So on April 11th, Congress passed a bill into law in record time. I'm talking about Bill Number S. 716. What's S. 716? It's a Bill to modify the requirements under the Stop Trading on Congressional Knowledge Act (STOCK Act) regarding online access and electronic filing of financial disclosure statements and related forms. Remember that? Congress received some bad press on 60 Minutes about all of the insider trading and conflicts of interests perpetrated by our trusted government so they passed a law to do something about it.
The STOCK Act
About a year ago a big to do was made about the signing of the STOCK Act. This actually was a big step toward improving government transparency. The intent was to prevent insider trading and make financial transactions more transparent for members of Congress, their staff, and executive employees. As quoted from our commander in chief, “Send me a bill that bans insider trading by members of Congress; I will sign it tomorrow.” -- President Obama, State of the Union, January 24, 2012. And he was true to his word and he signed the bill into law.
Here are some of the highlights of the STOCK Act:
- Increases Transparency in Financial Disclosure Reporting through Trade Reporting (requires electronic filing of investment transactions within 45 days of the trade) and Online Availability (public financial disclosure reports must be made available through searchable, downloadable online databases)
- Expands Pension Forfeiture for Corrupt Members: basically expands forfeiture of federal pensions to include Insider Trading for Member of Congress
The Trade Reporting and Online Availability components of the bill were of the most substance. These would allow watchdog groups and even people like you and me, to go to an online database, download financial disclosures and see if insider trading or conflicts of interest were happening such as using knowledge gained from their positions to make well time stock trades.
Fast forward a year to S. 716
On Thursday, April 11, 2013, Senator Harry Reid, a Democrat, introduced and passed S. 716. The very next day, House Majority Leader Eric Cantor, a Republican, introduced and passed S. 716. This bill was passed in the Senate and House with no debate and no recorded vote using Unanimous Consent. The House vote took place at 12:52 and lasted all of 31 seconds.
No committee hearings, no filibusters, no floor debates.
Then on Monday, April 15, 2013, president Obama signed S. 716 into law.
So how did the STOCK Act change?
- S. 716 modified financial reporting requirement to make congressional staff and most executive branch employees exempt (The President, Vice President, members of Congress, candidates for Congress, and officers of the executive branch that need to be confirmed by the Senate will still need to comply)
- S. 716 eliminated the online searchable database and it makes posting financial information online optional
- S.716 eliminated a sentence from the STOCK Act that said, "no login shall be required to search or sort data contained in the reports made available"
Now instead of having the ability to search an online database and download financial disclosures from anywhere, you have to go to the Cannon House Office Building in Washington DC and enter your name and address into their computer before you review the records. To make matters worse this database is not searchable. You need to look at the records one by one.
That's not true disclosure and does little to improve transparency. But congratulations congress, you did prove you can work together to pass a bill in record time when it's to your benefit.