In what has been called a “legislative speed record,” the STOCK Act has been passed in both the Senate and House with 96-3 and 417-2 voting “yay” respectively after just two-and-a-half months of consideration. I wrote about the Act largely being a public relations stunt back in December in the Washington Times and in a blogpost last week highlighting the desperation of Congress to regain the public’s trust. Co-sponsor of the STOCK Act, Rep. Tim Walz (D-MN) said that hepatitis would be more popular than congress if the Act wasn’t passed.
Despite passing in both bodies of Congress, the STOCK Act must once again pass in the Senate as two major provisions were removed from the version originally passed in the Senate last week. One of the provisions requires that professionals who sell non-public information relating to legislation and rule-making to hedge funds and investors, so-called political intelligence, must register with the government like lobbyists. It was part of the original House bill, but is now nixed. The other provision, which “prohibits undisclosed “self-dealing” by state and federal public officials to ensure that officials cannot secretly act in their own financial self-interest at the expense of the public, and in violation of existing ethics rules and regulations,” was added as a rider by Sens. John Cornyn (R-TX) and Patrick Leahy (D-VT). It had been proposed on its own, but was snuck into the STOCK Act last minute because of the bill’s absolute certainty of passage. Both were removed by the House under the leadership of Rep. Eric Cantor (R-VA).
Though on the surface the latter provision may appear a worthwhile law, Joe Luppino-Esposito of the Heritage Foundation provides an insightful analysis to the contrary. He concludes:
“As appealing as it might sound to give members of Congress a taste their own medicine, this proposed amendment would have a more devastating, far-reaching effect on all elected officials, and in some cases private citizens, at all levels. The amendment is a textbook case of overcriminalization: over-reaching federal criminalization, unclear terms, and inadequate criminal intent language.”
The rest of the STOCK Act has been kept more or less the same, although some of the language has been changed to include securities other than just equities and swaps as the original bill had intended. A provision preventing Congress and their staff from participating in IPOs premarket was also added. The so-called Pelosi provision was aptly named in regards to Rep. Nancy Pelosi’s (D-CA) husband’s participation in Visa’s IPO in the spring of 2008. It coincidentally occurred around the same time as legislation curbing credit-card swipe fees. Never mind that Pelosi’s husband is a multi-millionaire financier who has participated in multiple previous IPOs and is a long-term investor — not a trader. The fact that the legislation and the IPO coincided with one another is pure coincidence. The idea that Nancy Pelosi acted on inside information through her husband’s investment is absurdly ridiculous. I am not one to ever defend Pelosi, but this is blatant political maneuvering.
Rep. Walter Jones (R-NC) called the Pelosi provision “absolutely unacceptable” and “petty.”
Representative Jones should have included the entire STOCK Act in his comment, because that’s about the best summation of the whole legislation. Americans shouldn’t welcome this new law (it will sail through the Senate and Obama will sign it in a heartbeat) as progress, nor a sign of Congressional efficiency, nor an occasion to restore trust in Congress. They should see it merely as a giant waste of time, a distraction from the real issues Congress should be dealing with, and a shining example of the spectacle that is American Politics.