Stop Trading on Congressional Knowledge Act

Floor Speech

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Ms. KLOBUCHAR. Mr. President, I rise today in strong support of the Stop Trading on Congressional Knowledge, better known as the STOCK Act, legislation that is critical to increasing accountability in Federal office and restoring the public's faith in government.

I am a cosponsor of the STOCK Act and have been working to address concerns about insider trading in Congress. I appreciate the leadership of my colleague from Minnesota, Tim Walz, in the House who spearheaded the bill, as well as the work of my colleagues, including Senator Gillibrand and Senator Brown, who have shown leadership in moving this issue forward.

No one is above the law in this country, least of all the lawmakers. At a time when Americans are crying out for leaders who are willing to put public interest before political gain, the STOCK Act presents a rare opportunity for both parties to come together and pass a bill that not only makes for good policy but that is, very simply, the right thing to do.

Over the last few years, we have worked to restore accountability and integrity to the major institutions in this country. We have worked to rein in recklessness on Wall Street. We have enforced greater accountability in Federal budgets. And in 2007, we passed historic reforms to strengthen congressional ethics laws.

I am standing here today because we can and must do more. Those of us who have the privilege of writing the rules have a responsibility to play by the rules, to not just talk the talk but walk the walk, and the STOCK Act is about making sure we are doing just that. This commonsense bill will strengthen our democracy by ensuring that no Federal employee or Member of Congress can profit from nonpublic information they have obtained through their position.

First and foremost, the legislation clarifies and strengthens laws for regulating insider trading by Members of Congress and their staff. It redefines the practice to clearly state that it is illegal to purchase assets based on knowledge gained through congressional work or service, ensuring Members of Congress are held to the same standards as the people we represent. That seems only fair.

Some people have argued that there are already laws on the books for this, but the fact is that insider trading by Members of Congress and their staff is currently not prohibited by the Securities Exchange Act or congressional rules. Furthermore, the status of trading on congressional information has never been explicitly outlawed. The resulting ambiguity has made it incredibly difficult to enforce these rules, which is almost certainly part of the reason not a single violation has ever been prosecuted.

The STOCK Act would clear up the ambiguity and make these laws crystal clear. It would give both the SEC and the ethics committee in each Chamber the authority to investigate and prosecute charges of insider trading, and it would make it a violation of the rules of the House and the Senate to engage in such activity, meaning that anyone who uses their role as a Member of Congress to enrich themselves would have to answer to the Department of Justice and the Securities and Exchange Commission.

The bill would also enforce better oversight by significantly strengthening reporting requirements. Members of Congress are already required to disclose the purchase or sale of securities and commodities on an annual basis, and the STOCK Act would take these requirements several steps further. Not only would it mandate that Members and employees disclose any and all transactions of over $1,000 within 30 days of the trade, but it would require that information about the transaction be published online.

Finally, to close the revolving door between Congress and special interest groups, the STOCK Act would introduce much needed transparency into the industry known as political intelligence consulting--the practice of reaching out to people working in the legislative and executive branches to gain market intelligence regarding proposed rules, regulations, and bills. The STOCK Act would require the Government Accountability Office to study this issue and see what we can do to ensure that these consultants are subject to the same reporting requirements and restrictions imposed on lobbyists.

Trust is the tie that binds our democracy, but with faith in government now at an alltime low, it is clear that some of those ties did break. Why would we not want to strengthen those bonds? Why would we not want to show the people who have sent us to Washington that we have nothing to hide by passing this bill? America was built on the principles of hard work, fair play, and personal responsibility. These are the rules middle-class families in States such as Minnesota and all across America are still playing by today. We in Congress need to be willing to stand up and say we are willing to do the same.
I want to end my remarks today by sharing two letters that were sent to my office on the subject of the STOCK Act. The first is from a Minnesotan named Robert, who wrote:

Elected officials need to get back to the business of representing those who sent them to Washington to serve, not increasing their personal wealth based on information they learn from holding those offices--information that, were it not for their elected office, they would otherwise not be privy to.

The second letter comes from a Minnesotan named David, who makes this issue crystal clear. He says:

Voters elect politicians to do what is best for the country, not to become rich.

I could not have put it better myself, and I could not agree more. I arrived in this town in a Saturn with my college dishes from 1985 and a shower curtain in the back seat, so clearly this is not as relevant to my personal situation. But I truly believe, if we are going to restore trust in government, we need to pass this bill.

I yield the floor.

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