The headlines are that the House approved the STOCK Act (The Stop Trading On Congressional Knowledge Act) … but was it the one authored by Tim Walz (D-MN-01) or by Eric Cantor (R-VA-07) ?
A little background … Speaker Boehner authored the Pillars of a New Majority which emphasized legislation that would be crafted in the appropriate committees, consideration of amendments, vigorous debate, committee approval, 72 hours time allowed for the full House to study the bill and eventually leading to the vote by the full House.
Speaker Boehner had a great plan, but Majority Leader Eric Cantor’s actions have resulted in those pillars crumbling (again).
The STOCK Act should have been a model to support those pillars.
Representative Walz’s bill was submitted March 17, 2011 … generated bi-partisan support but languished until a television program, 60 Minutes, did a story concerning Members of Congress who were legally enriching themselves by using nonpublic information gleaned from their official duties to make money in the financial markets. That motiviated the Financial Services Committee to hold a hearing on December 6 complete with witness testimony from Republican and Democrat Members … it looked like there would be a committee vote ….
Then Eric Cantor put the brakes on
Meanwhile, last week, the Senate passed its own version of the STOCK Act by a vote of 96-3.
The Majority Leader’s opposition left Representative Walz with little choice, so on February 1st, he authored a discharge petition requiring that his bill be brought forward … and as of Wednesday, February 8th, 171 Representatives had signed.
That’s where Walz’s STOCK Act (H.R. 1148) stands … no approval by the Financial Services Committee and no vote by the full House.
But, the headline said House Passes Stock Act … well it did … not Representative Walz’s but instead the House suspended the rules and approved the House Amendment to S 2038, Stop Trading on Congressional Knowledge Act of 2012 (STOCK Act).
Tuesday evening, House leadership held a meeting with a few Representatives to discuss their concerns about the STOCK Act. On Wednesday morning, House leadership incorporated a few suggestions into an amendment and on Thursday a Roll Call vote was held which passed 417-2.
No Committee hearings … no approval by the committee … no 72 hours to read the legislation … just a backroom deal managed by the Majority Leader.
There is some good in the proposal ..
The House bill accepted Senate language that would require lawmakers to disclose all their mortgages, ending an exemption for loans on personal residences.
And the House legislation vastly expands the list of felony convictions that would require lawmakers to be ineligible for their government pensions.
But there is some “areas of concern” …
Portions of the financial industry lobbied for removal of the proposal which would require so-called political intelligence firms to register the same as lobbyists, and they would have to file public reports on their spending and contacts with federal officials. [Note : Diane Cantor, the wife of Majority Leader Cantor, works at an investment firm called Alternative Investment Management and previously worked as a managing director to New York Private Bank & Trust, while Majority Leader Cantor’s 2009 financial disclosure form indicated that he owned up to a $500,000 share of a mortgage company called TrustMor run by his brother.)
So, what’s “political intelligence” ?
Well, according to The Wall Street Journal, the political intelligence industry employs about 2,000 people in D.C. and generates about $100 million in annual revenue. Hedge funds and mutual funds (and, to a lesser extent, other Wall Street investors) hire “expert network” companies like Gerson Lehrman, Coleman Research Group, Inc., and Public Insight LP to tell them the latest on what Washington will or won’t do, and when. The Journal piece profiled Paul Equale, a 60 year-old former lobbyist and onetime Energy department official who does some consulting for Gerson Lehrman, the biggest expert-network firm. Mr. Equale bills Gerson $600 an hour for passing along inside information about what the government is up to. “It’s put my kids through college,” he told the Journal.
Majority Leader Cantor is concerned about the “political intelligence” industry and in writing the House bill, excluded the Senate language fearing that the new rules would have “raised far more questions than they would have answered.”
Majority Leader Cantor received some harsh criticism from a Republican, Senator Charles Grassley of Iowa, whose amendment to regulate these firms won by 60-39.
“It’s astonishing and extremely disappointing that the House would fulfill Wall Street’s wishes by killing this provision,” Grassley said. “The Senate clearly voted to try to shed light on an industry that’s behind the scenes.”
“If the Senate language is too broad, as opponents say, why not propose a solution instead of scrapping the provision altogether,” he said. “I hope to see a vehicle for meaningful transparency through a House-Senate conference or other means. If Congress delays action, the political intelligence industry will stay in the shadows, just the way Wall Street likes it.”
So instead of considering Representative Walz’s bill, Majority Leader Cantor pushed his own weaker bill that will now have to be resolved in a House-Senate Conference Committee. “I’m disappointed the political intelligence piece isn’t in here” said Representative Walz.
Said to say, but just another example of a Republican-controlled House that has lost all “political intelligence” even when good and reasonable ideas are brought forward by a bi-partisan group of Representatives.
BTW … just this week, it was announced that two members, Spencer Bachus (R-AL-06) who was featured on the 60 Minutes program, and Vern Buchanan (R-FL-13), are under ethics review involving financial matters (a “review” does not mean any wrongdoing … just a review to ensure that no unethical activities occurred).
THANKS to Congressman Walz for your efforts … but this example proves that the Pillars of a New Majority are designed to support Wall Street and not the American people.