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.