DESPITE ITS GOOD intentions, the Stop Trading on Congressional Knowledge (Stock) Act has become the latest case study in petty partisan politics and legislative incompetence.
As its name implies, the act was conceived with the legitimate aim of preventing insider trading in Congress. Four months after it was signed into law, however, it’s clear that a portion of the act would do far more than that, potentially jeopardizing national security along with the personal safety of more than 28,000 executive-branch employees.
The story goes something like this: In his Jan. 24 State of the Union address, President Obama rightly called for members of Congress to increase their own financial transparency. But when the Stock Act was drafted in the months that followed, a few disgruntled lawmakers insisted that executive-branch employees be made to do the same. That argument led to the inclusion of the act’s haphazard and misguided Section 11 — originally proposed as an amendment by Sen. Richard C. Shelby (R-Ala.) — which forces executive-branch employees to disclose their financial holdings “on the official websites” of their respective agencies “not later than 30 days after such forms are filed.” In layman’s terms, that means that these officials’ detailed financial information would be instantly available at the click of a mouse — including to those who may wish to steal their identities, harm their families or interfere with the work they do for the government.
In a July 19 letter, 14 former high-ranking government officials wrote to members of Congress to complain, highlighting the serious security risks involved. In his confirmation hearing last week, Walter Schaub — the president’s pick to lead the Office of Government Ethics — agreed. On Thursday, the American Civil Liberties Union filed a lawsuit on behalf of four federal employment organizations, and Congress passed a bill that will delay the implementation of Section 11 for 30 days. That was a good place to start, but it’s only the first step toward the careful reconsideration that this component of the Stock Act ultimately needs.
Congress should use those extra 30 days to determine if there’s a legitimate interest in requiring thousands of employees to disclose online assets that would include real estate investments and retirement funds. As members of the executive branch, the employees are already subject to adequate conflict-of-interest requirements, and their information is already accessible through a process that maintains their safety and security of their unique positions.
Furthermore, the Privacy Act — which doesn’t apply to Congress — protects federal agencies, and if lawmakers decide to keep some version of Section 11 intact, they must find a way to require disclosure without compromising the protection that online disclosure would deny these officials. If they don’t, there’s a major disincentive for a pool of talented, un-elected employees to continue working for the government. National security concerns aside, that’s a risk lawmakers shouldn’t be willing to take.