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OMIGAWD, Congress does something RIGHT...and bipartisan no less!
Friday, August 03, 2012 6:20 AM
Gettin' old, but still a hippie at heart...
Quote:House Republicans have been forced to close a potential loophole on their much-touted insider trading law -- a loophole CNN uncovered and reported about last month.
Because of CNN's report, the Senate and House passed new legislation Thursday to close the loophole that could have allowed family members of some lawmakers to profit from inside information.
Senators who were critical of the loophole after it was unearthed applauded the fix.
The STOCK Act, one of the rare bipartisan bills passed this year, was signed by President Barack Obama in April.
Lawmakers proclaimed that the bill, officially called the Stop Trading on Congressional Knowledge Act, would restore trust in government. It also applied new rules to some employees of the executive branch.
But CNN discovered the law that members of Congress thought they voted for earlier this year wasn't exactly as advertised. The STOCK Act requires that any trades of $1,000 or more made on or after July 3 have to be reported to the House and Senate within 45 days. But the House and Senate came out with two completely different interpretations of that rule.
In the Senate, the Ethics Committee released one page of guidelines in June ruling that members and their spouses and dependent children all have to file reports after they make stock or securities trades. But the House Ethics Committee disagreed.
Its 14-page memo released in June found that House members and aides covered by the law that their spouses and children were not covered. The Office of Government Ethics, which oversees all federal executive branch employees, sided with the House, informing its employees that their spouses and children don't need to file these periodic reports.
Both of the lead sponsors of the Senate bill didn't realize the discrepancy until CNN brought it to their attention last month.
Massachusetts Republican Scott Brown, the only Republican senator to attend the White House signing ceremony, said he was "obviously very concerned."
"Say I find out some information, I tell my wife and she goes and trades on it, what's the difference?" Brown told CNN.
Brown, who speaks constantly about this bill in his neck-and-neck race for re-election against consumer advocate Elizabeth Warren, said the whole point of passing the law was to demonstrate that members of Congress weren't held to a different standard.
Why was there a difference?
Robert Walker, a Washington ethics attorney and former chief counsel for both the House and Senate Ethics Committees, explained that the Senate bill did include a provision that covered spouses and children, but when Cantor's office wrote the House version, this language was shifted to a different section of the bill. The change meant that spouses and dependent children weren't subject to the new reporting requirements.
"The House recrafted some of the provisions of it and moved some of the provisions around. In that process, some of the Senate bill that applied to filing of these new reports was moved from one section of the bill to the other," Walker said.
The Senate Ethics Committee decided to stick with the spirit of the law that senators originally intended, but the House Ethics Committee went with the letter of the law, which included the loophole not requiring spouses and children to report financial transactions in a timely fashion.
Why did it matter?
The loophole went to the heart of what the STOCK Act set out to do.
While there were already laws in place barring members of Congress or the executive branch from profiting from nonpublic information that they learn in the course of their duties, it was extremely difficult for those at the Securities and Exchange Commission to enforce those laws.
The financial disclosure forms House members and senators were already required to file only come out once a year, making it tough to track any relationship between legislative action and a stock trade. That's why the STOCK Act added the rule that after each trade over $1,000 a report had to be filed in a timely manner.
In addition to closing the loophole for spouses and dependent children, the new legislation passed by the House and Senate also made a change that the Obama administration requested.
Some administration officials voiced concerns that the ability of foreign governments to view personal financial information about top government employees posed a national security threat.
To address those concerns, the bill gave executive branch employees a waiver from the requirement to disclose their stock or securities trades until September 30 to allow some additional time to determine the appropriate procedures for those officials.[i[More at http://www.cnn.com/2012/08/02/politics/stock-act-loophole/index.html?hpt=hp_bn3
Friday, August 03, 2012 7:28 AM
The poster formerly known as yinyang.
Quote:A new law designed to stop insider trading by members of Congress and nearly 30,000 federal workers is facing a constitutional challenge from the American Civil Liberties Union and other groups.
The ACLU filed a lawsuit Thursday in U.S. District Court in Greenbelt, Md. It says the law's requirement that federal workers disclose financial transactions greater than $1,000 is an unconstitutional invasion of privacy and subjects those workers to a real fear of identity theft.
The affected workers already have to file financial disclosures with the Office of Government Ethics. As a practical matter, though, those forms are rarely inspected by the public. According to the lawsuit, the office received only 79 requests for access to those disclosure forms in 2008, with an additional 127 requests submitted to the various executive agencies themselves. Also, the people asking to inspect those reports must identify themselves.
Under the new law, though, the information is easily available to anyone on the Internet, on the theory that disclosing such information would expose any trades in which an individual benefits from inside knowledge on congressional actions that affect the marketplace. That crosses the line and becomes an unreasonable invasion of privacy, said the plaintiffs' attorney, Jack McKay.
McKay said courts have previously made a distinction between limited public disclosure of personal data and widespread dissemination.
The lawsuit does not seek to overturn the restrictions as they apply to members of Congress and their staffs.
"Congress can do what it wants to do," said Arthur Spitzer, legal director for the ACLU's Washington D.C. chapter.
In its original form, the bill applied only to Congress and its staffers. But an amendment by Sen. Richard Shelby, R-Ala., extended the authority to senior members of the executive branch. Shelby argued that, as a matter of parity, if disclosure was a good idea for Congress it was also a good idea for the executive branch. Obama signed the bill into law in April.
"I believe what is good for the goose, it seems to me, should be good for the gander," Shelby said earlier this year on the Senate floor in support of his amendment.
Shelby's spokesman, Jonathan Graffeo, declined to comment on the lawsuit, but said Shelby worked closely with other lawmakers to ensure that the legislation applied only to those who were already required to file disclosure forms.
In addition to privacy concerns, the lawsuit questions whether the law is necessary. The initial legislation was filed in response to press reports that some members of Congress or their families may have profited on financial deals where they benefited from inside knowledge of how Congress would act. Spitzer said there are no similar reports of such problems on the executive side and that executive branch workers were already subject to criminal penalties that did not exist for members of Congress.
"It's a solution in search of a problem," Spitzer said.
Plaintiffs in the lawsuit include the Senior Executives Association, the American Foreign Service Association, the Assembly of Scientists and the National Association of Immigration Judges.
The law takes effect at the end of the month, unless the plaintiffs can win a court injunction barring the law's implementation.
Friday, August 03, 2012 7:34 AM
Friday, August 03, 2012 7:49 AM
Quote:Originally posted by Niki2:
Damned ACLU; while I respect them on many things, on others I think they're assholes using the Constitution for their own agenda.
Friday, August 03, 2012 7:56 AM
Friday, August 03, 2012 7:06 PM
Quote:Originally posted by Niki2:
Just how it affects me personally; as I said, I appreciate their efforts, especially as they'll take on ANYTHING. That's all.
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