WASHINGTON D.C. - Following the passage of modified version of the STOCK Act in the U.S. House on Thursday, 1st District Minnesota Congressman Tim Walz is optimistic about the future of the bill he has shepherded for six years.
The STOCK (Stop Trading on Congressional Knowledge) Act is a bill that bars members of Congress and their staff from trading stocks based on information learned in their official duties, which some claim is equivalent to insider trading. The practice is currently legal for members of Congress.
Walz has presented the bill every legislative session, garnering minimal support, until a "60 Minutes" report last fall brought the bill to public attention. The resulting response brought co-sponsors into the triple digits for the bill and resulted in swift, bipartisan passage in the Senate. The final Senate version of the bill, which passed 96 to 3, expanded the bill to cover the executive branch.
The House version of the bill differs from the Senate's version by omitting a provision that requires registration of political intelligence firms similar to how lobbyists are registered. The firms make money by peddling inside information gleaned at Congress to Wall Street traders.
House Majority Leader Eric Cantor initially slowed the bill in the House by halting a crucial hearing. He also removed the provision on political intelligence firms. However, Cantor offered to have a Congressional study done on the issues. Walz stated Cantor promised him full support for legislation on the provision if the study found it was the best course of action.
The STOCK Act passed in the House 417 to 2 and it is the first major ethics bill in Congress in five years.
Frustrated but optimistic
Walz said he was very frustrated by the removal of the provision on political intelligence firms. But, he said he was more focused on the progress of the bill.
"My entire intention behind the bill is to restore the public perception and integrity of [Congress]. Disagreeing over beliefs on a particular subject is part of healthy democracy. The perception that Congress members are gaming the system is a cancer to democracy," said Walz, "The important part core of the bill is still there."
He said he will continue to work towards restoring the provision. But, he said that he would be willing to support a version of the STOCK Act without the provision if absolutely necessary for its passage. He said that putting the requirement on members of Congress is the primary importance.
"What [political information firms] do isn't illegal, like lobbying isn't illegal. But, they should be registered and visible to the public. If nothing, it's important that even the perception of abuse by the public is addressed," said Walz.
He said he liked some provisions that were added to the House version of the bill, particularly the provision that would require the disclosure of information on mortgages held by members of Congress.
Walz said he thought that one of the biggest hindrance in the bill's progress was people's failure to recognize members of Congress were legally allowed to use their privileged information. He said some still don't realize it's legal, alluding to Minnesota Congressman John Kline vehemently denying it was legal at a Jan. 30 meeting in Shakopee. He said Kline was a very honest man that he respected, but he thought Kline legitimately didn't realize it was allowed.
"They assume it's common sense that it would be illegal, which is why this bill makes sense. What I say to [people that don't realize it's legal] is that there's no harm in making it perfectly clear," said Walz.
Walz said that President Barack Obama including mention of the STOCK Act in his State of the Union address sealed the deal on the bill. He said that the momentum from the "60 Minutes" report had slowed, but the Obama's public addressing of the matter added the necessary pressure.
Future of House and
Walz said he will push for a conference report, which is an agreement negotiated between the House and Senate on a bill via conference committees. It would reconcile the House and Senate versions into one unified bill. The new bill would be returned to both the House and Senate for passage before being sent to the Obama to be signed into law.
Walz said it is possible that the Senate could simply adopt and pass the House's version of the bill, which would allow it to advance to the president. He said he is willing to accept the House version being passed in the Senate if absolutely necessary.
"I obviously feel that my version was fine, but changes to bills is how our system works," said Walz.
He said he feels the absence of the provision on political intelligence firms wouldn't fundamentally undermine the bill's intentions, particularly because the bill's passage already shined a light on the profession. He said he believes Cantor that the firms will get a serious look in the Congressional study.
"I respect the position [Cantor] is in, and I believe he has good intentions. It's more than a little unusual for a majority leader to give praise to a piece of legislation. So, I take it as a big positive," said Walz.
(Josh Moniz can be e-mailed at email@example.com)