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Senate adds top administration officials to insider trading ban, new disclosure requirements
WASHINGTON (AP) ' Trying to restore lawmakers' sagging image with voters, the Senate raced Thursday toward passing a bill to explicitly prohibit members of Congress, top aides and senior administration officials from insider trading and require them to publicly disclose financial transactions within 30 days instead of once a year.
Senators in both parties acknowledged the purpose of the legislation is to help dig members of Congress out from poll approval ratings that have fallen to the teens after a year of excessive partisanship pervading almost every issue before Congress. A final vote was expected late Thursday.
"When polls show low public confidence in Congress, there is a strong desire to address the concerns that underpin the public's skepticism," said Sen. Susan Collins, R-Maine, one of the bill's managers.
Some senators expressed concern that the bill was becoming too burdensome but in the end they came together in an attempt to send the public a message that lawmakers are not treated differently from other Americans when it comes to obeying the law.
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, too, are covered by insider trading 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 on line instead of making only paper copies available on request.
Sen. Richard Shelby, R-Ala., won an amendment to include the top 28,000 government workers in the executive branch, saying it would create a level playing field with the requirements for Congress. But Sen. Joseph Lieberman, I-Conn., also won an amendment applying the bill to only 2,000 top policymakers, including the president, vice president, and members of the Federal Reserve Board.
"When it comes to avoiding and preventing conflicts of interest, the executive branch is well ahead of the legislative branch," Lieberman said in arguing for the smaller coverage. He said the difference between his version and Shelby's would be resolved once the House passes a bill and negotiators merge it with the Senate version.
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.
President Barack Obama used his State of the Union speech to support the bill, but that was before he and other top officials in the government were added to its coverage. White House spokesman Eric Schultz, said Thursday that the administration supports the inclusion, while noting "the most important restrictions already apply to the executive branch and have for years."
The House may have an even tougher bill. Majority Leader Eric Cantor said land deals and other transactions also should be reported. Cantor said he hoped to ready a bill for a vote later this month.