Categorized | Opinion

Peter Schweizer Reacts to the STOCK Act Passing in the Senate

Last Thursday, the US Senate passed the STOCK Act, legislation that would ban members of congress from insider trading.

From CBS News:

Members of Congress are already subject to insider trading laws. But it is currently within the law for a lawmaker to buy a company’s stock after learning, for example, that an upcoming bill will grant that company a large government contract.

The ultimate fate of the STOCK (Stop Trading On Congressional Knowledge) Act, which comes in the wake of a "60 Minutes" story on potential congressional insider trading, remains unclear – though its prospects are relatively good. Passage in the Senate was complicated by a flurry of amendments added to the legislation, including a proposal that senators be prevented from owning individual stocks unless they are in a blind trust, and another that senators who become lobbyists lose their pensions. Some lawmakers expressed skittishness at the efforts to broaden the scope of the legislation…

One criticism of the original legislation – raised by House Majority Leader Eric Cantor – was that the original bill did not also focus on the executive branch. That issue seems to have been addressed: An amendment to extend the new rules to cover the executive branch passed on Thursday 58-41.

In a statement following the vote, Cantor said he was "pleased" with the Senate action — but added that that the version of the bill passed Thursday still needed to be reviewed. The Virgina Republican said the House would take up the legislation next week; if the House passes an amended version of the bill, it will have to go back to the Senate for another vote.

C4P readers are familiar with Peter Schweizer’s work, shining a spotlight on members of Congress for abusing their positions. In a piece published at The Daily Beast on Friday, Schweizer reacts to the STOCK Act bill’s passage in the Senate:

The STOCK Act to ban insider trading by members of Congress has sailed through the Senate, 96-3, and many members of the U.S. Senate were no doubt kicking and screaming as they voted for it. Heck, some of the most prominent cosponsors were people that I identified in my book, Throw Them All Out: How Politicians and Their Friends Get Rich Off Insider Stock Tips, Land Deals, and Cronyism That Would Send the Rest of Us to Prison, as having stock-trading activities that correlated nicely with their legislative work.

But let’s not let any of that sour the moment. The U.S. Senate has finally passed an important piece of legislation that reminds us all that members of Congress should abide by the same rules the rest of us do, including those involving insider trading.

I’ve made a lot of enemies in Washington over the past three months. I’ve been called names (by members of both political parties) and threatened with litigation. (My response was “go right ahead.”) But let’s take a moment to talk positively about some of those who made a difference in making this happen. After all, the American West was won by wagon train, and it took a team of dedicated and courageous people to bring us to this point.

The media: There were three news outlets that were determined to get to the bottom of this story regardless of who they ticked off: one on TV, another in print, and a third online. 60 Minutes producers Ira Rosen and Gabrielle Schonder, as well as correspondent Steve Kroft, got a lot of heat when they were working on this story. But despite distorted attacks by very powerful people in Washington, who took an “attack the messenger approach,” they didn’t blink. Bravo. Newsweek’s Peter Boyer (The Daily Beast is the online home of Newsweek magazine) was equally committed to getting to the truth and fought for this story to get out and took a lot of ground fire for it. If these individuals don’t win journalism awards for their work, there is no justice. Online, Andrew Breitbart (with whom I work), was all over this story from the beginning and was willing to go wherever it led, which meant going after both Democrats and Republicans, conservatives and liberals. He was essentially alone on this story. The actions of all of these individuals stand in stark contrast to many members of the Washington media who simply ignored the story or actually attacked it in an effort to curry favor with the Washington establishment. Unfortunately, there are a lot of lapdogs and too few watchdogs.

The politicians: The STOCK Act was introduced several years ago, but could never garner more than nine co-sponsors. Congressmen Louise Slaughter (D-NY), Walter Jones (R-NC), Tim Walz (D-MN) , and Brian Baird (a Democrat who represented Washington state, but who has since left) were doing the early lifting on this bill. They were against congressional insider trading before it was cool. They should be applauded. Once the battle was on, Sen. Scott Brown (R-MA) introduced a similar bill and became one of the most fierce in making sure the issue would not go away. Another warrior is Rep. Sean Duffy, a freshman from Wisconsin who recognizes that the STOCK Act is not nearly strong enough by itself and has proposed the RESTRICT Act, which must be passed next.

The American public: In all the people I spoke to about this problem, not one thought that members of Congress should be allowed to do this. And there were plenty of people who went further than simply being angry: they took action. In Birmingham, Ala., more than 100 Tea Party protesters showed up at Rep. Spencer Bachus’s office to protest his stock-options trading. Within two hours of doing so, Bachus declared his desire to hold hearings on the matter. He is now facing a serious primary challenger.

The passage of the STOCK Act in the Senate is just the first battlefield victory in this war for reform. The STOCK Act makes congressional insider-trading illegal. But let’s be clear: it alone doesn’t go nearly far enough to deal with the problems of cronyism and corruption that we face. It deals only with publicly traded stock, not equity buys in private companies. It does nothing to close the sweetheart deals involving IPO shares that can make politicians more money in one day than a bribe ever could. And insider-trading cases are very hard to win. On top of that, the Securities and Exchange Commission and Justice Department are unlikely to go after a powerful politician. Just look at what happened to the FBI when they were investigating Rep. William Jefferson, who famously took bribes and put the money in his freezer. There were threats to cut the FBI budget!

Schweizer then mentions importance of passing Rep. Duffy’s RESTRICT Act and the need to apply these same ethical standards to the executive branch.

You can read the entire article here.

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  • VeganPalinista

    I have a really hard time believing that this bill, with only 3 no votes, will actually reform anything at all.

    • fb274

      This bill may not reform anything now, but it certainly puts individuals on notice.  This is just a starting point and if we remove those who have been so intensely involved in circumventing current laws on the books, we will have made progress.    "Throw Them All Out" from local office on up.

      • alien4palin

        I agree totally!!!

    • generictrainee

      Me too.

  • palin45potus

    Although there’s no mention of Sarah Palin in this, I firmly believe that it’s by her request, due to the hyper-politicization of her name. By keeping her name out of it, she makes it "Safe" for "reformers" of both parties to sign on. Then she can use her Facebook page to call them out on it, should they fail to live up to the new law.

    Everyone knows that this is the issue that she’s been on with Peter Schweizer since at least Sept 3rd.

    Congrats to Peter Schweizer, and may this be just the start of a big roll!

    • JLAdevelop

      I think it is important that Sarah get some of the credit for emphasizing this issue. We can not let her successes be diminished or covered up because of the fear that she is "polarizing" or too "controversial" to include. 

      I agree with you that she may have requested she not be included since Peter is a consultant to her and it may have looked a bit self serving.

      But because this might have been her signature issue had she run that would have appealed to both parties, I am disappointed Peter did not give her some credit in the article. 

      • AmsterdamExpat

        Well yes, she certainly ought to be credited — and we all should make a point of that. PS himself, however, is in a different position, if only for pragmatic reasons.

      • AmazedOne1

        I agree that it would have been nice if he had said, "I appreciate the way that Sarah Palin has been advocating the topic." 

        However, (as you say) he’s a consultant to her, and not the other way around. He has been working on this long before she hired him. So, he’s not obligated to mention her, or any of his other clients who might also be promoting the results of his research.

      • alien4palin

        One of multitude of reasons that I have great respect for Sarah is that it does not bother her nor does she care whether she gets credit as long as it bears positive results contributing to moving  forward the mission to restore America.

        I think her supporters minded more on her behalf.

        • korn8131

          Alien you are so right. That what sets her apart from most in the Republican Party and all in the Democratic Party.

    • AmsterdamExpat

      I agree. Also not least in view of the fact that PS himself is on SP’s payroll.

      • Mountain

        I betcha Sarah Palin insisted that he NOT mention her.
        She’s pragmatic:  linking her name with certain projects—-like this one, which requires bipartisan support—-might ruin its prospects for success. 

        She’d rather her values be enacted, than get credit for making sure it happens.
        In that regard, she is SO UNIQUE, in contrast with other pols.
        (We love ya, Governor!)

  • Lennart Bilén

    Yet it lacks one thing. The real culprits in insider trading are the visitors to the White House. George Soros, Jeffrey Immelt, Warren Buffet to name a few. Unless they too are consider insiders, very little, if anything is gained by this legislation.It would strengthen the White House – capitalist power grab. – Read Crony Capitalism, and spread corruption even further.The ultimate "pay to play". Sarah Palin had to deal with it in Alaske, and unless she, or someone like her will become President corruption will increase.

    • Mountain

      You’re right—-but it’s still a necessary step to helping to rid DC of corruption.

  • AmsterdamExpat

    It’s also a start to addressing a number of parallel issues, namely, (1) the revolving door between the legislative branch and the lobbying firms, (2) the use of the promise of the so-called golden parachutes to purchase votes, and (3) the suborning of individuals in the top echelons of the various departments of the executive branch by foreign powers, notably but not solely those in the State Department.

    • Mountain

      ………which Peter S. has written about as well.

  • CharterOakie

    I’m reading Schweizer’s book now.  Very illuminating and very well written.
    Highly recommended.

    Sudden and relentless reform is what we need.  And we know just the right person to lead.

  • Cherrytwo

    Great news that there is finally some action.  Time will tell how effective the bill is.  For now this brings to book the suspicion as to why the Bush initiative for TARP went through so speedily.  It was simply to save the investments of these parasites in congress, the Executive, media and rest of the establishment -all those who supported TARP.  Those damn Bush bluebloods  and Congress have no doubt convinced themselves that they were doing God’s work with that bailout;   hudwinking the public all the while.
    Bravo to those fighting the good fight on this.  It’s becoming no surprise that Breitbart has had a part in this exposure…a for real caped crusader it seems.

    I can’t help but wonder where such self imposed great bastions within the halls of stellar journalism such as Mathews, Rather, Will, Krauthammer, O’reilly, Couric, Limbau, et al have been on this issue over time? Gone fishing?

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