Follow Us

Epic Failure by the Senate on Transparency Provisions in STOCK Act

by

With little fanfare and even less disclosure, the Senate late yesterday passed a bill that will, if signed into law, gut the STOCK Act, a transparency measure enacted only a year ago.

The STOCK Act’s history has been one of knee-jerk reactions rather than reasoned decision-making. Yesterday’s vote proved no different, with Senators overreacting and taking a hatchet to the law when a scalpel would do.

The bill enacted last year would require already public financial disclosures of senior congressional and executive branch officials to be put online in order to prevent or root out insider trading. There were concerns that some provisions of the bill were overbroad and would put some government employees at risk. Rather than craft narrow exemptions, or even delay implementation until proper protections could be created, the Senate decided instead to exclude legislative and executive staffers from the online disclosure requirements.

The sweeping exemption goes even farther than critics of the disclosure requirements requested. For those to whom online disclosure would still apply (the president, vice president, members of Congress, congressional candidates and individuals subject to Senate confirmation) the Senate bill made electronic filing of the information optional and struck the requirement that online information be searchable, sortable and downloadable, making even the disclosures that remain in the bill tepid and relatively unusable.

Not only does the change undermine the intent of the original bill to ensure government insiders are not profiting from non-public information (if anyone thinks high level congressional staffers don’t have as much or more insider information than their bosses, they should spend some time on Capitol Hill) but it sets an extraordinarily dangerous precedent suggesting that any risks stem not from information being public but from public information being online.

Are we going to return to the days when the public can use the Internet to research everything except what their government is doing? Will Congress, in its twisted wisdom, decide that information is public if journalists, academics, advocates and citizens are forced to dig through file cabinets in basements in Washington, DC to find it? And does anyone think that makes us safer?

As my colleague Tom Lee noted, “This approach is known as ‘security through obscurity.’ Essentially, the idea is that rather than fixing a system's flaws, you can just make the system opaque or unusable or unpopular enough that those flaws never surface.” It doesn’t make anyone any safer. If a criminal wants the public information badly enough, he will jump through whatever hurdles are created in order to get it. That’s why last October we advocated that Congress take the months remaining before the bill was to go into effect to carve out exceptions for individuals in sensitive jobs. That would actually make them safer than hoping that no one would bother to look for the information if it is on paper instead of online.

Security through obscurity as a justification to repeal the transparency provisions of the STOCK Act starts us down a slippery slope where any government action or information could be taken offline in the name of safety. Campaign contributions made public on the FEC’s website? Take them offline. Lobbyist disclosure reports made public on the sites of the Clerk of the House and the Secretary of the Senate? Put them in file cabinets. Congressional hearings webcast by Committees? Take the cameras out of the room.

It is possible that the Senate’s overreaction could have been avoided if anyone had the chance to read the bill. According to Roll Call, “neither the Senate Homeland Security and Governmental Affairs Committee nor its House counterpart seemed to have specifics on what was in the works, a further indication that the matter was being handled at the leadership level in each chamber.” The bill, S. 716, was voted on by unanimous consent last night shortly after it was introduced by Senator Reid, and apparently after many members went home for the weekend. The bill was not available to the public on the Library of Congress website until after the vote.

It would be nice to think that the House, always more tech savvy than the Senate, would be less willing to throw the baby out with the bathwater and seek a more nuanced solution. But odds are that body too will take a vote in favor of obscurity, probably today. The result: More corruption and less trust in government.