President Obama signed the Stop Trading on Congressional Knowledge (STOCK) Act earlier this month, which was passed after a 60 Minutes investigation revealed that members of Congress were profiting from information they received in their official capacity. House Financial Services Chairman Spencer Bachus (R-AL), for instance, made nearly $30,000 trading on information he received during private briefings during the 2008 financial crisis.
The original version of the STOCK Act that passed out of the Senate included a provision that would have required Washington insiders who sell intelligence to corporate America to register as lobbyists. However, that provision was ultimately stripped from the bill by House Republicans. And according to an analysis by The Hill, it was Wall Street lobbying that proved the catalyst:
A review by The Hill of lobbying records from the first quarter of 2012 found that many of the financial sector’s biggest names lobbied on the Stop Trading on Congressional Knowledge (STOCK) Act. Many bolstered their forces with new lobbyists, while others turned to K Street for the first time as the bill moved toward President Obama’s desk to become law.
A concern for many in financial services was a provision that would have required “political intelligence” consultants to register as lobbyists and disclose their clients. Financial lobbyists were worried that would lead to thousands of research analysts having to register for even the briefest contact with Capitol Hill.
House Republicans stripped that measure from the final piece of legislation, spurring allegations from Democrats and some Republicans that the party was doing Wall Street’s bidding.
When the watered down bill passed the Senate, Sen. Charles Grassley (R-IA) — who sponsored the provision on political intelligence — blasted Congress, saying, “I won’t ascribe motives to anyone in this body, but I know that today’s actions only serve the desires of obscure and powerful Wall Street interests.” And it turns out that he comment was right on the mark.