WASHINGTON (Reuters) - A House of Representatives panel will hold a hearing early next month on legislation aimed at preventing members of Congress from making investments based on insider knowledge.
The issue flared up following a November 13 report by CBS’ “60 Minutes” questioning whether some members of Congress have used what they learned from their privileged posts to make lucrative investments.
The report was based on a book, “Throw Them All Out,” by Peter Schweizer who is a fellow at the conservative Hudson Institution.
The House Financial Services hearing is scheduled for December 6.
Members featured in the report, including Speaker John Boehner and House Minority Leader Nancy Pelosi, have denied any wrongdoing and their staffs have circulated analyses of their investments by ethics watchdogs to back up their rebuttals.
The issue, however, has gained political momentum and legislation seeking to clamp down on any possibility of insider trading by members of Congress was introduced this week.
The bill is called the Stop Trading on Congressional Knowledge (STOCK) Act of 2011.
Supporters of the bill argue there is little legal restraint on what they deem congressional insider trading.
The bills would prevent members of Congress, their staffs or anyone who works in the executive branch from making investment decisions based on nonpublic information they gather on the job.
House Financial Services Chairman Spencer Bachus was also featured in the “60 Minutes” report and in the book, which allege he made investments during the 2007-2009 financial crisis while he had access to briefings and information that was not public.
On Wednesday, Bachus strongly denied the charge, including one that he made investments betting General Electric Co’s stock would go down.
“The book is absolutely false and factually incorrect,” he said in a letter to the book’s publisher.
In announcing the hearing, Bachus pushed back against the idea that members of Congress have no legal restraint on the investments they can make.
“Existing law clearly prohibits insider trading by members of Congress,” he said in a release. “However, the American public deserves for there to be no question or equivocation concerning members of Congress or any citizen being exempted from laws prohibiting insider trading.”
On Wednesday, the committee’s lead Democrat, Barney Frank, urged Bachus to act on the bill, saying he should have done so when he was chairman in recent years.
Reporting by Dave Clarke; editing by Andre Grenon