[Congressional Record (Bound Edition), Volume 158 (2012), Part 1]
[House]
[Pages 1184-1186]
[From the U.S. Government Publishing Office, www.gpo.gov]




                               STOCK ACT

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 5, 2011, the gentlewoman from New York (Ms. Slaughter) is 
recognized for 60 minutes as the designee of the minority leader.
  Ms. SLAUGHTER. Mr. Speaker, from Main Street to Wall Street, it is 
common knowledge that insider trading of stocks is a crime. In 2004, 
celebrity homemaker Martha Stewart was sentenced to 5 months in prison. 
In 2011, Wall Street titan Raj Rajaratnam was sentenced to 11 years in 
prison for profiting from stocks bought and sold on insider 
information.
  Despite these headline-grabbing convictions, when it comes to Members 
of Congress, the law of the land clearly does not apply. In the Halls 
of Congress, there are no clear laws preventing Members of Congress 
from using their public office to obtain insider information and trade 
stocks for private enrichment. We thought last week when the Senate 
passed the STOCK Act 96-3 that the House would have a chance to follow 
and that we would be moving forward to remedy that wrong. We were 
unfortunately very much wrong. We had had a markup 2 months ago in 
December on the STOCK Act; and at the last moment, the bill was 
snatched away, the meeting was adjourned, and we heard no more.
  After the Senate passed the bill, the House decided that they indeed 
would pass one, any kind that was going to be strengthened and made 
better. We discovered yesterday that what was going to happen was that 
we would no longer have a freestanding bill, but instead we would have 
a suspension bill.
  Let me take just a second to explain the difference between those two 
bills. We would have had an opportunity under a regular bill to be able 
to amend it, and we would have been given the right to recommit. Under 
suspension, we can do nothing but vote it up or down. This bill, which 
has the most support that I've seen in my 20 years in Congress, more 
editorial support all over this country and support in parts of Europe, 
is more than you can even imagine, and it was simply taken away. Was it 
made stronger? Absolutely not. We said yesterday that we were afraid 
the euphemism for making stronger meant that the bill would be gutted, 
and indeed it was.
  The part called ``political intelligence,'' which is an investment 
that people make in getting political intelligence from Members of 
Congress and their staff, yields $402 million a year just simply from 
information traded from Members of Congress and sold to the clients of 
hedge fund dealers. We're pretty disappointed about that. It happened 
in the dark of night. We didn't even know it was going to be in the 
bill until 10:30.
  I was really pleased today to hear from both Senator Grassley and 
Senator Leahy of their great disappointment regarding what the House 
had done, and we are demanding that we have a conference on these two 
bills so that we can have an opportunity to keep political intelligence 
in that bill because of its major importance. In fact, if we do 
nothing, this totally unregulated industry will simply continue to 
prosper in the shadows with no one watching.
  In a way, the STOCK Act is a statement of how we view ourselves, and 
it certainly is the relationship to those that we serve. It's a 
reflection of our role as public citizens and knowledge that while we 
may receive the honors and power conferred by our service, we ourselves 
are equal in our rights and responsibilities just as every other single 
American citizen. No matter how powerful our position, no matter how 
hallowed the Halls we walk, no one here is above the law.

                              {time}  1730

  With the passage of the STOCK Act, Congress could have moved one step 
closer to living up to the faith and trust bestowed upon us by the 
American people, citizens for whom we serve. Unfortunately, that has 
been snatched away from us at the 13th hour.
  We are hoping either for a reconsideration by the leadership of this 
House or that we can, with the help of the Senators that I've 
mentioned, be able to demand a conference between the two Houses on the 
bill they passed and the travesty that we will be passing here.
  I yield to the gentleman from Minnesota.
  Mr. WALZ of Minnesota. I thank the gentlelady.
  Mr. Speaker, the gentlelady from New York has a long history of 
service and was concerned about ethics before ethics were in vogue, and 
certainly before ``60 Minutes'' came on.
  All of us here enjoying in this people's House the incredible honor 
and responsibility and privilege that we have been given by our 
neighbors, we gather in here as teachers and soldiers, as 
microbiologists, as new Members, attorneys who join us here, and were 
sent here from across this Nation, from the plains of Minnesota to the 
high rises of New York City to the beautiful areas of Oregon. Our 
newest Member is joining us tonight. And the responsibility of standing 
here and self-governing calls the responsibility of us to conduct 
ourselves in a manner not just equal to every other Member, every other 
citizen, but to a higher level.
  And the absolute perception, whether real or not, the perception that 
Members of Congress or elected officials are somehow using their office 
to profit, or somehow tipping people to profit for themselves, is not 
only an affront to our neighbors who sent us here, it's a cancer on the 
democracy.
  This institution and deliberative self-government will survive long 
before us. The giants who came before us and the words that we stand in 
front of, they will last into the future. This institution requires us 
to conduct ourselves in this manner.
  So that's why, coming from the high school classroom as a teacher, 
one of the first people I met in this Chamber was the gentlewoman from 
New York, and she knew that I was sent here to try and do things 
differently; yes, to be passionate about how we see our political 
differences, to be passionate about how we educate our children, how we 
care for our veterans, how we build our highways, how we bring about a 
system of health care that's fair, and to respect our neighbors and to 
respect our colleagues on the other side of the aisle for their 
differences, but what's happened and what the American people have lost 
faith in is not the idea of democracy, but the idea that we all play by 
the rules.
  So I think it's important, when the gentlelady from New York speaks 
and speaks about this idea of tightening the rules on insider trading, 
she's talking about protecting the democracy. She's talking about 
making sure no one gains access, so that when the teacher walks through 
the door, when the microbiologist walks through the door, when the 
attorney walks through the door and they're representing

[[Page 1185]]

650,000 people in their district, that those constituents know the 
decisions we make are based on what's best for the Nation, the things 
we talk about are not being used to enrich someone personally, because 
it's not only wrong--and now, after tomorrow, we're going to, 
hopefully, say illegal--it also is so undermining to the system.
  So I think this debate, and this decision we have, the gentlewoman's 
point goes much deeper than what's possible politically; it's what's 
required of us. And what we're asking for, and what the gentlelady has 
so eloquently talked about, is just give us the opportunity to talk 
this through.
  The genius of this system put us here. It put the Senators on the 
other side of this great Capitol, and it told us to get together. They 
passed a piece of legislation. We compromised over here with something. 
Let's bring them together.
  And the argument being made on political intelligence and supporting 
the system is absolutely correct. I think today, and I want to be very 
clear, Mr. Speaker, none of us here are patting ourselves on the back 
and saying, Look, we passed the STOCK Act. The gentlelady's worked at 
it for 6 years. It feels like a sense of accomplishment not for her, 
for me, or our colleagues who have been stalwart supporters. It's an 
affirmation to the American public that the system works, and they owe 
us to do the best job we can before we move that forward.
  So this isn't, Good job, we passed a bill to do the right thing. 
Americans live by this rule every day. What we did was we closed a 
loophole that existed, and we went further and talked about how could 
this be construed to enrich others and corrupt the democracy.
  So you're hearing terms like ``political intelligence.'' What we're 
saying is, do it in the light of day. Sunshine cures many ills.
  And so I support the gentlelady's point. I support it because I know 
it didn't come about by a born-again ethics. It came about by years and 
a lifetime of not giving the sermon but living the sermon.
  So I ask my colleagues, listen to what's being said here. Take this 
into consideration. Compromise. Get this to the Senate, and then let's 
give the American public a real unique gift in this political 
environment, a win on something important that makes them believe that 
things can be better. We owe that to them.
  Ms. SLAUGHTER. I am pleased now to yield time to my good friend and 
fellow New Yorker, Mrs. Maloney.
  Mrs. MALONEY. I thank the gentlelady for yielding and for her hard 
work on this issue and many others.
  Mr. Speaker, I am really very pleased that we are finally working to 
address the insider trading issue in this body and that it will finally 
be on the floor tomorrow. We should not have had to wait so long for a 
bill that has 270 cosponsors; and I am proud to be one of them, and I 
have been in past Congresses.
  I want to thank my colleague from New York, Louise Slaughter, who has 
worked on this legislation for 6 long years, and my colleague from 
Minnesota, Mr. Walz, for their excellent leadership, perseverance on 
this issue.
  Mr. Speaker, I have said it before: Elected officials must be like 
Caesar's wife in avoiding the appearance of impropriety. The need to 
expressly prohibit this activity in statute cannot be overstated. 
Insider trading is illegal on Wall Street and it should be illegal on 
Capitol Hill.
  The STOCK Act is bipartisan, commonsense legislation to prohibit 
federally elected officials from profiting on nonpublic information 
they receive through their legislative duties. This is long-overdue 
reform of how Washington does business, and the American people deserve 
and expect us to pass it swiftly.
  Regretfully, the bill introduced by the Republican majority does 
nothing to regulate the political intelligence community. In fact, when 
they wrote their version of the STOCK Act--and they did not go through 
regular order; it should have gone through the Financial Services 
Committee, on which I serve, and others--the Republican leadership did 
not consult with the bipartisan coalition that has championed this bill 
for years. They did not mention anything to Mr. Walz or Ms. Slaughter 
and, as a result, they introduced a flawed bill. This bill is weaker, 
not stronger, and it has been denounced by Senator Grassley and Senator 
Leahy.
  Like the lobbyists before them, political intelligence operatives use 
a proximity to power to serve high-paying clients. Unlike lobbyists, 
these operatives are nameless. Under current law, they are not required 
to identify themselves as they go about their work. And we know all too 
well what happens when Congress and K Street work in the dark.
  I join my colleagues, Congresswoman Slaughter and Congressman Walz, 
in calling for a conference committee where Senators Leahy and 
Grassley, and also a bipartisan coalition here in the House, can work 
together to make sure that the political intelligence community is 
covered by this bill.
  I thank my colleagues for their hard work, and I will join them in 
working to make this stronger, to really return it to the strong form 
that my colleagues drafted.
  Ms. SLAUGHTER. Mr. Speaker, it is with great pleasure and absolute 
delight that I'm able to yield to the next speaker, who is a newly 
minted Member of Congress for just a little more than 24 hours, Suzanne 
Bonamici from Oregon.

                              {time}  1740

  Ms. BONAMICI. Mr. Speaker, thank you for this opportunity. I want to 
thank the Congresswoman for yielding to me this evening about this 
important bill. Congressman Walz' and Congresswoman Slaughter's 
leadership on this issue has been remarkable. Thank you so much for 
your tireless efforts.
  The idea behind the STOCK Act is simple. Members of Congress, their 
staff, and other government officials should not be using their access 
in Washington to enrich themselves on Wall Street.
  I am already a proud cosponsor of H.R. 1148, a bill that rightfully 
enjoys broad, bipartisan support. The protection of the integrity of 
our government institutions is not a partisan issue. The STOCK Act is 
one critical act we can take to make it clear to our constituents back 
home that we, like them, will not tolerate the types of activities that 
we were all shocked to read about in the press.
  The trust that my constituents have placed in me is something that I 
take very seriously. As public servants, we are here to work for the 
people, not outside firms looking to profit, and certainly not to make 
a quick buck for ourselves. When you hear about scandals like this, 
it's no wonder the public has so little confidence in our institutions 
of government.
  If we want to restore citizens' faith and earn back their trust, we 
must make sure that everyone is playing by the rules.
  As I mentioned yesterday in my remarks to this House during the 
incredibly warm welcome I received as its newest Member, we have a 
fundamental belief in this country that if you work hard and play by 
the rules, you can succeed.
  The reports of past insider trading make clear that the rules, as 
they apply to Members of Congress and others in the public sphere with 
respect to their Wall Street dealings, are not sufficient.
  The STOCK Act improves the rules to ensure not only that they are 
sufficient, but there are consequences for breaking those rules. I'm 
proud to join with my colleagues, both in support of the STOCK Act and 
in the recent effort to bring the bill forward for consideration by the 
House.
  Now, it's my understanding that we're going to see an altered version 
on the floor before we conclude this week's business. Now, I'm 
surprised to learn as a new Member that no amendments will be allowed 
on such an important bill. Although the weakening or elimination of 
certain key provisions, such as the political intelligence language, is 
deeply disappointing, I remain committed to the effort of ensuring that 
all of us in public office play

[[Page 1186]]

by the same rules as the people who have entrusted us with the 
privilege of being their voice in Washington.
  I look forward to continuing to work with my colleagues to restore 
our constituents' confidence in their representatives and in their 
government institutions.
  Ms. SLAUGHTER. I am now pleased to yield to the gentleman from Iowa 
(Mr. Loebsack).
  Mr. LOEBSACK. I thank the gentlelady, Ms. Slaughter, and I thank her 
effort and the effort of Congressman Walz as well for initially 
bringing this bill forward at a time when we had not heard about some 
things we heard on ``60 Minutes,'' at a time when really nobody was 
paying attention to this issue. These two folks had the courage to 
bring this forward, and I want to thank them for that.
  I was really proud to be the fourth cosponsor of this legislation 
back in May, at least the version we're talking about tonight, not the 
current version that's on the floor. I really think that it's 
absolutely urgent that we fix the current loophole that was already 
mentioned by so many of my colleagues, that allows Members of Congress 
to use information that they obtain in a nonpublic fashion for their 
own financial benefit.
  This is something that on the face of it simply makes no sense that 
we should allow it to happen. Not in a democracy, not certainly in 
Congress, in this institution. It was mentioned that this institution 
is not much respected right now. In fact, the latest Gallup poll today 
showed Congress at 10 percent. It's not surprising given the stories 
that we've heard, given the problems that we've seen in this country, 
and especially when we have something like the STOCK Act in front of 
us, and there's bickering going on that this thing is not being passed 
as quickly as it should have been passed.
  Now we find that my good friend and my colleague Senator Grassley 
from Iowa is upset as well because as was mentioned, the political 
intelligence loophole is there at the moment as well. That's got to 
stop.
  We've got to pass the bill here in the House. We've got to do what we 
can to have a conference committee that's going to have real teeth, 
that's going to take care of that loophole. Senator Grassley is exactly 
right about that. We need to show the American people that we in 
Congress play by the same rules that they do, that we're not above the 
American people. So when we go home to our districts, as I do every 
week--every weekend I'm home, people have faith in us. They have 
confidence in the institution of Congress, and that they know, as we 
should, that we play by the same rules as they do.
  I want to thank Congresswoman Slaughter and Congressman Walz for 
organizing this Special Order tonight. I'm very, very proud. This is 
only the second time that I've done this since I've been in Congress. 
This is my sixth year. But I couldn't be more proud than to come up 
here and speak on this very important issue, and as I said, I do it 
because the people in Iowa, the people in my district, tell me this is 
the right thing to do.
  Ms. SLAUGHTER. I yield back the balance of my time.

                          ____________________