Are Members of Congress using inside information gathered as part of their jobs to make financial investments (and get rich...er?) That question is at the heart of yesterday's 60 Minutes report. Reporter Steve Kroft accused current House Speaker John Boehner and former speakers Nancy Pelosi and Dennis Hastert, among others, of engaging in a legal form of insider trading. (We first broke the Hastert story in 2006.)  What the story didn't explore was how transparency aided Hoover Institution research fellow Peter Schweizer in drawing these connections, and how better transparency would deter problems from arising.

Schweizer's analysis drew upon congressional financial disclosure reports, one of many ethics-related documents that the House and Senate make available to the public. While all these documents should be available online, in real-time, and in machine-readable formats, most are not.* Usually, members of the public must physically travel to the House or Senate and print out ethics documents, one page at a time -- you will not be provided an electronic copy, no matter how much you ask,  even though the documents are already digitized. In fact, we compiled the first public list of all the "publicly-available" documents from the House and Senate, with information about how to obtain the reports and what they contain. We also called for the GAO to finally live up to its statutory obligation to review whether the personal financial disclosure forms should be updated.

Looking at the financial disclosure reports, only the House publishes them online; the Senate archaically requires you to go to the Senate in person to ask for this information. If you want to analyze the Senate's financial disclosure reports, you have to re-key the data into a computer by hand; there's no database to facilitate analysis. This is equally true if you want to see which Member or senior staffer has been promised a plum job by an outside company, foreign travel expense reports, legal defense fund contributions, and more. If you're not in Washington, you'd better be willing to book a plane ride to DC; otherwise, you're out of luck.

We won't know how much effort it took to make the connection between congressional activity and investing, which formed the basis of the 60 Minutes report and Schweizer's well-timed book "Throw Them All Out," but it likely was considerable. Without better data, it is hard to tell who actually benefited from trading on inside information. We also don't know the extent to which investors mine data from capitol hill about industry activities to help make investment decisions, and we can't know that until legislation like the STOCK Act (which we wrote about here) becomes law.

But what we do know is that the House and Senate can do much more to be transparent. They need to make it easier for the public to see who is trying to influence them, how they behave while in office, and the work that they're doing. That's why we are advocating for lobbying reform, ethics reform, and a lot more Sunlight on the process.

• Update 1: These documents are not available online from the House or Senate, but some third parties, such as the Center for Responsive Politics and Legistorm, have digitized many of the documents. However, it's not always possible to access the data in bulk, and it is possible that the third parties introduced errors in the digitization process.

• Update 2: I should also mention that Sunlight gave a grant to CRP for digitization of the personal financial disclosure forms, travel disclosures, and other documents in 2007.

It’s time to think big: The Super Congress situation is developing at an incredibly fast rate and we want to be able to respond as fast as possible -- both as an organization committed to greater government transparency and as citizens who live in a democracy.

Right now, the rules on the books say almost nothing about about how transparent this super committee’s process has to be. That means that a body of 12 members of Congress will get to operate totally above the reach of accountability (in the form of public meetings and financial and lobbying disclosure) to determine one of the most significant deals in American history: how to slice $1.5 trillion from the national debt.

We’ve written about this issue a few times (here and here, for example) and have even built a coalition of partners to support our five leading recommendations for committee openness, but now we want to hear from you.

Calls to congressional offices and district meetings with representatives are great ways to get our voices heard (and you may be hearing from us again about taking these actions), but what more can we do? America, we need to get riled up: The recommendations made by this committee will have a tangible impact our country and our lives. Now is the time to get creative.

Some (rough!) ideas we’ve thought up:

• Guerrilla theatre productions of Super Congress committee meetings in public spaces
• Asking folks to hold rallies in the districts of the 12 selected members of the committee
• Smoke machine flash mobs. (As in “smoke and mirrors” or the smokey backroom deals of lobbyists....Get it?)
• Asking business to hold their meetings outside.
• Get a congressional representative to write a “Dear Colleague” letter in support of opening the Super Congress. (Oh, wait, Reps Quigley and Renacci beat us to it.)

So, got any great ideas? Got any less-than-great-but-possibly-salvageable ideas? Brainstorm with us in the comments -- and be sure to like/up-vote the good ones, too!

For more updates on this campaign, join us at http://sunlightfoundation.com/opensupercongress.

Kudos to andymangold for the kicking image.

The Judicial Conference's ability to redact judicial financial disclosure reports will be extended indefinitely if Congress adopts H.R. 1059, which was approved today by the House Judiciary Committee.  The legislation's purpose is to ensure the "security of judges and other judicial employees from intimidation and threats," according to Committee Chairman Lamar Smith. Without legislative action, the provision allowing for the redaction of "personal and sensitive" information "to the extent necessary to protect the individual who filed the report or a family member of that individual" expires on December 31, 2011.

On its face, giving the courts permanent redaction ability is reasonable in this limited context, but may have an unintended consequence. The same paragraph that grants the ability to redact financial information also requires the Administrative Office of the Courts to submit an annual report on the use of this redaction power. The annual report allows the House and Senate Judiciary Committees to determine if the redaction authority is being used properly. It includes  the number and nature of the redactions, steps put in place to make sure litigants can still determine if there's a conflict of interest, and principles used to guide redaction authority. Without an expiration date, will Congress will prompted to pay attention the annual reports to ensure the redaction authority is used properly?

There is an obvious and elegant solution.The annual reports should be published online in one central location so that the public can act as a watchdog. The courts already publicly report on other aspects of judicial business, so why not this? (As far as we can tell, the reports themselves to not contain information affecting judicial security.)

We believe that this public disclosure for the annual reports make sense, but if Congress is going to update the financial disclosure provision of this law, the Ethics in Government Act, it should go further. The financial disclosure forms themselves should be available online, for all files (which include all three branches government), in one central location. Moreover, the provision of law permitting a fee to be charged for reproduction and mailing of these reports should be eliminated. And people wishing to access the reports should not be required to provide information about themselves. Finally, because maintaining documents already placed online is virtually costless, electronic versions of documents should be retained indefinitely.

HR 1059 presents the opportunity to make this disclosure law make sense in the electronic age.

Last week my colleague Bill Allison wrote about the new role of Virginia Thomas, the wife of Supreme Court Justice Clarence Thomas, as a lobbyist for her newly formed Liberty Consulting. This follows Thomas' role as the head of a post-Citizens United nonprofit known as Liberty Central. Allison noted that Virginia Thomas has left a "paperless, pixel-less" trail behind her:

The filing shows that, at least during its first two months, Liberty Central did not pay salaries to any of its officials, including Thomas, who is listed as the organization's president.

Liberty Central did not disclose any activity to the Federal Election Commission, which tracks the independent expenditures and electioneering communications of outside organizations, nor did it register as an independent expenditure committee--groups that, in the wake of the Citizens United ruling, can raise and spend unlimited funds attempting to influence federal elections as long as they do not coordinate with candidates.

Because federal election and lobbying disclosure laws explicitly state the kinds of activity that require disclosure, groups that have a political purpose can influence elections and lobby while avoiding disclosure.

Thomas' paper trail may not only be paperless and pixel-less, according to Slate's Dave Weigel it may also be needless. Weigel's contention is that Liberty Central, Thomas' Tea Party-inspired nonprofit, did little to nothing during the 2010 midterms. The lack of disclosure that Allison notes shows that Liberty Central did not engage in the same types of electoral activities as the other conservative groups that played hard in last fall's elections. Trusting Weigel's knowledge of internal conservative group advocacy, I'm going to believe his contention that Liberty Central did little grassroots organizing as well. It really doesn't look like Liberty Central did much of anything.

Why write about this? Weigel ends his post on Thomas with a question, "But what if she's not much of a conspirator? What if she's more of a dilettante?" What if she's more a dilettante, indeed!

If she is totally ineffective and a complete non-player in actual conservative politics, than I am inclined to conclude that she is playing her marriage to a Supreme Court justice to her financial advantage. And to what advantage do contributors to her "political" efforts seek?

This, I believe, is a serious question. Should a Supreme Court justice's spouse use their marriage as a way to gain donor support for political causes? What more should be disclosed to assuage the public's concern of a conflict of interest?

Considering that Clarence Thomas failed to report his wife's salary on his public financial disclosure for years, I find this issue to be in need of a serious response. In other cases, including that of Secretary of State Hillary Clinton, more disclosure than mandated was asked of a person appointed to office to assuage public concerns about conflicts of interest. This is one of those times.

Election season is in high gear, as you've no doubt noticed. With it comes the normal barrage of ads, phone calls, door knocks, and big pieces of glossy mail telling you who to vote for and why you should vote. Organizers and strategists on hundreds of campaigns across the country are frantically trying to figure out the best way, whether online or offline, to get you out to vote for their candidate. What they don’t tell you (or your potentially less politically aware friends and family) is who’s funding all of those campaign efforts to get you to vote, and who those candidates will be listening to after the polls close in eight days.

Introducing the Influence Explorer Postcard. If you’ve used Influence Explorer before, it’ll look pretty familiar. The Influence Explorer Postcard lets you choose which candidate to highlight and displays the top contributors and contributing industries to that candidate or candidates on a postcard. You can even opt to choose both candidates in a given race for side-by-side comparison. Then, from the comfort of your home computer, polish off your postcard with a personal note to a friend or family member that you want to clue in about who has the real influence is this election before your friends vote, preview the card and hit send. No post office visits or stamps required.

This is a cool way to make sure that at least one piece of mail your friends get over the next eight days amidst the flood of campaign messaging is meaningful and transparent. And if you’re snail-mail challenged like me, this is a great way to make an offline impact online.

Business note: sadly, direct mail isn't free. The cost of production for this postcard is $2.00, which you can pay using an Amazon account right from the site. If, like us, you’re excited about the ability to take your online impact offline, the opportunity to shine a light on the influence of money in politics to those who matter most to you, or you just like Sunlight and want to help us out, we ask that you chip in one extra dollar to help us hit our goal of 1,500 new small donors before the end of this year. (We’re currently at just over 500 thanks to the generosity of many of you who have given so far). Given the overwhelming amount of money being spent on the midterms this year, we hope an extra dollar isn’t too much to pay to help make this election just a little more transparent.

Check it out and let us know what you think in the comments.

This week's round-up highlights some major issues affecting state transparency from the East Coast to the Pacific. Here is a quick look at the topics that made news:

• Residents of Santa Ana City are concerned about the closed-door meetings held by their city council. CalAware Today reports here that these closed sessions critically prevent public comment.

• Incoming Honolulu city mayor, Peter Carlisle will have a tough challenge in attempting to enforce a citywide public disclosure of rail contracts. As Ian Lind of the iLind.net blogs, the city needs some help getting its transparent policies in line with its actions.

• Jennifer Pebbles of Texas Watch dog critiques public officials who use transparency as a weapon towards their opponents yet fail to be transparent themselves. She emphasized that transparency should be a genuine goal for all public officials.

• Fort Collins city council in Colorado is not using the public email account specifically set up to help residents access information about their council members. Amy Oliver Cooke of Colorado Spending Transparency considers the city’s lack of transparency in official communications.

• Still in Nevada, we discover how publicizing overpaid government employee information can be a way of promoting accountability in government. Eric Davis showed how the cities of Laughlin and Pahrump made the list of overpaid public employees. (Bell, California, anyone?) Transparent Nevada has more.

A September 21st news story in Roll Call reported that the Obama administration is “strongly considering limiting the ability of lobbyists to serve on federal advisory panels.” Specifically,

“the White House is likely to either tell agencies to ban lobbyists from the panels or to provide the agencies guidance . . . suggesting they avoid having lobbyists serve on the committees. Some sources said the effort to limit lobbyists’ participation would apply to all federal advisory bodies. . . .”

Were the administration considering such a move as a way to improve the reliability of advice issued by the committees, banning lobbyists would likely not achieve that goal. However, other measures may go a long way towards minimizing the appearance or occurrence of conflicts of interest. Here are some open questions.

Firstly, should federal law require all members of federal advisory committees to publicly file annual financial disclosure reports? Doing so may allow other members of the committee, government officials, and the general public to determine whether a committee member has a vested financial interest with respect to influencing recommendations made by the committee. It might also encourage the committee member making the filing to be mindful of potential conflicts.

Secondly, should federal law require all members of federal advisory committees to publicly file a conflict of interest form whenever a conflict is likely to occur? The form could describe the nature of the conflict, and be shared with other members of the committee as well as the public. For significant conflicts of interest, committee members could consider recusing themselves from voting on proceedings, if not from the entire deliberative process. The administration could create guidelines for when recusal is appropriate.

Thirdly, should there be regular audits of financial disclosure and conflict of interest filings to determine whether heretofore unidentified conflicts of interest exist, with the commensurate ability to impose appropriate remedial action when necessary? All filings could be maintained in real time in an online searchable database, with the audits also publicly available. In addition, GSA likely should implement rules to ensure that the documents are scrubbed of personally-sensitive information, such as home addresses, phone numbers, social security numbers, etc.

Although there may be some temptation to apply the financial disclosure or conflict of interest filing requirements to lobbyists only, in this context that doesn't make a lot of sense. It is likely that people who serve on advisory committees are those who are intensely interested in the issues that the committee addresses, and likely are engaging in related activities in their professional lives. Indeed, that nexus of involvement is exactly the point behind using federal advisory committees: they bring together people with diverse backgrounds to share their expertise in order to help the government craft better policies.

Consequently, removing lobbyists from the mix will likely remove a vital source of expertise for committees. Moreover, imposing disclosure requirements only on lobbyists, and not on everyone, doesn't make a lot of sense.

It is good that the administration is paying attention to federal advisory committees. It may be time to consider whether to update the Federal Advisory Committee Act in other respects. For example, FACA doesn't require that all committee minutes and other documents that are publicly available be also accessible to the public online. Additionally, the FACA online database needs serious upgrades.

For more information on FACA, see John's blogpost, this CRS report, and this backgrounder from GSA.

Update:

Thirty minutes after publishing the above post that explored questions surrounding whether it makes sense to ban lobbyists from serving on federal advisory committees, White House Ethics Counsel Norm Eisen wrote on the White House blog that “it is our aspiration that federally-registered lobbyists not be appointed to agency advisory boards and commissions.”

We recognize that there are many registered lobbyists who currently serve on these committees as a result of a prior appointment. When these appointments expire, it is our hope that agencies not reappoint anyone who is currently registered as a federal lobbyist at the time of their potential reappointment.

In the blogpost, the White House has indicated that it will make "adjustments" to the policy as appropriate to assure "all interested parties that their voices will be appropriately heard in the process." It will be interesting to see whether they allow waivers for lobbyists in certain instances.

As required by the Honest Leadership and Open Government Act, the Clerk of the House launched an online database for current personal financical disclosures. The site only hosts PDF copies of these reports and is only searchable by member, not by anything they list on the reports. (I also had difficulty loading the PDF in the most recent version of Adobe Acrobat.) Kudos to the House for moving towards much greater transparency!

If you want to see how this information can be displayed in a more user-friendly and compelling way, check out the Open Secrets Financial Disclosure database.

So, the indictment is in and the charges against Sen. Ted Stevens include seven counts of making false statements on his personal financial disclosure forms from 1999-2006. Many of these false statement counts revolve around work done on Stevens' Girdwood, AK home courtesy of the VECO oil company. Sunlight's Bill Allison makes the case at Real Time Investigations that if the money spent on equipment, parts, and labor did not constitute a gift, but rather a loan, then Stevens would be allowed to omit them from his disclosure forms, thereby acquitting him of several false statement charges:

[F]rom my quick read of the indictment, it appears that the government is suggesting that when Stevens says he has no liabilities of more than $10,000, that means the hundreds of thousands of dollars Stevens is alleged to have received as benefits from VECO couldn’t possibly have been loans. But if (and for the record, I doubt this is likely), if Stevens was borrowing money, labor and materials to renovate a residence from VECO rather than accepting it as a gift, I’m not sure Stevens would have to report it under current personal financial disclosure rules, which say,

property which is held or maintained solely for recreational or personal purposes does not have to be reported…. (p. 131)

and

Mortgages secured by a personal residence (including secondary residences) that are not used for rental purposes do not have to be disclosed. (p. 136)

Suppose there was some understanding Stevens would repay Veco or its CEO, Bill Allen, for the home repairs, the car swap, the furniture and so on — shouldn’t the public know of those potential conflicts of interest? The indictment reminds us,

The primary purpose of the yearly Financial Disclosure Forms is to disclose, monitor and deter conflicts of interest, thereby maintaining public confidence in the integrity of the United States Senate and its Members. Because the yearly Financial Disclosure Forms require public disclosure of financial information by each Member of the United States Senate, such as income, assets, gifts, financial interests, and liabilities, the Forms provide the public at large, including the voters of a particular state, with the information necessary to allow the public to evaluate and consider official conduct by a Member of the United States Senate in light of that Member’s private finances.

Do the current disclosure requirements adequately “deter conflicts of interest, thereby maintaining public confidence in the integrity of the United States Senate and its Members,” if they exempt personal residences, mortgages, car loans and so on from public view?

As Bill says, it is highly unlikely that these were loans and not gifts. One would have to assume that the cooperating witness identified in the indictment, VECO CEO Bill Allen, provided enough information to prove that there was no intention of repayment. Also, as I previously noted in the previous blog post, paragraph 17 of the indictment suggests (although the DOJ insistently declared that it does not allege) a possibility of quid pro quo:

17. It was a part of the scheme that STEVENS, while during that same time period that he was concealing his continuing receipt of things of value from ALLEN and VECO from 1999 to 2006, received and accepted solicitations for multiple official actions from ALLEN and other VECO employees, and knowing that STEVENS could and did use his official position and his office on behalf of VECO during that same time period. These solicitations for official action, some of which were made directly to STEVENS, included the following topics: (a) funding requests and other assistance with certain international VECO projects and partnerships, including those in Pakistan and Russia; (b) requests for multiple federal grants and contracts to benefit VECO, its subsidiaries, and its business partners, including grants from the National Science Foundation to a VECO subsidiary; and (c) assistance on both federal and state issues in connection with the effort to construct a natural gas pipeline from Alaska’s North Slope Region.

There is likely more information yet to be revealed, as the DOJ stated the investigation is ongoing, that would prove that these gifts and not loans.

Returning to Bill's chief point, there is a clear loop hole exposed in the system of conflict of interest disclosure. The personal financial disclosure documents are important in the revelation of conflicts of interest and ought to reveal all conflicts that lawmakers hold. In recent months and weeks, the number of stories highlighting conflicts that arise from the ownership of personal homes is putting a spotlight on the need for greater disclosure.

Sens. Chris Dodd and Kent Conrad received favorable mortgages on homes from Countrywide. Only Conrad disclosed his mortgage and home on his personal financial disclosure form. Rep. Laura Richardson defaulted on numerous mortgages which should have been disclosed but were not. And today it was reported that Rep. Joe Knollenberg undervalued his D.C. residence on more than one financial disclosure.

After considering these cases, most egregiously the case of Sen. Stevens, I'll let you comment on Bill's final question:

Do the current disclosure requirements adequately “deter conflicts of interest, thereby maintaining public confidence in the integrity of the United States Senate and its Members,” if they exempt personal residences, mortgages, car loans and so on from public view?

Last month, after Portfolio revealed that Sens. Chris Dodd and Kent Conrad received favorable loan deals from mortgage giant Countrywide, members of the Senate Ethics Committee attempted to attach an amendment to housing relief legislation that would require the disclosure of mortgages and their details for members of Congress in their annual personal financial disclosure reports. The amendment was ruled non-germane and was dropped from consideration.

In the House, Rep. Mark Souder is keeping the disclosure flame alive, introducing a bill to require mortgage disclosure on personal financial disclosure reports. Souder's bill would mandate the disclosure of home mortgages including the name of the creditor, the interest rate on payments, the number of years remaining, and the amount of the mortgage.

This is a good step in providing more detailed and accurate information on personal financial disclosure reports, and certainly a proper response to the Countrywide revelations. Congress should take this issue seriously and aim to adopt the transparency reforms in Souder's bill.

For further steps on clarifying and furthering disclosure in personal financial disclosures, you can see Ellen Miller's Op-Ed in Roll Call (no subscription needed this time) from a few weeks ago.