Tim Walz's proposed ban on Congress insider trading advancing quickly [VIDEO]

Categories: Politics
timwalzthumb.jpg
Tim Walz introduced the STOCK act in the House, and the bill is now moving quickly through Congress.
Tim Walz's bill to ban federal lawmakers from using inside information when managing their own financial portfolios is getting fast-tracked through Congress.

On Monday, by an overwhelming vote of 93-2, the Senate agreed to proceed with debate on the so-called STOCK act. The companion bill in the House has an astounding 253 co-sponsors.

The fact that Walz introduced a piece of legislation popular on both sides of the aisle could be a boon to his reelection chances. Two weeks ago, the Democratic Congressional Campaign Committee identified the Mankato Democrat as one of the 20 most vulnerable incumbents this year.

While the STOCK act has been kicked around Congress in one form or another for almost a decade, momentum to pass the legislation got a boost last November when a CBS 60 Minutes special built a persuasive case that prominent legislators on both sides of the aisle commonly rely on inside information to reap windfalls. Video of the CBS report is embedded at bottom.

Furthermore, a recent study by investment advisers at The Motley Fool shows that in the weeks prior to the signing of TARP in early October 2008, members of Congress made a total of 318 trades in financial companies, compared to 115 trades made in the same period a year prior. The 2008 trades amounted to $6.7 million in financial-company shares -- $5 million more than 2007.

The practice isn't technically illegal, but that would change if Walz's bill becomes law. President Obama, for his part, told lawmakers during the State of the Union to "send me a bill that bans insider trading by members of Congress. I will sign it tomorrow." It appears a bill of that sort will reach his desk before February is through.

In an interview with Daily Finance, Walz framed the need for the STOCK act as follows:
DC Capitol.jpg
Walz's bill would explicitly ban Congress members from using their non-public political expertise when buying or selling stock.
How do we know, if I know a highway bill is coming, that I'm not investing in asphalt equipment? That's the question that gets brought up here... Whether that is happening or not, the perception is just as damaging. It's exactly the same thing as if they were doing it, if the public believes they are. Perception is reality.
Walz shocked 12-year Republican incumbent Gil Gutknect in 2006, then won reelection in 2008 and '10. He now faces a strong November challenge from Minnesota Senator Mike Parry, R-Waseca, for his 1st district seat.

For Walz, whether support for the popular STOCK act bolsters his reelection chances remains to be seen. But either way, closing loopholes that allow Congress members to benefit from unfair financial practices is clearly good politics no matter which side of the aisle you're on.

Here's the compelling 60 Minutes report:

Sponsor Content

My Voice Nation Help
8 comments
Sparky
Sparky

Screw the STOCK act.  It's a spitball on the larger problem; Congress routinely exempts itself from all kinds of laws.  That's the practice that needs to be stopped, not this penny-ante stock trading crap.

Phoenix
Phoenix

Meanwhile, Republican Congresscritter John Kline of Minnesota's Second District has no clue (or is lying) when he says that a) it's illegal for him to do insider trading (uh, John, there's this guy called Tim Walz would could clue you in here...) and b) he hasn't gotten a pay raise in four years (uh, actually, John, you got two of them):

http://www.youtube.com/watch?v...

Kibble
Kibble

Next, Walz is going to author a bill banning the hatred of puppies.  It's an election year, after all.  Time to act like he's doing something.

ludwigtr
ludwigtr

Insider trading is already illegal, isn't it?  Isn't that what martha stewart went to jail for?I don't see what this is going to do, the people that are unethical enough to do it in the first place will just hide it better after this passes.  Nice sentiment though, I guess.

Carl Miller
Carl Miller

 The House and Senate Critters increase their own personal wealth year after year.  Please go research ALEC.......

Phoenix
Phoenix

This is a bill of Rep. Slaughter's that's languished since she first tried to get it passed in the Bush Administration.  The 60 Minutes piece finally provided the public outrage needed to pass it, and I'm glad Walz is helping her push it.

If you want to see what doing nothing (and/or knowing nothing) looks like, look at John Kline at his town hall on Monday spew bogosities about insider trading (he claims it's already illegal for congresscritters even though he knows his audience knows it's not) and congressional pay raises (he says he hasn't had one in four years -- actually, he's had two): http://youtu.be/xfwGJb-FjAc

atrupar
atrupar

You're right that it's already illegal, but nothing explicitly bans Congress members from using their non-public knowledge of pending legislation when managing their own financial portfolios. It's a weird loophole in the insider trading law. The 60 Minutes report explains it nicely.

Now Trending

Minnesota Concert Tickets

Around The Web

From the Vault

 

Loading...