Congress has a troubling propensity to require the rest of us to do what it resists.
The latest example is a claim from the U.S. House Ways and Means Committee and a top staff member that they are “absolutely immune” from a Securities and Exchange Commission subpoena in an insider-trading probe.
For years, Rep. Louise Slaughter, D-N.Y., has led efforts to end the slimy but legal practice of lawmakers and staffers spreading or trading on inside information. They couldn’t get enough votes for the change — until CBS’ 60 Minutes exposed the way members of Congress profit from their lawmaking. Suddenly, Congress summoned up bipartisan outrage that there was “gambling in Casablanca” and passed the Stop Trading on Congressional Knowledge Act in 2012.
Embarrassment doesn’t last long in Congress. Within a year, lawmakers had quietly gutted the act, and now the House’s chief tax-writing committee has the audacity to claim it is beyond the SEC’s investigatory reach.
The committee’s lawyers insist the SEC is seeking information about legislative activities that are protected by the Constitution and can’t be reviewed by federal courts. The committee’s second argument is even stranger — that the committee is too busy to deal with the SEC’s request for documents.
This Congress is too busy? Really?
These are inane arguments. Not everything that Congress does is legislative, so heaven help us all if an insider-trading investigation — a criminal act in the real world — gets a bogus congressional exemption.
There’s ample reason for the SEC to pursue this case. Last year, trading of health insurance companies suddenly spiked just before a government announcement that payments to health insurers would increase.
The SEC suspects a House Ways and Means staffer leaked the information to a lobbyist, who conveyed it to a securities analyst before the rest of the world learned it. The SEC suspects several dozen hedge funds and asset management advisers traded on the leaked information.
The prohibition against insider trading was supposed to end this dirty little congressional job perk that enriched staffers and lawyers, and greased the way for lucrative post-Congress careers as lobbyists, board members and consultants. No doubt that is why Congress gutted the act — for example, eliminating a searchable database for congressional stock activity.
If you want to see who traded a defense stock just before a committee vote on the matter, be prepared to search thousands of paper records.
The Ways and Means Committee isn’t just backpedaling from cooperating on an investigation of a potential ethical and criminal infraction; members have turned around and are sprinting away from it with a whole new rate of hypocrisy.
— The Dallas Morning News