Aware that most Americans would like to dump them all, members of Congress hope to regain some sense of trust by subjecting themselves to tougher penalties for insider trading and requiring they disclose stock transactions within 30 days.
A procedural vote Monday would allow the Senate later this week to pass a bill prohibiting members of Congress from using nonpublic information for their own personal benefit or “tipping” others to inside information that they could trade on.
Insider trading laws apply to all Americans, but CBS' “60 Minutes” in November said members of Congress get a pass, citing investment transactions by party leaders and a committee chairman in businesses about to be affected by pending legislation.
The broadcast report raised questions about trades of House Speaker John Boehner, R-Ohio; the husband of Democratic leader and former Speaker Nancy Pelosi of California; and Rep. Spencer Bachus, R-Ala., chairman of the House Financial Services Committee.
All three denied using any insider information to make stock trades, but the broadcast set off a flurry of efforts in Washington to deal with the public perception.
A recent Wall Street Journal/NBC News poll of registered voters found 56 percent of them favor replacing the entire 535-member Congress. Other polls this year have given Congress an approval rating between 11 percent and 13 percent, while disapproval percentages have ranged from 79 percent to 86 percent.
House Majority Leader Eric Cantor, R-Va., said he's working on an expanded bill that would go beyond stock transactions and ban lawmakers from making land deals and other investments based on what they learned as members of Congress.
The Senate version of the Stop Trading on Congressional Knowledge (STOCK) Act would subject any member of Congress who violates the ban on insider trading to investigation and prosecution by regulatory agencies and the Justice Department. It also directs the House and Senate ethics committees to write rules that would make violators subject to additional congressional penalties.
“We can start restoring some of the faith that's been lost in our government by taking this common sense step of making members of Congress play by the exact same rules as everyone else,” said Sen. Kirsten Gillibrand, D-N.Y., who with Sen. Scott Brown, R-Mass., wrote the bill “We must make it unambiguous that this kind of behavior is illegal.”
President Barack Obama endorsed the bill in in State of the Union speech last week, saying he would “sign it tomorrow.” Brown used that opening to briefly speak with the president as he was exiting the House chamber after Tuesday's address.
“The insider trading bill's on Harry's desk right now,” Brown told Obama, referring to Senate Majority Leader Harry Reid. “Tell him to get it out, it's already there.”
“I'm gonna tell him,” answered Obama. “I'm gonna tell him, I'm gonna tell him to get it done.”
Obama raised the issue again in his radio and Internet address on Saturday.
“The House and Senate should send me a bill that bans insider trading by members of Congress, and I will sign it immediately. They should limit any elected official from owning stocks in industries they impact,” he said.