I really want to offer a tip of the hat to Business Insider for uncovering a story this week that should really have Americans up in arms in a bipartisan fashion. When I learned about it last night, I felt both frustrated and disappointed. The report deals with the STOCK Act, a law signed by President Obama back in 2012. The acronym stands for the Stop Trading on Congressional Knowledge Act and it’s intended to prevent members of the House and the Senate, as well as their staffers, from using knowledge of impending congressional actions that might impact the fortunes of publicly traded companies to profit by trading in those companies’ stocks. Part of the law requires that members file annual reports of all of their stock trades, with financial penalties being imposed on anyone who is late with their filings. But as Insider discovered, many members have regularly been late with their filings and there is no publicly available record of such infractions or any fines imposed as a result.
Congress has a spotty and inconsistent method for collecting fines from members and top staffers who break a federal law designed to stop insider trading and conflicts of interest, an Insider investigation found.
Insider’s investigation of financial disclosures found that 49 members of Congress and at least 182 of the highest-paid Capitol Hill staffers were late in filing their stock trades during 2020 and 2021.
Lawmakers and senior congressional staffers who blow past the deadlines established by the 2012 Stop Trading on Congressional Knowledge Act are supposed to pay a late fee of $200 the first time. Increasingly higher fines follow if they continue to be late — potentially costing tens of thousands of dollars in extreme cases.
So in just the past two years, there have been hundreds of people in Washington who were either late in filing their stock trading records or failed to report the information at all. And yet congressional ethics office staffers would not even confirm for reporters whether a ledger recording all of these violations and the fines being levied even exists, to say nothing of making such records publicly available. When Insider asked all of the lawmakers who appeared to be in violation to confirm their status and report any fines that had been paid, nineteen of them refused to even answer and another ten said they had paid fines, but declined to provide any receipts proving they had paid.
This situation is preposterous. The people in charge of imposing regulations or fines on companies shouldn’t be able to ditch their stocks before the information becomes public. Similarly, the lawmakers involved in awarding fat government contracts to corporations should not be allowed to scurry out and buy up those stocks before they rise dramatically. This is one of the most egregious examples of insider trading that can take place.
So in 2012 we actually managed to pass a law ensuring full transparency in such matters, which was great. But now we find out that the records related to that transparency law are shrouded in secrecy if they even exist at all? It’s a classic case of adding insult to injury.
I realize that this may not sound like the biggest deal in the world at the moment, particularly when we’re already dealing with the pandemic, staggering inflation, the Biden border crisis, and foreign policy disasters too numerous to mention. But STOCK Act violations get down to the most fundamental level of how much trust we can actually place in the people we elect to represent us and their staff members. I plan on calling both of my senators and my congresswoman this week. I would like to respectfully request that you do the same. Ask them if they are in compliance with that law and if they support making all records associated with it public. If they say no to either, you should probably start shopping for a primary opponent because some of these people clearly can’t be trusted.