WASHINGTON – Legislation that would ban insider trading by lawmakers and thousands of executive branch officials headed for what could be a more contentious debate in the House after sailing through the Senate on a 96-3 vote.
House Majority Leader Eric Cantor, R-Va., repeated Friday that he plans to take the measure to the House floor next week for debate and vote, adding that "we are currently reviewing the actions the Senate took on that bill and we intend to strengthen that bill."
Cantor said Friday it was the Republican intention to "get a bill to the president's desk as quickly as possible so that there is no misunderstanding on the part of the people here that they can trust this institution and the members."
He dismissed Democratic requests that the House consider a similar longstanding Democratic measure, sponsored by Reps. Louise Slaughter of New York and Tim Walz of Minnesota, saying it would weaken the Senate bill.
Walz, in turn, said his bill had 282 sponsors and implored Cantor and Speaker John Boehner, "don't write something behind closed doors" and "don't do something that can't pass the Senate."
In a rare display of bipartisanship, the Senate rallied around the measure that both bans insider trading and takes a step toward restoring the tarnished image of lawmakers. It remains to be seen whether the House will do the same. President Barack Obama, who urged Congress to act on the legislation during his State of the Union addressed, repeated that he was ready to sign it immediately.
"No one should be able to trade stocks based on nonpublic information gleaned on Capitol Hill," the president said. "So I'm pleased the Senate took bipartisan action to pass the STOCK Act. I urge the House of Representatives to pass this bill, and I will sign it right away."
Obama said still more ethics restrictions were needed, "like prohibiting elected officials from owning stocks in industries they impact."
"With approval ratings of Congress at an all-time low, this bill represents an opportunity to build some trust with the American people," said Sen. Scott Brown, R-Mass., a chief sponsor of the bill. "The truth is, members of Congress have access to all kinds of sensitive information, and it has to be clear that the information is being used to serve our country, not to make a personal profit."
The legislation also requires that stock trades be posted online within 30 days. Several amendments were added to the bill before final passage.
Sen. Richard Shelby, R-Ala., won an amendment to include the 28,000 government workers in the executive branch in the bill, saying it would create a level playing field with the requirements for Congress. But the same amendment included conflicting language by Sen. Joseph Lieberman, I-Conn., that would apply to only 2,000 top policymakers — including the president, vice president and members of the Federal Reserve Board. Lieberman disputed Shelby's numbers, saying 300,000 executive branch workers could be affected.
A House-Senate conference will have to reconcile the two versions.
Sen. Charles Grassley, R-Iowa, successfully added language that would require "political intelligence" operatives to register and disclose affiliations, the same as lobbyists. These individuals are hired by stock traders to obtain useful information from members of Congress and their staffs.
Sens. Barbara Boxer, D-Calif., chairwoman of the Senate's ethics committee, and senior committee Republican Johnny Isakson of Georgia won an amendment that would force disclosure of all residential mortgages — by members of Congress, the president, the vice president and most Senate-confirmed appointees. Currently senators are not required to list all mortgages.
The Securities and Exchange Commission said laws prohibiting trading on inside, non-public information clearly cover members of Congress. In 2005, the SEC investigated then-Senate Majority Leader Bill Frist of Tennessee concerning his divestiture of stock in the family's hospital company days before its price fell on an analyst's forecast. Frist was not charged with wrongdoing.
To a large extent, Congress is reacting to a segment on CBS' "60 Minutes" that raised questions about stock trades by House Speaker John Boehner, the husband of House Democratic leader Nancy Pelosi and Rep. Spencer Bachus, R-Ala., chairman of the Financial Services Committee. All have denied wrongdoing and denounced the network's story.
Republicans insisted on including top government officials outside the Congress in the bill even though they also are covered by insider trading regulations and face tougher conflict-of-interest restrictions than members of Congress. In some cases, executive branch officials are required to divest themselves of stock holdings that pose a conflict. Lawmakers don't have to do that and the Senate bill would not require it.
In addition to the 30-day online reporting requirement, the Senate would have to join the House in posting members' annual financial disclosure statements online instead of making only paper copies available on request.
Sen. Rand Paul, R-Ky., proposed wiping out the entire bill and substituting a simple certification by senators each year that they did not participate in insider trading. It was defeated, with 37 senators voting "yes" and 61 opposed.