Presentation on theme: "Why run for office?. Why are politicians always rich? Cost to run Cost to run Running for Congress has never been an easy proposition, or an inexpensive."— Presentation transcript:
Why run for office?
Why are politicians always rich? Cost to run Cost to run Running for Congress has never been an easy proposition, or an inexpensive one. But even in these years of low inflation, the cost of winning a seat in the U.S. Senate or House of Representatives keeps climbing upwards, with no guarantee of success when all the votes are counted. Here's how the numbers break down.
What do Politicians get paid? 57% of Congress are millionaires The current salary (2011) for rank- and-file members of the House and Senate is $174,000 per year.
Beginning January 2009, US representatives and senators are paid $174,000 a year. That represents an increase of $4,700 and the 10th time since 1998 that congressional pay has been given a boost. an increase of $4,700an increase of $4,700 No raises were given since…
Retirement Benefits Retirement Benefits for members are available through the Civil Service Retirement (CSRS) Federal Employees' Retirement System (FERS). and the newer Federal Employees' Retirement System (FERS). (FERS was enacted in 1986 to provide retirement benefits for all civilian employees and postal workers hired after Dec. 31, FERS consists of three major parts Social Security, a required basic plan to supplement Social Security an optional tax-deferred savings plan similar to private 401(k) plans. Under CSRS, a member becomes eligible for benefits upon retirement from Congress if he or she is 62 years old with five years of congressional service; 60 years old with 10 years of service; or 50 years old with 20 years of congressional service. Under FERS, a member becomes eligible for benefits upon retirement from Congress if he or she is 62 years old with five years of congressional service; 50 years old with 20 years of service; or any age with 25 years of congressional service. "Retirement Benefits for Members of Congress," by Katelin P. Isaacs, CRS Report RL30631, Updated January 3, 2011 from the Congressional Research Service (17-page PDF )"Retirement Benefits for Members of Congress," by Katelin P. Isaacs, CRS Report RL30631, Updated January 3, 2011 "Federal Employees: Pay and Pension Increases Since 1969," by Katelin P. Isaacs, CRS Report , Updated December 7, 2010 from the Congressional Research Service (13-page PDF )"Federal Employees: Pay and Pension Increases Since 1969," by Katelin P. Isaacs, CRS Report , Updated December 7, 2010
A House member would have to be re-elected twice to qualify, but a first-timer serving a full six- year term in the Senate will thereafter be eligible for retirement at our expense until death or until the coffers run bone-dry, whichever comes first.be re-elected twice
Personal Staff Allowances Personal Staff Allowances enable members to hire aides for clerical, administrative, legislative and media support. Representatives' staff allowances can be used to hire up to 18 permanent and four non-permanent aides divided between the members' Washington and district offices. Up to $75,000 of a representative's staff funds can be transferred to his or her official expense account for use in other categories, such as computer and related services. Senators' personal staff allowances vary with the size of the members' states. Senators may hire as many aides as they wish within their allowance; typically this ranges between 26 and 60, depending on the size of the state and the salary levels offered to the staffers. The maximum salary for a staffer in a member's personal office was $ in the Senate and $ in the House In addition to their personal staffs, senators and representatives are assisted on legislative matters by staffs of the committees and subcommittees on which they serve. Congressional salary information is available from LegiStorm. LegiStorm "Legislative Branch Staffing, ," by R. Eric Petersen, CRS Report for Congress R40056, October 15, 2008 (16-page PDF )"Legislative Branch Staffing, ," by R. Eric Petersen, CRS Report for Congress R40056, October 15, 2008
Altmeyer, Thomas Flynn Altmeyer, Thomas Flynn Bowles, Maureen G. Claycombe, True Englund, Shelby D. Frankovitch, Carl A. Harbison, Phillip Adam Hempelmann, Geoffrey L. Hempelmann, Geoffrey L. Jezierski, Jeffrey T. Kettlewell, Kelly P. Krushansky, Pamela Martin, Kathryn A. Moore, Betsy G. Moorhead, Sally Gaines Moorhead, Sally Gaines Parsons, Richard E. Seré, Andrew D. Stevens, Amanda D. Toth, Cory T. Westerfield, Sheila William, Shane W. Wooldridge, Linda WV 1 st : Congressman David B Mc Kinley’s staff
Expense Allowances Expense Allowances for members, kept separate from personal staff allowances, cover: domestic travel, stationery, newsletters, overseas postage, telephone and telegraph service, and other expenses in Washington and in the members' state or congressional districts. See also Legislative Branch Appropriations, 2007, S. Rept , June 22, 2006 (67-page PDF )Legislative Branch Appropriations, 2007, S. Rept , June 22, page PDF Legislative Branch Appropriations, 2010, S. Rept , June 18, 2009 (65-page PDF )Legislative Branch Appropriations, 2010, S. Rept , June 18, page PDF Legislative Branch Appropriations, 2012, S. Rept , September 15, 2011 (62-page PDF )Legislative Branch Appropriations, 2012, S. Rept , September 15, page PDF "Legislative Branch: FY2012 Appropriations," by Ida A. Brudnick, CRS Report for Congress R41870, August 3, 2011 (28-page PDF ) Legislative Branch: FY2012 Appropriations
personal laudatory and complimentary related to a political campaign The use of the frank is prohibited for mail that is purely personal, mail that is "laudatory and complimentary" to the member, or mail related to a political campaign
franking privilege In 1989, the franking privilege came under strong attack – GIVING INCUMBENTS AN UNFAIR FINANCIAL ADVANTAGE IN ELECTIONS and even appeared endangered at one point. The attack focused on incumbents' use of mass mailings, particularly newsletters about a member's activities and notices of town meetings, to raise name identification in an election year. Runaway costs of such mailings also were a point of concern. [GIVING INCUMBENTS AN UNFAIR FINANCIAL ADVANTAGE IN ELECTIONS] In legislation considered in 1989, both the House and Senate voted at different points to eliminate the franking privilege for mass mailings. However, in the end, members only cut in half, from six to three, the number of such mailings a member is allowed to send each year. (Mailed announcements for town meetings were not included.) The final provisions of the legislation limited the amount of newsletters and set up separate funding accounts for the House and Senate to make it clear which chamber is exceeding its limits. The Senate in 1989 changed its internal rules concerning franked mail to allocate funds among senators and to prevent use of campaign funds to pay for franked mass mailings - a practice House rules already barred. House member a mail budget and required public disclosure of how much each member spends on mailingsThe fiscal year 1991 Legislative Branch Appropriations Act also imposed new restrictions on franking privileges. The act gave each House member a mail budget and required public disclosure of how much each member spends on mailings. The act also limited a senator's ability to transfer funds into their mail accounts from other accounts. See also " Franking Privilege: Historical Development and Options for Change," Matthew Eric Glassman, CRS Report RL34274, Updated December 21, 2010 from the Congressional Research Service (26-page PDF )" Franking Privilege: Historical Development and Options for Change," Matthew Eric Glassman, CRS Report RL34274, Updated December 21, 2010
The franking privilege gives lawmakers millions in tax dollars to create a favorable public image. Experts across the political spectrum have labeled the frank as an unfair electioneering tool. In past election cycles, Congressional incumbents have spent as much on franking alone as challengers have spent on their entire campaigns.The franking privilege gives lawmakers millions in tax dollars to create a favorable public image. Experts across the political spectrum have labeled the frank as an unfair electioneering tool. In past election cycles, Congressional incumbents have spent as much on franking alone as challengers have spent on their entire campaigns.
Foreign Travel Foreign Travel by members for the conduct of government business is financed through special allowances. These funds can come from various sources. Mutual Security ActMoney is appropriated by Congress through the Mutual Security Act to pay travel and other expenses of congressional committees for routine and special investigations. American-owned counterpart funds foreign assistance programsMembers traveling abroad are allowed to use American-owned counterpart funds. These are foreign currencies held by U.S. embassies and credited to the United States as part of various foreign assistance programs; they can be spent only in the country of origin. official entertainingAmerican Ambassadors overseas are allocated sums for official entertaining. These funds may be used for the same purpose by members of Congress when traveling overseas. various government agenciesMembers may use the funds of various government agencies when they speak on foreign policy issues at overseas posts. travel on military aircraftcargo planesMembers may travel on military aircraft, including cargo planes, at no charge.
Ethics in Government ActThe 1989 Ethics in Government Act set restrictions on foreign travel paid by lobbyists and other special interests. For both the House and Senate, special-interest paid foreign travel is limited to seven consecutive days, excluding the days spent traveling. Domestic travel funded by special-interest groups is limited to four consecutive days on the House side (including travel time), and three consecutive days on the Senate side (excluding travel time). One relative per trip also may accept special interest-paid travel expenses, and the ethics committee may grant an extension in exceptional circumstances. See also "Congressional International Travel: Data Since 1993 and Options for Congress," by R. Eric Petersen, Terrence L. Lisbeth, and Mabel Gracias, CRS Memorandum to Congress, February 26, 2010, from the Congressional Research Service (24-page PDF )Congressional International Travel: Data Since 1993 and Options for Congress
Outside Employment Income Outside Employment Income is generally limited to 15% of member pay. There are, however, certain prohibited categories: Members may not receive compensation for employment in real estate, insurance sales, the practice of law, the practice of medicine, or service as an officer or board member.
Perks from Lobbyists: events doesn’t have to come from the Member’s pocket can come from the usually deep campaign account, which usually contains money from lobbyists and their associated PACs.) Members of Congress are still able to use their lobbyist ties to get into events that regular people simply do not have access to. (For example, if a Member of Congress wanted a prime ticket to a sold-out event, he could still get that ticket from lobbyists he’s close with, as long as the face value of the ticket is reimbursed by the Member. However, this money doesn’t have to come from the Member’s pocket, but instead can come from the usually deep campaign account, which usually contains money from lobbyists and their associated PACs.)use their lobbyist ties
Health and life insurance, approximately 3/4 and 1/3 of whose costs, respectively, are subsidized by taxpayers.Health and life insurance, approximately 3/4 and 1/3 of whose costs, respectively, are subsidized by taxpayers.
This list is by no means exhaustive, and I encourage everyone to explore some of the additional perks Congress currently receives, but also examine what bonuses came with the job in previous years.
A cost-of-living-adjustment (COLA) increase takes effect annually unless Congress votes to not accept it. Members of Congress receive retirement and health benefits under the same plans available to other federal employees. They become vested after five years of full participation. retirementhealth benefits
"Members of Congress have the only job in the country whose occupants can set their own salary without regard to performance, profit, or economic climate," said Tom Schatz, president of the Council for Citizens Against Government Waste in a press release. "Clearly, members must think that money grows on trees.
57% of Congress are Millionaires Who are the wealthiest members of Congress? Here's a look.
U.S. Sen. Dianne Feinstein, a Democrat from California, reported a net worth of between $46 million and $108.1 million in 2010, according to financial disclosures. U.S. Sen. Dianne Feinstein #10 - U.S. Sen. Dianne Feinstein
U.S. Sen. Jay Rockefeller, a Democrat from West Virginia, reported a net worth of between $61.4 million and $136.2 million in 2010, according to financial disclosures.
U.S. Rep. Michael McCaul, a Republican from Texas, reported a net worth of between $73.7 million and $201.5 million in 2010, according to financial disclosures. Michael McCaul #8 - U.S. Rep. Michael McCaul
U.S. Rep. Vern Buchanan, a Republican from Florida, reported a net worth of as much as $366.2 million in 2010, according to financial disclosures. Vern Buchanan U.S. Rep. Vern Buchanan
U.S. Sen. Herb Kohl, a Democrat from Wisconsin, reported a net worth of between $89.4 million and $231.2 million in 2010, according to financial disclosures. Herb Kohl #6 - U.S. Sen. Herb Kohl
U.S. Rep. Jared Polis, a Democrat from Colorado, reported a net worth of between $36.7 million and $285.1 million in 2010, according to financial disclosures. - U.S. Rep. Jared Polis #5 - U.S. Rep. Jared Polis
U.S. Sen. Mark Warner, a Democrat from Virginia, reported a net worth of between $65.7 million and $283.1 million in 2010, according to financial disclosures. U.S. Senate Mark Warner #4 - U.S. Sen. Mark Warner
U.S. Sen. John Kerry, a Democrat from Massachusetts, reported a net worth of between $182.8 million and $294.9 million in 2010, according to financial disclosures. John Kerry #3 - U.S. Sen. John Kerry
U.S. Rep. Jane Harman, a Democrat from California, reported a net worth of between $151.5 million and $435.4 million in 2010, according to financial disclosures. Jane Harman #2 - U.S. Rep. Jane Harman
U.S. Rep. Darrell Issa, a Republican from California, reported a net worth of between $156.1 million and $451.1 million in 2010, according to financial disclosures. U.S. House Darrell #1 - U.S. Rep. Darrell Issa
So can the U.S. government continue to afford to shell out nearly half a trillion dollars to federal employees every single year? Of course not. The truth is that the U.S. government is flat broke and yet most of our politicians still seem extremely resistant to consider anything that would even slow down the wild spending that has been going on.the U.S. government is flat broke So what do we get for the $447 billion that we are spending on federal workers every single year?
Not a whole lot - unless you consider paperwork, bureaucracy and a gigantic pile of ridiculous regulations to be a good thing.ridiculous regulations "nanny state" America needs a fundamental shift in attitude. Instead of expecting a "nanny state" to take care of us, we should desperately try to reshape the federal government into a much smaller entity that will finally get off our backs. We have been living beyond our means for decades, and we cannot afford to pay for this bloated behemoth of a government for much longer.living beyond our means Hopefully Americans will wake up and do something about this nonsense before it is too late. Because right now the federal government has become an out of control monster that is gobbling up everything in sight. Read more: government-continue-to-afford-to-shell-out-nearly-half-a-trillion-dollars-to-federal-employees-every-single- year-13#ixzz1fi9mUbT8http://www.businessinsider.com/rich-congress-federal-employees #so-can-the-us- government-continue-to-afford-to-shell-out-nearly-half-a-trillion-dollars-to-federal-employees-every-single- year-13#ixzz1fi9mUbT8
Means Testing Means Testing has been proposed as a solution to America’s out- of-control entitlement spending. Under a means test, the government assesses the resources available to an individual — his income and assets, aside from the benefit payment in question. Example: Why should a billionaire like Michael Bloomberg have his health care heavily subsidized by overburdened taxpayers? However: Means-testing entitlement benefits could punish the very people who work the hardest and save the most, depressing economic activity and discouraging good behavior. Why then, can Means Testing not be applied to elected officials salaries and benefits?
Why is Congress a millionaires club?
Insider trading Insider trading is the trading of a corporation's stock or other securities (e.g. bonds or stock options) by individuals with potential access to non-public information about the company.corporation stocksecuritiesbondsstock options Illegal insider trading is believed to raise the cost of capital for securities issuers, thus decreasing overall economic growth
THROW THEM ALL OUTHow Politicians and Their Friends Get Rich Off Insider Stock Tips, Land Deals and Cronyism That Would Send the Rest of Us to Prison "THROW THEM ALL OUT: How Politicians and Their Friends Get Rich Off Insider Stock Tips, Land Deals and Cronyism That Would Send the Rest of Us to Prison" by Hoover Institution fellow Peter Schweizer hit bookshelves amid a firestorm of publicity on November 15, This accompanied a “60 Minutes” Segment on the same subject.
In the book, Peter Schweizer points out several examples of insider trading by members of Congress, including action taken by Spencer Bachus following a private, behind-the- doors meeting on the evening of September 18, 2008 when Hank Paulson and Ben Bernanke informed members of Congress about the imminent financial crisis, Bachus then shorted stocks the next morning and cashed in his profits within a week. [, Peter SchweizerSpencer BachusHank PaulsonBen Bernankefinancial crisis [ content/uploads/2010/05/Rep-Spencer- Bachus.jpg content/uploads/2008/09/hank-paulson.jpg humb/3/3f/Ben_Bernanke_official_portrait.jpg/22 0px-Ben_Bernanke_official_portrait.jpg
Congress: Trading stock on inside information? 60 MINUTES
In 2004, she was convicted of lying to investigators about a stock sale and served five months in a West Virginia federal prisonlying to investigatorsa stock saleWest Virginia Martha Stewart
Insider trading by members of Congress Members of CongressMembers of Congress are exempted from insider trading laws and thus can act on information they are bound to gain in the course of their congressional activities, although house rules  may consider it unethical. A 2004 study found that stock sales and purchases by Senators outperformed the market by 12.3% per year.  citation needed
SEC: Hill insiders can be prosecuted Sen. Joe Lieberman first mentioned that members of Congress are subject to insider trading. The Securities and Exchange Commission maintains that Congressional insider trading is illegal and that the agency has the authority to prosecute members of Congress.Securities and Exchange Commission “There is no reason why trading by Members of Congress or their staff members would be considered ‘exempt’ from the federal securities laws, including the insider trading prohibitions,” Robert Khuzami, the director of the SEC’s enforcement division, said in testimony provided to the Homeland Security and Government Affairs Committee. Read more: official_portrait_2.jpg/220px-Joe_Lieberman_official_portrait_2.jpg
H.R. 1148: Stop Trading on Congressional Knowledge Act 153 Co-Sponsors- 105 Democrats and 48 Republicans only 1 in WV- Shelley Moore Capito
House Speaker John Boehner, Ohio Republican, and House Minority Leader Nancy Pelosi, California Democrat, were among members of Congress profiled in the 60 Minutes piece that aired two weeks ago.profiled in the 60 Minutes piece Speaker Boehner responded: "Well I think having hearings is the right thing to do. As I’ve made clear, I’ve never been involved in the last decade or two in any day-to-day discussions about my stock trades. The ethics committee this week outlined for the members that the use of private information for their own financial benefit is against the rules of the House and outlined pretty clearly what those rules are." "In addition to that, I think the SEC has pretty clear rules. And so I think the hearings are a step in the right direction to determine if there’s a need for such a bill to act to move. We’ll let those hearings proceed." boehner-capitol-hill-insider-trading-hearin/
Pelosi Pelosi reportedly supports the legislation -STOCK act.(HR1148) “I’m sure they’ll come up with something that removes all doubt that this is something that is acceptable within the Congress, and when they do, to me it seems like it would fly through Congress.” As for the official language used in the eventual bill, Rep. Pelosi said, “I’m sure they’ll come up with something that removes all doubt that this is something that is acceptable within the Congress, and when they do, to me it seems like it would fly through Congress.” Rep. Pelosi said
only if the member not only personally trades on the basis of such information but also tips the information to "another person" with intent to aid that other person to use the information to trade for personal profit. Read literally, the bill prohibits insider trading by members of Congress only if the member not only personally trades on the basis of such information but also tips the information to "another person" with intent to aid that other person to use the information to trade for personal profit. Suppose, for example, a Member of Congress learns nonpublic information at a confidential closed door hearing. The Member uses that information to trade for personal profit. But he never assists "another person, directly or indirectly, to use the information to enter into, or offer to buy or sell the securities of such publicly traded company based on such information." Read literally, because it requires "the person" who is prohibited from insider trading to "assist another person," Gillibrand's version of the STOCK Act would not prohibit such trading. Worse yet, because Gillibrand's version of the STOCK Act requires "the person" who is prohibited from insider trading to "assist another person," it would not apply in the converse situation in which somebody gives a member of Congress information with intent to assist the member to trade!
Unfortunately, when it comes to policing their own ethics, all of Congress's errors seem to run in the same direction.
Tipster Sentenced in NYC Insider Trading Case By TOM HAYS Associated Press NEW YORK December 1, 2011 (AP) A Manhattan lawyer was sentenced to six months behind bars and two years of probation Wednesday after telling a judge he made a "profound mistake" by providing inside tips on confidential Wall Street deals. Brien Santarlas, 34, was charged in what federal prosecutors have billed as one of the largest insider trading cases in history. "I made a profound mistake when I engaged in insider trading," Santarlas said. "I'm ashamed. I'm embarrassed. I'm humiliated.... It's something I'll never forgive myself for." When first confronted by the FBI in 2009, Santarlas immediately agreed to wear a wire to record conversations with another corrupt lawyer in his firm — a decision the defense argued had earned him a probation-only sentence. U.S. District Judge Richard Sullivan agreed Santarlas deserved credit for his cooperation, saying it spared him a three-year term. But the judge said he needed to imprison the lawyer a short time to send the message to others in the same position, "You don't get a pass.“ #.TtnYxdVjWSo
“The fact is, America doesn’t trust you,” “The fact is, America doesn’t trust you,” Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, told the Senate panel. Stop Trading on Congressional Knowledge Act (HR1148) Stop Trading on Congressional Knowledge Act (HR1148) — would prohibit trades based on information that could come from private meetings, briefings and phone calls on the Hill. The bills also would dramatically change the financial disclosure process. The proposed legislation calls for members to report their trades within 90 days. Several senators pressed for the information to be disclosed in a searchable, online database — something government watchdogs have unsuccessfully sought for nearly a decade. Sloan and several panel members pushed for amendments to the bill that would require disclosure far more frequently — perhaps as often as every 10 days.
On the House side, Rep. Louise M. Slaughter (D-N.Y.) has attempted to pass the measure since 2006 but received little support before the “60 Minutes” segment. The House Financial Services Committee held its own hearing on the issue this past Tuesday.
Congress mulls trading ban on itself — as only Congress can. There are No laws that prevent lawmakers from trading stocks based on bills they are currently working on in Congress. two days When Congress decided to crack down on trading abuses by corporate executives, it determined that the disclosure window — which was 40 days at the time – was too long. The Sarbanes-Oxley law reduced it to two days. But when it comes time to crack down on itself, Congress can’t seem to muster the same zeal.
Using the same rules that apply to everyone else is a good place to start.
Accused, Spencer Bachus offers anti-‘insider’ bill 12/5/11 blind trusts run by independent managers. Rep. Spencer Bachus (R-Ala.) — in the midst of battling allegations of insider trading — has introduced legislation that would require members to place their assets in blind trusts run by independent managers. Rep. Spencer Bachus penalty of up to $50,000. The bill would require every member of Congress to place their stocks, bonds, commodities futures and securities in a blind trust while in office. The legislation states that if any member fails to comply, the attorney general could bring civil action against them and they could face a penalty of up to $50,000.bill Read more:
Lawmakers find insider trading ban popular in theory, problematic in practice 12/06/11 Lawmakers agree that members of Congress should not personally profit on private insider information. But deciding on how to block such a practice is proving to be much more divisive. Lawmakers convened at the House Financial Services Committee Tuesday to discuss how they could assure the public that members are not lining their pockets by trading on private information gleaned in the halls of Congress. But at the hearing, lawmakers were quick to point out problems with the proposal at hand, identifying loopholes or questioning how one could discern what trades were explicitly guided by private information.
Rep. Francisco “Quico” Canseco political witch hunts require federal regulators under the executive branch to investigate the legislative branch. Rep. Francisco “Quico” Canseco (R-Texas) called the bill a “completely unworkable solution to these allegations” that could incite “political witch hunts.” He also raised concerns that the bill, if made law, could raise sticky constitutional issues, in that it would require federal regulators under the executive branch to investigate the legislative branch. Congress.jpg/220px-Quico_Canseco,_official_portrait,_112th_Congress.jpg
Others suggested that regulators were not enforcing laws already on the books, making additional laws redundant. “Let’s make sure we’ve identified the right problem. The problem may be lax enforcement,” said Rep. Jeb Hensarling (R-Texas). “ There’s an area of ambiguity no matter what we do,” said Rep. Barney Frank (D-Mass.), the ranking member on the panel. “Redundancy is clearly preferable to ambiguity when it comes to passing laws.”
Further muddying the waters on the popular topic is the wide number of legislative fixes being proposed. In addition to the STOCK Act, Sens. Scott Brown (R-Mass.) and Kirsten Gillibrand (D-N.Y.) have both offered their own slightly differing takes on the same idea.
Meanwhile, House Financial Services Committee Chairman Spencer Bachus (R-Ala.) — who was singled out in the "60 Minutes" piece — has offered a bill requiring lawmakers to place their funds into a blind trust.singled out And Rep. Sean Duffy (R-Wis.) has offered a similar bill, but his would give lawmakers the option of a blind trust or disclosing any trades within three days of their completion.
Canseco is taking yet another approach, introducing a House resolution that is similar to Duffy’s bill but would put the onus of enforcement on the House Ethics Committee, not federal regulators.
Duffy pressed Slaughter and Walz on their bill, and argued that his tougher bill was the proper prescription. “My fear is that if we only take half a step … members could still skirt around the new bill. I think my bill goes the distance and makes sure there will be no doubt,” he said. To highlight his concern, he pointed out that trades would only need to be publicly disclosed if they exceeded $1,000. He argued that such disclosure could be easily avoided. “I could trade $50,000 in a stock if I keep every trade under $950,” he said. Walz said he would be open to adding more teeth to his bill, and argued that it was not beefed up at the outset to make the one-time overlooked bill more “palatable.” “It took six years to get seven people,” he said.
Eric Cantor smacks down 'insider' Spencer Bachus 12/8/11 “very blunt In a Wednesday meeting described by one source as “extremely direct” and by another as “very blunt,” Cantor (R-Va.) ripped into Bachus, explaining in no uncertain terms that it was unacceptable for Bachus to mark up the bill without having run it by GOP leaders and other chairmen with jurisdiction over its provisions. Read more:
The Alabama Republican, Bachus, abruptly canceled the vote, which was scheduled for next week. In canceling the planned committee vote, Bachus’s camp made no mention of the earful the he got from Cantor. “A large group of bipartisan members of the committee felt the legislation was flawed and being recklessly moved solely in response to media pressure,” Cantor spokesman Brad Dayspring said. “Members of both sides of the aisle wanted more time to gather information and develop appropriate alternatives.” The bill’s supporters are still hoping that public pressure will force Republican leaders to take it up. But if private pressure is any indication, Bachus is being pushed in the other direction.
From a regulator’s perspective, Robert Khuzami, the Securities and Exchange Commission’s (SEC) enforcement director, told the panel that existing insider trading laws do, in fact, apply to Congress. “You are subject to the same laws as everyone else,” he said. However, he added, using those laws to pursue charges against a federal lawmaker has never happened before, and any attempt could raise “some unique issues.” Passing a law like the STOCK Act could help ensure that if the SEC were to charge a member, a judge would determine that insider trading laws were violated by making it explicitly a violation. He also warned that lawmakers need to be careful to ensure that any law passed does not narrow the SEC’s reach in enforcing those laws, given the broad deference they currently have in identifying violations on a case-by-case basis.
Like everyone else, members of Congress are subject to current insider trading laws. However, some contend that current insider trading laws do not apply to nonpublic information about current or upcoming congressional activity, since members of Congress aren't technically obligated to keep that information confidential. So, for instance, if a lawmaker learns an upcoming bill will grant a company a large government contract, which could boost that company's stock, he or she is free to buy that stock ahead of the bill's public introduction.
“I would hope that it’s not as necessary as the whoop-de-doo over it makes it seem. But I do think that we all disclose what we do.” And Speaker of the House John Boehner’s comments yesterday seemed to leave open the question of whether such legislation is even needed. “ The hearings are a step in the right direction to determine whether there’s a need for such a bill to move. We’ll let those hearings proceed,” said Boehner. The hearings are a step in the right direction
First, First, political candidates and members of Congress should commit to placing their assets in a blind trust, says Schweizer. While many members of Congress do this voluntarily, most don’t. Whether through law or public pressure, says Schweizer, elected officials should reduce the appearance of a conflict of interest by establishing a blind trust. Second Second, Schweizer says the bill must protect the Security and Exchange Commission (SEC) from budgetary or personal retaliation by the Congress for investigating its members. Third, Third, an effective bill must prohibit members of Congress and their staffs from passing along private information to family members, friends, or associates that could aid them in making lucrative stock purchases. That, says Schweizer, is not clearly codified in the existing legislation under consideration. Finally Finally, members of Congress should be required to provide greater transparency about their investments by publicly posting their stock trades within 48 hours of making them. As the New York Post noted Tuesday, currently “ the bills contain lawyerly loopholes, including a 90-day grace period on reporting stock trades and a narrow limit on trading proscriptions, making them applicable only to ‘pending or prospective legislative action’ involving the issuer of the securities.” As the New York Post noted
Whether these provisions will make it in to the eventual legislation remains to be seen. However, with Congress’s approval ratings at all time lows, members may have a vested interest in passing a bill with real teeth, not a “toothless paper tiger,” says Schweizer. keep the pressure on their elected officials “We’re making real progress,” says Schweizer, “but citizens will need to keep the pressure on their elected officials to see to it that real reform becomes a reality.”