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STOCK Act Sausage Making

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If ever there were an example of knee-jerk legislating, the STOCK Act may be it. A thoughtful and comprehensive bill, introduced by Rep. Slaughter, languished for years until some bad publicity made Members of Congress decide to “take action.” But in their haste to demonstrate they were responsive to the public’s outcry over allegations of congressional insider trading, Congress passed a watered down version of the bill. Furthermore, since passing the STOCK Act, Congress has twice acted to delay implementation of the bill, citing the risk of unintended consequences of the transparency measures they enacted.

The hurry up and wait method of legislating leaves one to wonder what will be disclosed when the sausage making is complete.

At issue is a provision that requires certain executive branch officials to put their financial information online. Information about Members of Congress’ finances is already available. Good thing too, as the Washington Post just completed a study finding that 73 lawmakers benefitted or could have benefited financially from legislation they sponsored. Also online is financial information about the president, vice president, Cabinet members and Senate-confirmed political appointees. So how are the executive branch employees different? Like Members of Congress, they too may be privy to insider information that may benefit them financially. However, a lawsuit filed by the ACLU as well as complaints lodged by federal employees’ labor unions allege that putting financial disclosures online puts national security and the employees’ privacy at risk.

As a response, Congress amended the STOCK Act on August 2, delaying implementation from August 31 to September 30. (That amendment also clarified an inconsistency in the interpretation of the original bill, ensuring that disclosure requirements apply to the spouses and dependent children in both houses of Congress. Prior to the amendment, the disclosure provisions would have been limited to Senate spouses and children only.)

During the intervening month, Congress failed to come up with a resolution that would satisfy the bill’s purpose of preventing corruption while perhaps exempting those in sensitive or national security positions. Instead, days before the Sept. 30 deadline, Congress passed legislation that would delay implementation until December 8.

But don’t hold your breath that Congress will have developed a fix by then. The September amendment also requires the National Academy of Public Administration to examine the potential for harm if the disclosures are adopted. The study is not expected until 2013. Waiting for the study provides Congress with a perfect excuse to continue to delay implementation.

When Congress does finally decide to resolve the issue of federal employees’ disclosures--and we hope it is sooner rather than later--it is vital that they remember such disclosures are already required, and already public, albeit in paper format. Indeed, there is nothing to prevent a third party from posting the information online.

Congress should take the opportunity provided by the delay to carve out minimal exceptions for those employees in sensitive job categories and, for the rest, to recognize that in this day and age, public means online. At the same time, Congress should make clear that it expects other players in the ethics arena to pull their weight. The Office of Government Ethics, whose mission it is to “strengthen the public’s confidence that the Government’s business is conducted with impartiality and integrity” has been largely silent in this debate. Likewise, GAO has failed to meet its statutory obligation to review the personal financial disclosure system to ensure it is fostering accountability. Both OGE and GAO should be urged to ensure that financial disclosures serve the public interest.

The public has the right to know executive branch employees are not reaping financial benefits from insider information. Comprehensive financial disclosures--with reasonable accommodations for security--must be updated to ensure they are online and enforced.