A watchdog group is taking lawmakers and their underlings to task for insider trading.
Cause of Action, a nonpartisan transparency group, is demanding an investigation into allegations that congressional staffers have used legislative information to make lucrative stock investments.
“There was a lot of focus on the members of Congress,” said Mary Beth Hutchins, a spokeswoman for Cause of Action. “Our concern is that there is potential for staffers, as well as the members.”
Insider trading moved from Wall Street to Capitol Hill following the publication of Peter Schweizer's Throw Them All Out, which documented numerous instances of congressmen and senators making suspicious financial transactions. The revelation led to an ethics investigation into the finances of Rep. Spencer Bachus (R., Ala.).
What many in the public do not realize, Hutchins said, is that the problem extends beyond elected officials.
“We think that the taxpayers have the right to know that their tax dollars are being used properly,” Hutchins said. “We thought it was important to look back and show the public what has happened in the past—what these staffers have done.”
The group sent a letter, which cited a Wall Street Journal study that found 72 suspect government employees, to ethics committees in both branches of Congress and both parties.
A Cause of Action review of financial disclosure forms found two staffers on the Senate Committee on Energy and Natural resources who traded energy stocks and a senior staffer at the Senate Committee on Agriculture, Nutrition and Forestry, who traded in tobacco.
Their names have been forwarded to ethics committees in both houses, though the group would not reveal their identities to the Washington Free Beacon, citing privacy concerns.
On Feb. 9, the House passed 417-2 the Stop Trading on Congressional Knowledge Act (STOCK Act), which would prevent lawmakers and staffers from enriching themselves on the stock market using insider knowledge obtained on the Hill. It passed the Senate by a 96-3 vote on Thursday.
Sen. Chuck Grassley (R., Iowa), a staunch advocate for the law, backed an amendment to prevent officials from providing political tips to financial insiders. He slammed colleagues for scrubbing the provision from the bill on the Senate floor.
“Usually, the only way any sort of ethics reform gets done around here is that someone gets caught,” he said. “With political intelligence we have the opportunity to create transparency before the next scandal happens.”
Hutchins is pleased that Congress has taken an interest in insider trading on Capitol Hill. Her group wants the public to remain vigilant for STOCK Act violations. Ethics investigations against staffers would send the right message, she said.
“Our concern is not the legislation itself, our mission is to expose and hold accountable government waste, misuse, and mismanagement,” Hutchins said. “If they’re not holding staffers accountable themselves, then we will put some pressure on them.”
The letter was sent to Rep. Jo Bonner (R., Ala.), chairman of the House Ethics Committee, and Sen. Barbara Boxer (D., Calif.), chairwoman of the Senate Select Committee on Ethics, on Feb. 14.
Boxer’s office did not respond to the Washington Free Beacon’s requests for comment. Representatives from the House committee could not comment on ongoing investigations into insider trading.
Neither Bonner nor Boxer responded to Cause of Action’s letter, according to Hutchins.