Legislation making it illegal for members of Congress to profit from insider information on stock trades cleared the House almost unanimously Thursday.
The Stop Trading on Congressional Knowledge (STOCK) Act passed overwhelmingly 417-2 with Republican Reps. Brad Woodall of Georgia and John Campbell of California voting “no.”
The legislation was passed by the Senate last week and now goes to a conference committee between the two chambers to work out some significant differences.
House Majority Leader Eric Cantor (R-Va.) said at a press conference following the vote that the broad bipartisan support sends a signal to President Barack Obama to sign the bill after final congressional passage.
“We’ve seen what the two sides can do if they are willing to work together,” Cantor said. “We’ve got some work to do to restore the bond of trust with the public.”
Rep. Lamar Smith (R-Texas), chairman of the House Judiciary Committee, cited the oath members of Congress are sworn to uphold and said the STOCK Act goes to the heart of what it means to faithfully discharge the duties of their office.
“Government exists to promote the public good, not to enrich public employees,” Smith said during the floor debate. “Decisions made by big government can have big money consequences.”
The legislation allows the Securities and Exchange Commission to enforce existing laws against members of Congress who seek to cash in on information they obtain in the course of doing the government’s work. It also sets stricter disclosure obligations for lawmakers to reveal their personal financial transactions within weeks, rather than a year.
However, Democrats objected to the removal of a Senate provision that would have required that everyone who participated in “political intelligence activities” register as a lobbyist.
Critics of that language said there were too many questions as to whom that would include and instead requested that a study be done on the matter.
“That’s really just a dodge,” House Minority Leader Nancy Pelosi (D-Calif.) said about the proposed study. “That’s just a way of saying we aren’t really going to do the political intelligence piece.”
Rep. Louise Slaughter (D-N.Y.) said Republicans “couldn’t stomach the pressure” and removed the provision because of objections from K Street lobbyists and Wall Street bankers.
“The political intelligence community will stay in the shadows, just the way Wall Street likes it,” Slaughter said.
Rep. Dan Lungren (R-Calif.) argued that including the language would have rendered the bill unconstitutional — citing the right to petition government that is guaranteed in the First Amendment.
“It would not have been an enforceable law,” Lungren said.
Even though Democrats described the measure as a flawed bill, they supported it as a critical step to regain the public’s trust.
“This Congress is so much better than the ratings the public gives us,” said Rep. Steve Cohen (D-Tenn.).
Added Rep. Tim Walz (D-Minn.): “We can’t wait for something perfect to move forward. Let’s get past this, have the president sign this, and get on to real business.”