Do members of Congress get a pass on insider trading?
The Senate Homeland Security and Governmental Affairs Committee will seek to answer that question next week as it holds the first-ever hearing examining how laws on insider trading apply to members of Congress.
News of the hearing, which was announced by Sen. Joe Lieberman (I-Conn.) and Susan Collins (R-Maine) Wednesday afternoon, comes days after CBS’s “60 Minutes” ran a report detailing the ways in which lawmakers may profit from nonpublic information. Sen. Scott Brown (R-Mass.) earlier this week requested that the panel examine the issue.
“Insider trading by members of Congress — if it occurs — is a serious breach of the public trust,” Lieberman said in a statement. “No one in Congress should be enriching themselves based on information to which the general public has no access. Our hearing will set the record straight about how existing laws and ethics rules apply to Congress and whether they are sufficient to prevent unethical market trading.”
In the wake of the “60 Minutes” report, several lawmakers and outside groups have renewed their push to examine the issue, even as they have criticized the substance of the newsmagazine special, which focused largely on the activities of House Speaker John A. Boehner (R-Ohio) and Minority Leader Nancy Pelosi (D-Calif). Both lawmakers’ offices have assailed the report’s content.
In a statement Wednesday, the watchdog group Citizens for Responsibility and Ethics in Washington blasted the content of the “60 Minutes” special, arguing that it “did a disservice” to Pelosi and Boehner and “undermined the case” for the Stop Trading on Congressional Knowledge Act, which was introduced in 2006.
The measure would broaden the definition of insider trading to include information on legislative actions that is available only to members of Congress and their staffers. It also would set out rules and reporting requirements for members and would require “political intelligence consultants” who seek market information on proposed rules and regulations to register as lobbyists.
Lawmakers in both chambers have made efforts to re-introduce the long-languishing measure in recent days. Brown and Sens. Kirsten Gillibrand (D-N.Y.), Jon Tester (D-Mont.) and Debbie Stabenow (D-Mich.) — all of whom are up for re-election in 2012 — this week introduced versions of the STOCK Act in the Senate.
And in the House, Reps. Louise Slaughter (D-N.Y.) and Tim Walz (D-Minn.), who had already re-introduced the measure in March, issued a statement urging the bill to be taken up.
Rep. Spencer Bachus (R-Ala.), one of the lawmakers whose alleged insider trading was targeted by the “60 Minutes” special, fired back Wednesday with a letter to the publisher of the book on which the newsmagazine’s special was based.
In a back-and-forth with reporters at the Capitol during votes Wednesday evening, Bachus said that the allegations made by book author Peter Schweizer were false.
“Did I profit more (than the average citizen)?” Bachus asked. “No. I mean, I profit because of my knowledge of the market. I profit because I study it every day.”
Asked whether he believed the book and the “60 Minutes” report were a “hit job,” Bachus responded, “Yeah — what they did was they put the GE logo up and said that I was shorting the financial market.”
“I do blame (Schweizer) for lies in the book,” he added. “I blame him for confusing buying a company for selling a company. I (blame) him for telling me that Apple Computer, somehow, there’s something wrong with that.”