CBS News' "60 Minutes" aired a fairly condemning report on Sunday, alleging that several Members of Congress--including Reps. Spencer Bachus (R-AL) and Nancy Pelosi (D-CA)--have earned hefty stock returns thanks to inside information obtained on the job.
From the media wave that followed, you might think that CBS was the first outlet to ever reveal this squeamish practice. In reality, it's been around for years-and so has the legislation that could stop it (but no one really cared.) To that extent, the best part about the CBS report is that it may renew support for the Stop Trading on Congressional Knowledge (STOCK) Act (H.R. 1148) and end congressional insider trading for good.
CBS revealed why this Act couldn’t be more timely. According to the report, the day after House Rep. Bachus (R-AL), who is chairman of the House Financial Services Committee, received a closed-door briefing from the U.S. Treasury Secretary and Federal Reserve Chairman that warned of a global financial catastrophe, Bachus reportedly bought option funds that would go up in value if the market crashed—ignoring his own advice to the American people.
The STOCK Act would make this practice illegal and in the words of the Bureau of National Affairs: "level the playing field between corporate and congressional insiders.”
Incarnations of the STOCK Act have been introduced three times in the past, but no one has voted on it (My organization, the Project on Government Oversight, supported the Act in the last Congress). The time has come to stop shaking our fists at the politicians making extra bucks off of a legally grey loophole—and throw support into the solution. At present, the STOCK Act is hanging out in the House Judiciary Subcommittee on the Constitution.
What do you think of the CBS report's allegations? Will you support the STOCK Act?