(Watered Down) Ethics Reform Bill to Ban Insider Trading by Congress Members, Executive Branch Passed by House
The House on Thursday overwhelmingly approved its scaled-back version of an ethics reform package that would prohibit insider trading on Capitol Hill and in the executive branch.
On a 417 to 2 vote, the legislation won approval despite complaints from senators and House Democrats that GOP leaders stripped the measure of several key reforms that the Senate had easily approved.
Despite those concerns, lawmakers agreed the best step was to approve this version and head to a House-Senate conference to hash out the differences between the two bills.
After the vote, House Speaker John A. Boehner (R-Ohio) hailed what he called the “strengthened” House bill and House Majority Leader Eric Cantor (R-Va.) said the sweeping vote should put pressure on the Senate - which passed its version 96 to 3 - to just approve the House version.
“We’ve got some work to do to restore the bond” of voters, Cantor said.
The legislation unveiled by formally bans lawmakers and staff members from making financial trades based on non-public information they receive in their positions.
Rather than holding an open, freewheeling debate, as the Senate did last week, House Republicans put the ethics legislation on a fast-track schedule that forbids amendments and requires a two-thirds majority for passage.
Despite those restrictions, Republican and Democratic leaders pledged their support for their version of the Stop Trading on Congressional Knowledge Act, or Stock Act.
Cantor nixed a provision that would have required a burgeoning K Street industry of consultants who glean inside information about legislative proposals, then alert their clients — hedge funds and other investment houses — about the likely outcome so they can buy or sell their stakes in advance. Unlike federally registered lobbyists, who disclose their actions and sources of income, the political intelligence industry has operated below the radar.
“It’s astonishing and extremely disappointing that the House would fulfill Wall Street’s wishes by killing this provision,” said Sen. Charles E. Grassley (R-Iowa), sponsor of the Senate-approved amendment. “The Senate clearly voted to try to shed light on an industry that’s behind the scenes.”