WASHINGTON — Congress is rushing to make it absolutely clear to everyone that its members are banned from insider stock trading, hoping to improve their sagging image that has approval ratings at historic lows.
Senators made the first move Monday. Their 93-2 procedural vote cleared the way for Senate passage — possibly later this week — of a bill that would require disclosure of stock transactions within 30 days and explicitly prohibit members of Congress from initiating trades based on non-public information they acquired in their official capacity. The legislation, at least partly symbolic in nature, is aimed at answering critics who say lawmakers profit from businesses where they have special knowledge.
U.S. lawmakers already are subject to the same penalties as other investors who use non-public information to enrich themselves, though no member of Congress in recent memory has been charged with insider trading. In 2005, the Securities and Exchange Commission and Justice Department investigated then-Senate Majority Leader Bill Frist’s sale of stock in his family’s hospital company, but no charges were ever brought against the Tennessee Republican.
Voters may believe lawmakers paid an annual salary of $174,000 are enriching themselves by making investments based on what they learn in Congress. A recent segment of CBS’ “60 Minutes” in November questioned trades by a House committee chairman, the current speaker and his predecessor’s husband. Speaker John Boehner, former Speaker Nancy Pelosi and Rep. Spencer Bachus, R-Ala., all denied wrongdoing. Bachus chairs the Financial Services Committee.
“Members of Congress are not above the law,” Senate Majority Leader Harry Reid said before Monday’s test vote. “We must play by the same rules every other American plays by.” He said the bill “will clear up any perception that it’s acceptable for members of Congress to profit from insider trading.”