We urge Congress to resume the legislative effort to shine a light on the activities of Wall Street consultants and lobbyists who lurk on Capitol Hill seeking valuable information they can use to cash in on the stock market. Today, the Government Accountability Office issued its long-awaited report on how this “political intelligence” industry operates in the shadows for the benefit of itself and its paying clients.
When Congress approved the “Stop Trading on Congressional Knowledge” (STOCK) Act last year, making it clear for the first time that the laws against insider trading apply to Congress as well as the public, one key provision was left on the cutting room floor: a requirement that financial operatives and lobbyists who make a business trading on information gleaned from congressional sources disclose their activities and clients to the public.
At the time of the law’s passage, many in Congress seemed unclear about what the political intelligence industry is and how it operates. So Congress replaced the political-intel disclosure provision with a mandate for a congressional study on whether there is a problem.
That mandated study became public today, and it shows that there is indeed a problem. The political intelligence industry is flourishing, enriching itself and clients in the stock market, yet the report notes that it could not document who these people are or how much they profit. Without full transparency of the activity of these political intelligence consultants and their clients, it is nearly impossible to know if they are trading on illegal insider information.
We expect U.S. Sen. Charles Grassley (R-Iowa) and Reps. Louise Slaughter (D-N.Y.) and Tim Walz (D-Minn.) to reintroduce their legislation to open the books on the political-intel industry soon in reaction to the study. It is long overdue and is a political battle we look forward to resuming.
Craig Holman is the government affairs lobbyist for Public Citizen’s Congress Watch division.