WASHINGTON – The Senate on Thursday sent the White House a bill to explicitly ban members of Congress, the president and thousands of other federal workers from profiting from nonpublic information learned on the job.

While the bill lets the public see more of government officials’ financial dealings, and view them online more frequently, it abandons an earlier proposal to require public reports from people who gather information from Congress — and sell it, mainly to investors.

President Obama has said he would sign the STOCK Act, which stands for Stop Trading on Congressional Knowledge.

The driving force behind the bill was Congress’ need to boost its dismal approval ratings, and the perception from a television report that lawmakers are profiting personally from their work. Polls in the past several weeks indicated between 12 percent and 19 percent Americans approved of the job Congress is doing.

The STOCK Act would require that public reports of new transactions exceeding $1,000 be posted online either 30 days after the individual was notified of a transaction in his or her account, or 45 days after the transaction. The House currently posts disclosure information on the Internet, but the Senate still requires people seeking the data to appear personally in a Senate office building.

This would be in addition to the annual disclosure statements filed currently.

In an unusual move, the legislation passed unanimously without a vote on the measure itself. Passage was automatically triggered by a procedural motion that was approved, 96-3. Voting “no” were three Republicans: Chuck Grassley of Iowa, Tom Coburn of Oklahoma and Richard Burr of North Carolina. Sen. Mark Kirk, R-Ill., did not vote.

GOP Sens. Susan Collins and Olympia Snowe of Maine both voted for the bill.

“At a time when public confidence in Congress is so low, we must act to remove any doubt that the law and rules against insider trading apply to members of Congress,” said Collins, the top Republican on the Senate Homeland Security and Governmental Affairs Committee. “The STOCK Act will help assure the public that we understand that elective office is a place for public service, not private gain.”

Snowe said that, “When citizens are elected and sent to Congress, they are given a sacred public trust to serve the country, not to use inside information to enrich themselves.”

Not everyone in Congress bought into Sen. Joseph Lieberman’s view that the insider trading bill was “the most significant ethics reform to pass Congress” in the past five years.

Grassley, who sponsored the abandoned proposal to regulate so-called political intelligence operatives, said, “This could have been a lot more significant. It’s irresponsible for the leadership to have dropped the ball on requiring political intelligence agents to register. We could have exposed the secret flow of information between Washington and Wall Street.”

The bill does include other reforms. It would deny federal retirement benefits to the president, vice president or an elected official of a state or local government convicted of certain felonies. It also would prohibit senior executives of mortgage giants Fannie Mae or Freddie Mac from receiving bonuses while the companies are under government control. And it would expand the definition of public corruption crimes and increase maximum penalties.

It also would require officials to disclose the mortgages on their primary residences, a provision that has been exempt from reporting requirements.

Lieberman, who managed the bill to final passage, said the plan to regulate political operatives selling information was dropped because of concerns it would violate free speech rights of people who meet with members of Congress. Instead, a one-year study of political intelligence operatives was ordered.

Despite that dispute, the bill’s four main sponsors reflected its bipartisan support: Lieberman, an independent from Connecticut; Collins; Kirsten Gillibrand, a New York Democrat; and Scott Brown, a Massachusetts Republican whom Democrats are trying hard to defeat.

Federal insider trading laws have no exemption for members of Congress and other federal officials, but there is little evidence that many lawmakers have been investigated.

 

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