The Stock Act

Floor Speech

Mr. WALZ of Minnesota. Mr. Speaker, I rise today to urge and implore my colleagues to support the STOCK Act, the Stop Trading on Congressional Knowledge Act, and I ask also that Speaker Boehner bring this bill to the floor for a vote immediately.

On Sunday night on CBS, their news program ``60 Minutes'' highlighted the potential problem of insider trading on Capitol Hill. Unlike all other Americans and investors, Members of Congress and their staff are not held legally responsible for profiting from nonpublic information they gain from their official position serving the public. This is absolutely outrageous and strikes at the heart of the democracy.

When I first came to Congress and sat down with the author of this bill originally, Congressman Baird, and he started explaining to me what this was about, I, as most Americans, was shocked to believe it wasn't already a bill. Why would you allow the breach of trust of the American public to believe that their Member of Congress could potentially be trading on information to enrich themselves? It's not the point of, is it happening? The point is if the potential lies there.

At the heart of every relationship is trust. If the trust is violated, everything that comes after that is a moot point. And this might be the greatest understatement ever: the American public is understandably frustrated with all the bickering and gridlock here. They don't trust institutions, they don't trust their banker, they don't trust corporations, and they don't trust Congress. If you thought we couldn't go any lower than a 9 percent approval rating, just have the people who watch ``60 Minutes'' vote now and see where they're at.

This legislation is a very big step in the right direction. It's about restoring the faith and trust in Congress and the work of democracy. Ronald Reagan was right. We've heard about President Reagan several times today. Trust but verify. That's what this piece of legislation is about. We want to work with Speaker Boehner and get this bill moving. And let me tell you, it's very simple on what it does. The bill would prohibit insider trading on Capitol Hill. It will remove loopholes and any confusion about what's right, wrong, legal or illegal. No insider trading by Members of Congress and their staff, period. If you do it, you break the law and you will be held accountable. It's common sense.

The STOCK Act would prohibit Members of Congress and Congressional staff from using nonpublic information obtained through their official duties for personal gain in the stocks in the commodities markets. It would also prohibit private individuals and firms who attempt to mine such information from public officials to use it for insider trading. Specifically, the bill is simple and short and says this: It requires that the SEC and the CFTC write rules that ban using congressional, nonpublic information to make trades. It changes the House ethics rules to specifically ban Members and staff from using nonpublic information to make trades. It changes House disclosure rules to require Members and staff who already file financial disclosures to disclose trades of $1,000 or more in a timely fashion, in addition to the annual disclosures. And it requires political intelligence firms to register like lobbyists. These are the people who come to the Hill and use their connections to talk to people, try and understand what piece of legislation is moving, what's the potential for a potential government contract, and then they go back and sell the information that's given to investors.

That breach of trust, that potential to undermine our financial systems, is a cancer on the system. It weighs on the American public's trust of their finance, of corporations, of Congress and undermines the democracy. These people can still come here but register just like lobbyists.

Let's make sure that transparency and the disinfectant of sunshine shines on this. There is no room in this institution for even the perception of wrongdoing. Every Member of Congress must be held to a higher standard. It doesn't infringe upon their rights to legally trade, it doesn't infringe upon their rights--their American rights--to work hard, be smart, make good investments, and profit from that. What it does prohibit is an unfair playing field that penalizes those that play by the rules. And like so many of my colleagues and millions of middle class Americans, I myself am a public school teacher. I spent 24 years in the National Guard. I tried to do what was right by my family and my neighbors. I tried to play by the rules, with the great understanding that the American Dream was you play by the rules, you work hard, and you will benefit from that.

This piece of legislation ensures that the American people know that we, as their representatives in this sacred House of the people, are playing by the exact same rules, not worrying about enriching ourselves, not worrying about gaming the system, and making sure that their needs are put first. And as I said, it's not whether it happens or not, it's whether the perception is there. I urge my colleagues and Speaker Boehner, move this to the floor and let's vote for it.

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