WASHINGTON (Reuters) - The Senate on Thursday voted overwhelmingly to send President Barack Obama legislation imposing new curbs on insider trading by members of Congress, even though the measure was weaker than a version it passed in February.
“After I sign this bill into law, members of Congress will not be able to trade stocks based on nonpublic information they gleaned on Capitol Hill,” Obama said in a statement.
“It’s a good first step. And in the months ahead, Congress should do even more to help fight the destructive influence of money in politics and rebuild the trust between Washington and the American people,” Obama added.
Senators voted 96-3 for a motion that allowed automatic adoption of the Stop Trading On Congressional Knowledge Act, the most extensive effort to clamp down on Congress’ personal dealings in years.
The approval margin was identical to a February 9 vote on the measure that included two key provisions that were dropped from the final version: one creating new legal tools for prosecutors to pursue public corruption cases and another that would require so-called political intelligence operatives to register under lobbying laws.
The legislation, once seen as a feel-good bill destined for swift passage, ran into problems when the House of Representatives passed a version of it without those provisions.
House Republican leaders argued that the political intelligence provision, which targeted former Capitol Hill insiders who use their contacts to gather information on pending legislation and sell it to Wall Street investors, could tread on First Amendment free speech rights. Business groups also complained that it would create problems for company executives who come to Washington for legislative conferences.
The final version orders a study of what to do about the increasingly widespread practice.
Senate Majority Leader Harry Reid attempted to convene a conference with House members to try to bring the final bill closer to the Senate’s first version, but gave up this week and agreed to put the House bill to a vote.
The Senate bill’s sponsors chose to focus on what they did get in the final version - namely provisions to make it clear that Securities and Exchange Commission prohibitions against trading on insider information applies to lawmakers and their staffs.
“You can rarely get 100 percent of what you want, so you have to settle for less,” said Senator Joe Lieberman, an Independent who shepherded the bill as the head of the Homeland Security and Governmental Affairs Committee.
Similar insider trading legislation had languished in Congress for years, but got a massive boost last November from a CBS “60 Minutes” expose of questionable stock transactions by several members of Congress, including House Speaker John Boehner and House Democratic leader Nancy Pelosi.
The show also highlighted trades by Spencer Bachus, chairman of the House Financial Services Committee, whose dealings are now the subject of an investigation by the Office of Congressional Ethics.
With White House prodding, lawmakers seized upon the effort amid public opinion polls during the past year that put Congress’ approval rating at a record low of about 9 percent.
Reporting By David Lawder; editing by Vicki Allen and Cynthia Osterman