Breitbart editor Peter Schweizer’s battle to ban members of Congress from using private information to enrich themselves scored a stunning victory on Thursday when the U.S. Senate voted 96-3 to pass the STOCK (Stop Trading On Congressional Knowledge) Act.
While the bill was widely hailed as an essential first step to begin repairing Congress’s abysmal approval ratings, three senators voted against the measure outlawing congressional insider trading.
One of the dissenters was Sen. Jeff Bingaman (D-NM). According to Sen. Bingaman, an amendment by Sen. Richard Shelby (R-AL) to the STOCK Act would subject 300,000 federal worker to the bill’s 30 day public disclosure reporting requirements for investments. Sen. Richard Shelby’s (R-AL) aides dispute this figure and say the amendment would only apply to 28,000 workers. Still, according to the New Mexico Democrat:
I can’t support a bill that places unreasonable and burdensome reporting requirements on over 300,000 federal workers.
Also voting against the STOCK Act was Sen. Tom Coburn (R-OK). Sen. Coburn said his opposition to banning members of Congress from engaging in the kinds of insider trading revealed in Breitbart editor Peter Schweizer’s New York Times bestselling book, Throw Them All Out, and the much-discussed 60 Minutes investigation his book sparked, is that he is not convinced any such instances of insider trading even exist.
The assumption here is that some of our colleagues are doing insider trading on the stock market. Nothing could be further from the truth. The real insider trading is the horse-trading that goes on in this body that is not always in the best interest of the country.
On the floor of the Senate, Sen. Coburn said,
I honestly believe everyone in our body is never going to use insider trading to advantage themselves over the best interests of the country….Nobody in this chamber can name somebody right now who’s trading on inside information.
Sen. Coburn’s comments stand in sharp contrast to Peter Schweizer’s investigations revealing the curious stock trades expertly-timed investment transactions of Sen. John Kerry (D-MA), Rep. Nancy Pelosi (D-CA), Rep. Spencer Bachus (R-AL), Sen. Dianne Feinstein (D-CA), and others.
The third dissenter to the ban on congressional insider trading was Sen. Richard Burr (R-NC). According to Sen. Burr, the STOCK Act “does no more than codify what existing law says. It’s ludicrous.” Sen. Burr called the legislation “insane,” equated the measure to passing a law requiring citizens to get a driver’s license (which already exists), and called himself and Sen. Tom Coburn “brave” for standing up against the ban.
While some like Sen. Burr believe have interpreted insider trading laws as already extending to members of Congress, Peter Schweizer, former Gov. Sarah Palin, and others have noted that the Securities and Exchange Commission (SEC) has never brought insider trading charges against a sitting member of Congress. The reason, they say, is simple: the SEC’s budget is controlled by Congress.
As Gov. Palin wrote in an op-ed for USA Today:
There is no way the SEC will ever go after a powerful congressman or senator. The SEC never has, even though insider trading prohibitions have existed since the 1930s. Here’s why: Congress sets the SEC’s budget, and senators approve the head of the SEC. Congress uses its power of the purse strings to threaten federal agencies that get in their way.For example, in 2006 the FBI got a search warrant from a federal judge to comb former congressman William Jefferson‘s office. The FBI already had evidence that Jefferson was taking bribes. Congress was furious that the FBI would dare search a fellow member’s office. Members claimed the search was unconstitutional. They even threatened to cut the Justice Department‘s budget in retaliation. All this despite the fact that 86% of Americans supported the FBI raid.
Does anyone really think the SEC under current law will have the courage to investigate the insider trading in Congress?
Despite Sen. Bingaman’s concern for distressing 300,000 federal workers with having to file disclosures, Sen. Coburn’s belief that no member of Congress would ever engage in insider trading, and Sen. Burr’s belief that the SEC would willfully crack down on the body that controls its budget without legislative cover to do so, the STOCK Act will advance to the House next week.