Editorial: Ban insider trading in halls of Congress

U.S. Rep. Tim Walz's crusade against congressional insider trading had been a lonely one until just recently.

But a move Tuesday by the House Ethics Committee should prompt even more of the southern Minnesota Democrat's colleagues to support an overdue no-brainer of a bill -- the STOCK Act -- that would prevent members of Congress from profiting from their privileged, in-the-know perches on Capitol Hill.

In particular, we'd like to see Minnesota's Republican House delegation -- John Kline, Erik Paulsen, Michele Bachmann and Chip Cravaack -- strongly back this bill.

Their absence among the bill's 131 bipartisan cosponsors is conspicuous and out-of-touch when congressional approval ratings are in the tank.

The state's Democratic House delegation -- Collin Peterson, Keith Ellison and Betty McCollum -- has signed on, and Sen. Amy Klobuchar is a cosponsor of companion legislation in the Senate.

Democratic Sen. Al Franken is supportive of the measure's goals but has not signed on as a co-sponsor.

Walz, a three-term Democratic congressman, became the lead sponsor of the bill after Rep. Brian Baird, D-Wash., left Congress.

STOCK stands for Stop Trading On Congressional Knowledge. In addition to outlawing insider trading -- a crime anywhere else -- it would also more clearly define what constitutes "nonpublic knowledge" and would require more frequent disclosure of stock gains by members of Congress.

The legislation would also provide greater oversight and more disclosure for a shadowy industry -- "political intelligence" firms, which package information gleaned on the street and in the corridors and sell it to big Wall Street players at a high price.

The STOCK legislation had languished for six years. Not even the energetic Walz could whip up much more support until a stunning "60 Minutes" segment earlier this month drew attention to the issue.

The CBS news show alleged that current Republican House Speaker John Boehner and former Democratic Speaker Nancy Pelosi bought certain stocks while they were weighing legislation crucial to these industries' future.

The arrogance on display when Pelosi and Boehner dismissed the issue ought to enrage everyone whose retirement investment accounts have taken a hit in the Great Recession.

Although there's an argument that current laws can be interpreted to make congressional insider trading illegal, the STOCK Act would leave no room for doubt. That the current situation is unacceptable was underscored by a House ethics committee memo released Tuesday.

The advisory drew bright, clear lines around what constitutes "nonpublic information" when it comes to personal financial transactions involving Congress.

Even if the STOCK Act continues to languish, just getting the committee to address the issue is a welcome development, said Meredith McGehee, policy director for the nonpartisan Campaign Legal Center.

The STOCK Act, however, would go further than this advisory by requiring more frequent disclosure for stock transactions by members of Congress, as well as providing oversight of the political intelligence industry.

The bill is smart politics and policy, and is a dose of what's needed to start reversing voters' rampant cynicism.

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