House leaders Nancy Pelosi, John Boehner and Spencer Bachus announced their willingness to support a bill placing insider trader restriction on members of Congress after being accused of the practice on CBS’ “60 Minutes.”
Since the CBS show aired a segment last month investigating how congressmen and women benefit from purchase stocks and investments based on exclusive information discussed within the House walls, there has been a flurry of action surrounding a bill that would impose trading regulations on members of Congress.
Pelosi and others have flocked to the bill that retired Congressman Brian Baird described to “60 Minutes” reporter Steve Kroft as virtually impossible to get cosponsors – or even a listening audience – for.
Baird and Rep. Louise Slaughter (D-N.Y.) roused only six cosponsors when they first introduced the Stop Trading on Congressional Knowledge (STOCK) Act in 2004. Now the bill, sponsored by Rep. Timothy Walz (D-Minn.) has 141 Democratic and Republican cosponsors as of Friday afternoon.
Minority Leader Pelosi (D-Calif.) praised Thursday the STOCK Act saying to reporters the bill should “fly through Congress” because lawmakers “all disclose what we do.”
Rep. Bachus (R-Ala.) said his House Financial Services committee would hold a hearing on Dec. 6 about the STOCK Act. House Speaker Boehner supported the hearing Thursday as “a step in the right direction.”
The “60 Minutes” report provoked public attention when it called out three members of congress – Pelosi, Boehner, Bachus – for suspicious financial decisions.
In the broadcast,Throw Them All Out author Peter Schweizer called out Bachus for purchasing stock options related to secret information discussed in closed-door committee meeting about the global economy. He did not directly answer the charges.
Boehner was accused of buying health insurance stocks during the health care talks and Pelosi of purchasing IPO credit card stocks while the House was discussing legislation affecting the credit card industry.
Pelosi and Boehner were ambushed at press conferences to account for their actions. Boehner and his office said he has not been involved in day-to-day decisions on his stock account for years, and the decision of the health care stocks was made by his financial adviser.
Pelosi stumbled in explaining her purchase of $5,000 worth Visa IPO stocks. Soon after the credit card legislation died before making it to the House floor for a vote.
She clarified that the purchases did not affect her votes in Congress saying, “I would hold my record in terms of fighting credit card companies as a speaker of the house and a member of congress up against anyone’s.”
The credit card legislation, which would have a negative effect on the industry, did eventually pass. However, it passed two years later after being initiated by the Senate.
None of their actions were actually illegal. However, Baird and Schweizer, a research fellow at Stanford University think tank Hoover Institution, both believe benefiting from congressional information is unethical.
The STOCK ACT would make it illegal for members of Congress to trade stock based on nonpublic information and require stock trade filings almost every 3 months compared to the current 9 months.
Boehner said that the Securities and Exchanges Commission already have guidelines about the issue. However, he said he looks forward to the House hearing to find out “whether there’s a need for such a bill.”