March 17, 2016
Shine a Light on Secret Industry That Uses Congressional Sources for Stock Trading Tips, Groups Say
Groups Support Reps. Slaughter, Duncan, Walz Bipartisan ‘Political Intelligence Transparency Act’
WASHINGTON, D.C. – Congress should support legislation that would shine a light on the activities of Wall Street consultants and lobbyists who use congressional sources to gain valuable information they can use to profit on the stock market, 10 groups, including one asset management firm, said in a letter (PDF) sent today to Congress.
The coalition strongly supports the “Political Intelligence Transparency Act,” a bipartisan transparency measure that was introduced today in the U.S. House of Representatives during Sunshine Week – a week highlighting the need for government transparency.
The Political Intelligence Transparency Act would require political intelligence consultants to register under the Lobbying Disclosure Act and disclose their clients, income and activities. The bill is sponsored by U.S. Reps. Louise Slaughter (D-N.Y.), John Duncan, Jr. (R-Tenn.) and Tim Walz (D-Minn.).
The little-known political intelligence industry consists of an estimated 2,000 Wall Street operatives and lobbyists who roam the halls of Congress and executive agencies for stock trading information that they sell to clients. It is estimated that the sale of the information generates between $100 million and $400 million annually, but as the groups noted in their letter, “no one knows for sure, since political intelligence activities are not disclosed either to the public or to Congress.”
The coalition supporting this transparency legislation includes Public Citizen along with American Family Voices, Campaign for Accountability, Center for Media and Democracy, Citizens for Responsibility and Ethics in Washington (CREW), Common Cause, Government Accountability Project, New Progressive Alliance, Sunlight Foundation and Zevin Asset Management, LLC.
The letter explains that “Congress overwhelmingly approved the bipartisan ‘Stop Trading on Congressional Knowledge’ (STOCK) Act in 2012, making it clear for the first time that the laws against insider trading apply to Congress as well as the public.” But one key provision was omitted: a requirement that private-sector financial operatives and lobbyists who make a business trading on information gleaned from congressional sources disclose their activities and clients to the public.
Today’s political intelligence transparency legislation would fill the gap and require the same kind of disclosures now required by the private sector when it taps into publicly available government sources for stock trading information. The coalition letter makes it clear that the legislation “does not prohibit such activity as long as it is done legally and above board.”
“We strongly urge Congress to support the bipartisan ‘Political Intelligence Transparency Act’ with the same enthusiasm in which Congress embraced the STOCK Act,” the letter concludes.