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The Senate Curtails STOCK Act Provision – Plus Your Weekend Reads

The Senate has curtailed a provision in the Stop Trading on Congressional Knowledge Act that forced legislative and executive staffers to disclose their finances on a public, searchable database.

The decision comes after a major grumblings from senior executives. Congress tapped the National Academy of Public Administration to take a closer look at the provision.

Dan Blair is the President and CEO of NAPA. He told Chris Dorobek on the DorobekINSIDER program that the original version of the STOCK Act did have a major purpose.

“There was a 60 minutes segment a little over a year ago that proposed that members by virtue of their positions on committee and conferences had access to information that they could use for insider trading with regards to buying and selling securities. So the President and Congress joined together and passed legislation aimed at preventing that from happening,” said Blair.

So Why Are People Against the Act?

“During the debate on this bi-partisan legislation an amendment was offered and accepted that would require senior federal executives – those who are required to file SF278 financial disclosure forms – to do so online on a searchable database that the Office of Government Ethics was supposed to establish. The amendment was added with little fanfare and was signed into law by the President,” said Blair

  • After it was signed you started to hear these grumblings because their information would be public available on a searchable database.
  • There were a bunch of concerns voiced by a wide range of current and former officials saying this amount of transparency put people at risk for national security reasons, privacy and litigation.

How Did the SES Get Involved in the First Place?

“There was a view that if members of Congress and their staffs were going to be required to have their disclosures online then the executive branch should have to undergo the same level of scrutiny and public review,” said Blair.

Isn’t the Information Already Public?

“We already make this information public through the Office of Government Ethics. But it is making the information public in a way that people from their garages could be searching these things and using it in ways that weren’t intended. It raises some big concerns,” said Blair.

Reform the Ethics System?

“Our current ethics system is 35 years old. We need a better understanding of the changing landscape, there are new threats and more complex investment types. In 1978 investment choices for individuals were much more limited then they are today. But our ethics is still grounded in the 1978 thought process,” said Blair.

Weekend Reads

  • FastCompany: Why the future of innovation is in ideas, not products: Sure, Apple tops most-innovative lists time and again. But the greatest innovations can’t always be held in your hand, or slipped in a pocket.

  • FastCompany: Why Messenging Could Be Mobile’s Killer App

    • “I think everyone is realizing that messaging is the killer app in mobile,” says Ted Livingston, the creator of a messenger app called Kik. “Now it’s just who can wrap a platform around it the fastest.”

  • Memo to Staff: Take More Risks: CEOs Urge Employees to Embrace Failure and Keep Trying

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Alan L. Greenberg

The repeal of STOCK Act disclosure requirements, in my mind, is both good and bad news. Repealing the financial reporting requirements for senior executives makes sense. The act, as written, once again punished careerists for the meanderings of elected officials. It would have been a disaster to have career SES financial information available to the public, and be one more detriment to recruiting qualified SES personnel.

On the other hand, waiving the requirement for Congressional staffers totally dilutes the Act. Staffers, as much as elected officials themselves, have benefitted by inside information and favored treatment. Congress conveniently buried the ethics issue of staffers getting favored treatment from Countrywide Financial before it practically brought down the USA economy. This is one of many examples.

Our Congress has such a low ethical standing in the eye of the public that I would read between the lines of anything that comes from their hallowed halls.