U.S. Senate: CLC Calls for Ban on Congressional Insider Trading as STOCK Act Moves Forward

Today, the Campaign Legal Center, and a coalition of reform groups, renewed its call for a ban congressional insider trading and urged the Senate Homeland Security & Governmental Affairs Committee to quickly move legislation forward to the full Senate.  The Committee is scheduled to hold a hearing this afternoon on the topic and a letter from the groups in support of the legislation to curb the practice was entered into the committee record.

Efforts to ban insider trading by Members have taken on new life since a scathing report on the practice was aired on the CBS News Magazine 60 Minutes last month.  More than 100 additional co-sponsors have signed on to a House bill after the report aired, and related legislation was quickly introduced in the Senate.

“It is both encouraging and sad that this bill suddenly gained traction after a 60 Minutes report.  Prior to that, Members in both houses were more than willing to ignore the pleas of the original sponsors,” said Meredith McGehee, Campaign Legal Center Policy Director.  “It is unfortunate that such vehement public outrage is needed to spur congressional support for legislation, but that is regrettably how things work on Capitol Hill, particularly when Members are faced with making rules that deal with policing their own conduct.”

Sen. Kirsten Gillibrand (D-NY) and Sen. Scott Brown (R-MA), who introduced S. 1903 and S. 1871 respectively, each testified today regarding their new legislative efforts to apply the laws against insider trading to members and staff of Congress and provide a system of transparency for commodities and securities trading to help ensure that the law is monitored and enforced. Together, the bills have a combined 16 Senate co-sponsors.  In the House the STOCK Act (H.R. 1148) was introduced by Reps. Timothy Walz (D-MN) and Louise Slaughter (D-NY).

The organizations signing the letter include the Campaign Legal Center, Citizens for Responsibility and Ethics in Washington (CREW), Common Cause, Democracy 21, Public Citizen, Sunlight Foundation and U.S. PIRG.

The hearing is scheduled for 2:30 pm in Room 342 of the Dirksen Senate Office Building.

The full text of the letter follows below.

Dec. 1, 2011

The Hon. Joseph Lieberman, Chairman

The Hon. Susan Collins, Ranking Member

Committee on Homeland Security & Government Affairs

U.S. Senate, 340 Dirksen Senate Office Building

Washington, D.C. 20510

RE:     Support the “Stop Trading on Congressional Knowledge Act”

Dear Chairman and Ranking Member:

Our organizations – Campaign Legal Center, Common Cause, Democracy 21, Public Citizen, Sunlight Foundation and US PIRG – strongly support passage of the “Stop Trading on Congressional Knowledge Act” (STOCK Act) designed to prevent congressional insider trading, and encourage you to move the legislation for a full floor vote.

Sen. Kirsten Gillibrand (D-NY) introduced S. 1903 and Sen. Scott Brown (R-Mass.) introduced S. 1871 in an effort to apply the laws against insider trading to members and staff of Congress and provide a system of transparency for commodities and securities trading to help ensure that the law is monitored and enforced. Together, the bills have a combined 16 co-sponsors.

Under current law, “insider trading” is defined as the buying or selling of securities or commodities based on non-public information in violation of confidentiality – either to the issuing company or the source of information. Congressional officials and employees in the course of official business, it is often believed, do not owe a duty of confidentiality to these companies and thus are not liable for insider trading.

Legislation is needed to provide a clear and balanced application of the laws against insider trading to both the private and public sectors and offer the important tool of disclosure for ensuring compliance with the law.

We encourage all members of the Senate to join in a bipartisan effort to apply the insider trading laws uniformly across Congress before any new scandals may arise.

Sincerely,

Campaign Legal Center

Common Cause

Democracy 21

Public Citizen

Sunlight Foundation

US PIRG