provisions got cut along the way. POGO called for an open, transparent House-Senate conference to ensure the strongest bill would go to the President, and we were deeply disappointed that Senate Majority Leader Harry Reid (D-NV) moved to force a vote on the House version without convening a conference committee.
An amendment by Senator Charles Grassley (R-IA) in the original Senate version of the bill would have required political intelligence consultants to register and report their activities, disclosing who their clients are and on which specific issues they are employed to gather information. Given the minimal reporting of communications of influence between this multi-million dollar industry and government, POGO hoped this provision would have been included in the law (POGO exposed a particularly egregious example of this late last year). Grassley was one of the three “no” votes on the watered-down bill.
Public corruption prosecution improvements were also scrapped from the final version of the bill that made it to the President’s desk. The critically needed “honest services” and “illegal gratuities” provisions in the original Senate bill would have clarified crimes of illegal gratuities, bribery, and graft—categories of deceptive conduct eroded in the Supreme Court’s ruling in Skilling v. United States.
We hope the congressional momentum for greater accountability in government will endure. Signing the STOCK Act is a good beginning, but more work needs to be done. POGO urges Congress to pass the much-needed reform provisions that were slashed during the process, either as standalone legislation or amendments to the bill the President signed into law today.
Suzanne Dershowitz is POGO's public policy fellow.