As the STOCK Act keeps marching through the Senate, on the heels of a State of the Union push from the President, and after a CBS news expose ignited interest in a longstanding proposal from Rep. Slaughter in the House, that Sunlight has supported.

We've been very involved in reviewing and suggesting changes to the draft bills, and here's a summary of our advice:

1. First, Sunlight is very supportive of the STOCK Act. This fall's expose made a convincing case that insider trading is a real problem, and that Members sometimes put personal financial profit over their official responsibilities.

2. Perhaps even more significant is the threat to public confidence in government posed by this phenomenon -- the public loathes insider trading, especially from Members of Congress.

3. Whether insider trading was technically illegal, recent hearings have made clear that no one was capable (or willing) to fully oversee the issue.

4. The Personal Financial Disclosure system, resulting from the post-Watergate 1978 Ethics in Government Act, is long, long overdue for serious examination and oversight. It may be the envy of much of the rest of the world, and serves as a model for accountable disclosure in other governments, but still suffers from a sort of inter-branch detente, where no one wants to legislatively reopen the complex issues involved in requiring personal finances to be disclosed. If the US is to lead on accountability systems, we should lead on maintaining and strengthening them, too. GAO and others should review the pfd system more broadly, and outside the narrow view of an insider trading scandal.(More on this from GAO to come soon.)

On to the bill text

1. We had significant concerns about earlier drafts of the bill, since overbroad language ran the risk of criminalizing leaks. Those concerns have been dealt with in more recent drafts. Either the Rules changing language has been watered down and turned into a requirement that the Ethics committee create appropriate prohibitions, or the language has been modified by adding "intent" to the kind of information sharing that is prohibited. In either case, sharing information is very unlikely to get accidentally criminalized.

2. On enforcing information sharing restrictions, though, the later drafts have significantly weakened the text of the bill, where "personal gain" is a pretty narrow standard, and the Ethics committee is unlikely to be the most reliable source of strong public interest standards. There's a difficult balance to strike here, between Speech or Debate clause issues (where the Executive is Constitutionally barred from meddling in inherently legislative tasks) and potential unintended consequences, the bill's enforcement mechanisms are tricky.  We have a strong preference towards Rules changes over executive branch enforcement, but have little experience in financial investigations, so have little advice on crafting the final shape of the mechanisms.

3. Sunlight has been pushing for stronger disclosure of both the a) personal financial disclosure forms and b) the new financial transaction reports (to be reported when Members move their money). Both categories of information should be required to be public, should be shared as soon as they are filed, and should be filed electronically.  Additionally, we have detailed advice about how such electronic filings systems should be designed, to capture as much information as possible, and to add useful structured data at the time of information collection. (Daniel will have more on this topic soon.)  The information should be available in bulk, and no login should be required at all to dowload the data.  (That's a ridiculous requirement contained in the most recent Senate draft.)

4. None of these forms should be destroyed after 6 years. The House and Senate can afford to preserve a two foot tall stack of paper (in the worst case), and can certainly afford to make a digital copy of information perpetually available, especially when it's as politically and historically significant as these disclosures will be.  This information should be maintained online in perpituity, and also regularly transferred to NARA's Center for Legislative Archives for safekeeping.

5. Sunlight supported the LDA reforms aimed at political intelligence firms, and also understands why the recent drafts suggest a GAO report on their function -- they're somewhat poorly understood.  For our thoughts on elite, commercial services that republish congressional information, see this post. The key point: insofar as these services are worth the price of admission, they reinforce disparities in privilege and access.

Those are our main points on the STOCK Act.  We've got other technical corrections and suggestions, and would be happy to talk to anyone looking for help or thoughts as the legislation moves. We're also happy to see this one piece of legislation pulling along other important reform issues that have languished -- from e-filing in the Senate (more on that soon) to honest services, and even a 72 hour rule in the Senate (where did that come from, Senator Coburn?). Maybe the Senate should have an open amendment process on a reform oriented bill once a quarter.

Update: There's one more provision we've strongly opposed that I should make note of: there's no justification for requiring logins in order to access dowloads of Senate data, as the latest draft requires.  That provision should be removed.  It's wasteful, and discourages reuse. If Data.gov can offer bulk downloads with no login requirement, so can the US Senate.

Today, Sunlight is sending the following letter (see below) to the Government Accountability Office, or GAO.

We are urging them to review the personal financial disclosure system, that requires top officials throughout the federal government to publicly disclose their assets. A comprehensive GAO review is important to ensuring the effectiveness of our system, is long overdue, and is actually already required by law.

For those unfamiliar, this may seem to be an abstract or wonky subject.  But if you've news stories about Justice Thomas, or Rep. Rangel (or many, many others) then you've heard about the importance of financial disclosure. Our laws requiring our top officials to publicly declare their assets are an essential safeguard against corruption and conflicts of interest, and are a bulwark for accountability in government service.

The GAO should review our financial disclosure system, and help strengthen an essential democratic safeguard.

GAO Financial Disclosure Letter 10132011

Tomorrow morning I will be testifying before the full House Oversight and Government Reform Committee about the Sunlight Foundation's work to liberate federal spending data and experience in developing databases and tools for tracking spending. The hearing, entitled "Achieving Transparency and Accountability in Federal Spending," will be the second opportunity for me to discuss the Sunlight Foundation's Clearspending report where we identified nearly $1.3 trillion in misreported federal spending. The two hour hearing should be live-streamed on the committee website and will start at 9:30 am in Rayburn 2154.

It is an exciting time to continue this important conversation as just today there were two new federal spending developments. The House Oversight Chair Darrell Issa (R-CA) introduced a major piece of transparency legislation that would transform how we track federal spending and identify waste, fraud and abuse. You can read more about the bill from a blog post by Daniel Schuman, Sunlight's policy counsel. The White House also issued an executive order today that will put Vice President Biden in charge of an 11-member oversight board — very similar to the Recovery and Accountability Transparency Board — to address federal agency waste and fraud.

The entirety of my remarks appear below:

6-14-11 - Written Testimony of Ellen Miller before the Committee on House Oversight and Government Reform

This morning the Sunlight Foundation's award winning Sunlight Live platform will turn the spotlight on the Committee on Natural Resources' hearing on gas prices and U.S. jobs. Sunlight Live mashes up commentary and research from Sunlight's Reporting team with contextual data and graphics.

The hearing comes as gas prices approach $4 a gallon and amidst increasing pressure for more domestic oil drilling. Meanwhile, there is renewed attention to nuclear energy, thanks to the recent disaster in Japan. The full House Natural Resources will convene for the hearing as witnesses from the U.S. Energy Information Administration, U.S. Geological Survey, CRS, GAO, as well as the University of Texas and Center for Strategic and International Studies present testimony.

Members of the Natural Resources Committee have benefited from contributions from the oil and gas industry. According to Sunlight’s Influence Explorer, Committee Chairman Doc Hastings (R-WA) received $85,671 from the oil and gas industry in 2010, Ranking Member Edward Markey (D-MA) received $29,250 and committee member Rep. Dan Boren (R-OK) tops the list at $210,500.

• Richard G. Newell; Administrator, U.S. Energy Information Administration
• Brenda Pierce; Energy Resources Program Coordinator, U.S. Geological Survey
• Gene Whitney; Manager, Energy Research, Congressional Research Service
• Michelle Michot Foss; Chief Energy Economist, University of Texas
• Guy Caruso; Senior Adviser, Energy and National Security, Center for Strategic and International Studies
• Frank Rusco; Director, Natural Resources and Environment, Government Accountability Office

This morning I testified before the House Committee on Oversight and Government Reform's Subcommittee on Technology and Information Policy about the failures of government to make rhetoric meet reality. The Sunlight Foundation has been excited about the new promises of data transparency, but sometimes the results are nowhere near the accuracy and completeness necessary for the data to be useful for the public.

Sunlight's Clearspending analysis found that nearly $1.3 trillion of federal spending as reported on USASpending.gov was inaccurate. While there have been some improvements, little to no progress has been made to address the fundamental flaws in the data quality. Correcting the very complicated system of federal reporting for government spending is an enormous task. It has to be done because without it there is no hope for accountability.

In order to fulfill the promise of the Open Government Directive and move forward to meaningful spending disclosure I offered a number of recommendations to the committee. These include unique identifiers for government contracts and grants, publicly available hierarchical identifiers for recipients to follow interconnected entities and timely bulk access to all data.

A video of the hearing should be available shortly on the committee's website and the entirety of my remarks appear below:

Written Testimony of Ellen Miller before the Committee on House Oversight and Government Reform

An article in Monday’s New York Times announced that Bloomberg LP is expanding their DC publishing work, and investing heavily in their “Bloomberg Government” service. This commercial service takes their established financial information reporting model and applies it to government information, charging $5700 per year for access. Collecting, analyzing, and re-presenting government information so comprehensively is expensive, and the price tag reflects that challenge.

This pricetag also represents the enormous demand for influence over the government. Even though most people can’t afford subscriptions that cost thousands of dollars a year, some information is extraordinarily valuable. The slightest advantage in anticipating a pending regulation or a legislative markup can mean billions of dollars later. The same notion launched the original Bloomberg Terminal service for finance information, which is now standard fare for many finance professionals, and costs (apparently) $1,500 per month.

Insofar as these services are worth the price of admission, they reinforce disparities in privilege and access.

Even though collecting information comprehensively from the government is onerous, securing access to it worth the expense for many who can afford it.

The problem with these services, though, is their exclusiveness. If these services’ advertising pitches are to be believed, then there’s a serious advocacy advantage for sale to those who can afford it. In the words of the “Bloomberg Government” promotional video -- they’re changing the “game” and allowing you to get “ahead.”

The Sunlight Foundation exists because we want everyone to get ahead, and that we all stand to benefit from real-time, online access to government information.That’s why we’ve built sites like TransparencyData, InfluenceExplorer, Poligraft, or Real Time Congress, and that’s why we’ve supported efforts like OpenSecrets, OpenCongress, and FedSpending.org. Some of our work replicates services also offered through others' exclusive pay-services, and some of it is available only through the services we provide (like Party Time), but they all share the same goal: broad public access to government information.

If those with money are the only ones that have game-changing access to the workings of government, then our vital legislative and regulatory processes become skewed in their favor. Insofar as these services are worth the price of admission, they reinforce disparities in privilege and access.

This criticism is not unique to Bloomberg LP. The control and sale of information about government have always flourished -- West, Lexis, CQ, National Journal, and even the Congressional Globe all come to mind. But that doesn’t mean that we have to accept as inevitable a two-tiered system for working with the government. That also doesn’t mean that we begrudge commercial publishers their work. Business is business, and commercial publishers provide extremely useful services, many of which Sunlight even subscribes to.

But a world where expensive commercial services dominate public access is one we should avoid. Our government already relies heavily on third parties just to access their own information. The GAO uses West to access its own legislative histories, Congress still doesn't provide useful central access to committee schedules, and commercial legal publishers completely eclipse services provided by the courts.  When government officials accept cost-prohibitive information services as the norm for even basic transparency, then they’re far less likely to invest in the public facing alternatives that can serve everyone.

The House (Rule XV) explicitly permits Member offices to accept free subscriptions to news sources -- not just daily newspapers, but also expensive subscriptions like the Bloomberg service, routinely offered for free or at deep discounts. If these information gifts are to be accepted by Member offices, then we need to also understand the biases that over-reliance on exclusive information sources can create.

In the long run, expensive commercial services may help transparency enormously, since showing what is possible can be an enormous motivator for everyone. We should also remember, though, that privileged access can have a very high price, and not just for those who can afford to pay.

A Wall Street Journal investigative report revealed yesterday that at least 72 hill staffers “traded shares of companies that their bosses help oversee” in 2008 and 2009. While Congress ponders legislation to ban insider trading (which we wrote about in November 2009), WSJ’s Deal Blog points to transparency rules and searchable databases of lawmakers’ financial disclosures as providing a window into whether insider trading has occurred.

In recent years, there’s been progress on making congressional ethics information available online -- most notably with lobbying disclosure reports -- but there’s a long way to go. In January, we called for all congressional ethics information that’s required to be publicly available to be posted online, including the personal financial disclosure reports that were the foundation of the Wall Street Journal’s reporting.

Currently, the Center for Responsive Politics* and Legistorm spend enormous amounts of time and money accessing and digitizing personal financial disclosure forms. We believe that Congress has the responsibility to make this information available to the public on the Internet in a timely fashion and in machine-readable formats. The Sunlight Foundation issued recommendations on changing the House Rules to do that (among other things).

The personal financial disclosure reports themselves deserve a second look. Congress should reexamine who is required to disclose information, what should be disclosed, and how frequently that disclosure should take place.

As things stand, Members of Congress and certain staff are required to disclose stock transactions, but only once a year on June 15. My colleague Paul Blumenthal suggests that real-time reporting would be beneficial and not too burdensome. He’s right, and there’s more to be done.

For example, residences and loans do not need to be disclosed unless they provide income to a lawmaker. That should be changed. Disclosure of residential and loan information would have shed light on the potential conflict of interest raised by mortgage company Countrywide Financial giving allegedly preferential treatment to lawmakers, which created a big brouhaha last year and triggered a year-long ethics committee investigation. These questionable practices could have been nipped in the bud, or entirely deterred, were they required to be reported.

Additionally, lawmaker assets and debts are reported within very wide ranges. Our Executive Director Ellen Miller suggests that assets and debts should be reported to the penny, but even tightening the reporting ranges, as suggested in the Transparency in Government Act (HR 4983), would be a dramatic improvement.

It’s also worthwhile to consider whether using an earnings threshold to trigger staffer reporting is the best way to go. As we’ve seen in other contexts, sometimes staff salaries are set to avoid reporting requirements. It may be necessary to also look at a staffer’s responsibilities to see whether reporting should be triggered.

Finally, although we’re focusing on the congressional context, we shouldn’t forget that financial disclosures are also filed by members of the executive and judicial branch. It may be time to revisit what they must file and how their reports are publicly disclosed. GAO already has a mandate to conduct a review of financial reporting requirements.

There’s a careful balance that must be struck between transparency and privacy, and a weighing of the burden new rules could impose on government versus the benefits that would accrue to the public. As yesterday’s reporting makes clear, there’s a larger role for transparency to play. Placing the personal financial disclosure reports online, with greater detail and increasing frequency, is a great place to start.

• Note: The Sunlight Foundation has provided grants to the Center for Responsive Politics to maintain their money-in-politics resources, including personal financial disclosures.

The GAO is bound by law under the Honest Leadership and Open Government Act of 2007 to file an annual review of compliance with lobbying disclosure requirements. A review of last year's disclosure compliance was released yesterday. For the review, the GAO randomly audited 100 lobby shops to determine their level of compliance. The contains statistics on those 100 lobby shops and estimations for the statistical level of disclosure across all lobby shops. Here are some of the noteworthy estimated statistics:

• 6 percent of all lobbyist disclosures "erroneously report the amount of income or expenses for lobbying activity."
• 7 percent, at minimum, of all lobbyist disclosures "list lobbying activity that did not actually happen."
• 3 percent, at minimum, of all lobbyist disclosures "fail to fully disclose whether the individual lobbyists for a specific client held an official covered position."
• 4 percent, at minimum, of all lobbyist contribution disclosures "omit donations that should have been reported."

And these are statistics based on the 100 randomly audited lobby shops:

• 14 percent of lobbyist disclosures were contradicted by documentation provided by lobbyists.
• 65 percent of lobbyist contribution disclosures "could be supported by FEC data or documentation provided by lobbyists."
• 16 percent of lobbyist contribution disclosures (LD-203) "contained erroneous entries or failed to disclose required contributions."
• 13 percent of registrants could not be linked to "a corresponding report... likely because either a report was not filed or reports that were filed contained information, such as client names, that did not match."

You can read the full report here.

sigh.

The GAO has compiled an enormous document to help the Senate confirm political appointees, and has created sample questions to ascertain their qualification. I'm disappointed in the technology and information management questions, which are all unimaginatively about FOIA. (see blockquote below)

What would you ask political appointees to ascertain their technological chops? How would you get their views on transparency?

(via Mother Jones, GAO pdf here.)

Ensuring Citizen Access to Government Information 16. Based on the principles of openness and accountability in government, the Freedom of Information Act (FOIA) gives the public the right to access government records and information. What challenges would Page 141 GAO-09-194 Eliciting Nominees' Views on Management Challenges Appendix XXXIII: Information and Technology Management you foresee in supporting these principles while still ensuring that certain kinds of government information are protected from disclosure, such as privacy-related information? 17. What kind of information would you envision presenting the greatest challenges? 18. Responding to FOIA requests requires agencies to be able to find and review information. What experience do you have that would help your agency take measures to maximize the efficiency of such processes?

Update: To be clear, GAO is a huge fan of transparency, and has questions throughout the 150 page document that assert transparency's role in effective agency management. I'm specifically (mildly) disappointed in the GAO's handling of the technology and information management section of the document.

(cross posted from our Google Group)

Jon Henke wrote the following provocation, and I decided to respond to the whole list, since it's a topic I think many here will be interested in. (I asked his permission to post in full.)

His email is first, and then my responses:

I had a fascinating conversation with a team leader from the GAO today, and two thoughts occurred to me:

1. GAO reports are done at the request of Congressmen, publicly available, and (as I understand it) reasonably dispassionate and thorough. Would it be possible (or useful) to have a sympathetic Senator request a GAO report on the use of technology in the Senate? Or on opportunities for Congressional transparency?

Whether it arrived in time to be useful to the Open Senate Project (doubtful), the examination process should provide very helpful ideas and motivation for progress. Perhaps a broader study could even provide a template for how the Obama administration could deploy technology and transparency to the executive branch agencies.

1. GAO studies typically last around a year, and upon their completion they are published online. But why are they only published when they are done? This is a public interest process. Why not make the public part of the process? Once a study is commissioned, and the outline of the project (what will be studied, how, what data is considered, etc) is devised, why not put that online and allow public comment about each section? If the GAO is studying veterans benefits, why just have a small team examining whatever evidence they can find? This is a job that screams "crowdsourcing/wisdom of crowds".

What's more, a collaborative process would both (a) allow input and ideas from citizens, and (b) allow experts (and yes, lobbyists) to make their arguments publicly, where they can (and should) be considered and integrated into the thought process. That could provide a useful way to evaluate the reports and the input of various groups, too (Did their predictions obtain in reality? Were important ideas ignored?)

Thoughts?

(and now responses)

I had a fascinating conversation with a team leader from the GAO today, and two thoughts occurred to me:

1. GAO reports are done at the request of Congressmen, publicly available, and (as I understand it) reasonably dispassionate and thorough. Would it be possible (or useful) to have a sympathetic Senator request a GAO report on the use of technology in the Senate? Or on opportunities for Congressional transparency?

I agree with the first sentence. There's a backlog of reports requested, though, and first priority is given to committee chairs' requests. (Here's the GAO document (pdf) that lays out their triage arrangement for requests.) They're also all public, although some of them are withheld from web publication by agency request.

I'm not sure how likely it is that GAO (or Congress) would prepare a report on transparency; CRS is more likely to respond (or to be asked) to prepare such a report. One recent, very similar report was prepared by Walter Oleszek, which I reviewed here, in September of 2007. I'm not sure if the report has been updated since, but it's a great resource.

Applying GAO to Congress isn't done all that frequently (as far as I'm aware), since GAO is a legislative support agency (like CRS or CBO), though of a slightly different type, acting often more like an executive agency. GAO's statutory requirement to review financial disclosure within all 3 branches has been (apparently) routinely ignored since approximately 1990.

Whether it arrived in time to be useful to the Open Senate Project (doubtful), the examination process should provide very helpful ideas and motivation for progress. Perhaps a broader study could even provide a template for how the Obama administration could deploy technology and transparency to the executive branch agencies.

With those cautions in mind, I'd love to see a GAO review of transparency in Congress, or even across all three branches, especially since many of the disclosure requirements have roots in the same laws (like the Ethics in Government Act, which sets financial disclosure requirements for high ranking staff in all three branches.) This is probably one among many tools to spur Congress into some constructive introspection, including CRS reports, committee hearings, legislation, sense of the Congress resolutions, informal advisory recommendations (cf this list, OMBWatch's report, or the ABA rulemaking report), lawsuits, committee reports, rulebreakers and internal champions, media coverage, etc. It would likely have to come from some committee chair (or leadership figure) with relevant jurisdiction, like a leg. branch approps chair, government reform chair (in the House) or gov't affairs cmte chair (in the Senate).

2. GAO studies typically last around a year, and upon their completion they are published online. But why are they only published when they are done? This is a public interest process. Why not make the public part of the process? Once a study is commissioned, and the outline of the project (what will be studied, how, what data is considered, etc) is devised, why not put that online and allow public comment about each section? If the GAO is studying veterans benefits, why just have a small team examining whatever evidence they can find? This is a job that screams "crowdsourcing/wisdom of crowds".

I agree with this in spirit, but I strongly fear unintended consequences here. Take the Office of Legislative Counsel, for example. This is a quiet, isolated room full of legal scholars with expertise in the actual drafting of laws. They operate under strict guidelines over what they can share, since the same drafters could conceivably be asked to write opposing bills for political opponents. Maintaining confidentiality and objectivity is essential, since everyone has an interest in trusting that bills will be well written.

The same is true for some CRS documents (those we're NOT asking to have published), where Members sometimes turn for confidential advice. I think confusion between these documents and the circulable documents causes some of the resistance to an open CRS we find on the hill.

GAO, not unlike a police department, needs whatever tools are necessary for effective oversight, and publishing only completed documents probably falls into that category.

What's more, a collaborative process would both (a) allow input and ideas from citizens, and (b) allow experts (and yes, lobbyists) to make their arguments publicly, where they can (and should) be considered and integrated into the thought process. That could provide a useful way to evaluate the reports and the input of various groups, too (Did their predictions obtain in reality? Were important ideas ignored?)

Again, with those cautions in place, I'm a HUGE fan of the idea that an empowered public can strengthen our checks and balances, and reinstate effective oversight both within and between branches. That's why I'd like to see a collection of upcoming reports to Congress (since it would empower public watchdogs and oversight staff alike), and why I started the (now defunct) Congressional Committees Project two years ago.

Integrating public activity into carefully constructed government processes can be tricky, which is one reason that the Peer to Patent Project's success is so impressive -- it's obviously the product of some brilliant and careful planning.

I'd love to see oversight committees, GAO, or even CRS start to address the possibilities presented to them by communities such as this one, but the first steps are hard to find, especially for as heated a topic as oversight, where jurisdictions are carefully protected, and where the stakes are especially high for those under investigation. If even commenting on the quintessentially public bill is so hard to implement, a publicly empowered oversight process will be even tougher to generate.

It's a good first step, though, that people within those institutions we wish to change are following along closely (many are on this list), and that policy makers and the media are recognizing the developing capacity for public relevance.