Despite those concerns, lawmakers agreed the best step was to approve this version and head to a House-Senate conference to hash out the differences between the two bills.
After the vote, House Speaker John A. Boehner (R-Ohio) hailed what he called the “strengthened” House bill and House Majority Leader Eric Cantor (R-Va.) said the sweeping vote should put pressure on the Senate - which passed its version 96 to 3 - to just approve the House version.
“We’ve got some work to do to restore the bond” of voters, Cantor said.
The legislation unveiled by formally bans lawmakers and staff members from making financial trades based on non-public information they receive in their positions.
Rather than holding an open, freewheeling debate, as the Senate did last week, House Republicans put the ethics legislation on a fast-track schedule that forbids amendments and requires a two-thirds majority for passage.
Despite those restrictions, Republican and Democratic leaders pledged their support for their version of the Stop Trading on Congressional Knowledge Act, or Stock Act.
Cantor nixed a provision that would have required a burgeoning K Street industry of consultants who glean inside information about legislative proposals, then alert their clients — hedge funds and other investment houses — about the likely outcome so they can buy or sell their stakes in advance. Unlike federally registered lobbyists, who disclose their actions and sources of income, the political intelligence industry has operated below the radar.
“It’s astonishing and extremely disappointing that the House would fulfill Wall Street’s wishes by killing this provision,” said Sen. Charles E. Grassley (R-Iowa), sponsor of the Senate-approved amendment. “The Senate clearly voted to try to shed light on an industry that’s behind the scenes.”
Instead, the House version would mandate a federal study of the industry — which has annual revenue of $100 million to $400 million — so recommendations can be made for legislative action next year.
Cantor dismissed questions about the dropping of the political intelligence disclosure provision as something “outside of what we do” and that it was not part of what the original legislation was intended to do.
He also raised the specter that the language Grassley used to draft the disclosure was so broad it might lead to constituent groups meeting with lawmakers having to file forms based on their questions related to pending legislation.
“What is the consequence of that provision,” Cantor said, suggesting his proposed study of the industry was preferable.
In addition, the Cantor draft dropped a bipartisan provision that the Senate approved on a unanimous voice vote that would have restored some elements of federal corruption law that the Supreme Court unanimously rejected last year. This “honest services” provision served as the basis for the prosecution of lawmakers, lobbyists and former congressional staffers in connection with the investigation of lobbyist Jack Abramoff, as well as the prison sentences issued to Enron executives, but it was declared overly broad by the court.