Congress bans members from insider trading

Congress is exempt from certain laws and regulations that other Americans must follow. Congress members are protected from laws that make insider trading illegal to anyone in the country, including members of the Executive and Judicial branches.

The term ‘insider trading' refers to the access to non-public information that gives an indication of future performance of a company and then using that information for personal financial gain.

"This is the great irony," said John Tillman, CEO of the Illinois Policy Institute. "Because Congress regulates and taxes businesses, they have meetings with people runnwing companies and lobbying firms. Executives disclose inside information to these policy makers."

After learning about the current protections for Congressional members, Adam Ryckaert, a senior sociology major at DePaul, said he is "obviously frustrated. Any law that Congress passes they should be subject to as well."

For almost six years, the Stop Trading of Congressional Knowledge act ("Stock") has been repeatedly introduced in the House by Rep. Louise Slaughter. It received little recognition until 60 Minutes released an investigative expose about insider trading in Congress.

Shortly after the segment aired, the Senate passed the Stock act 96-3 and sent it on to the House. One of the senators who voted against it was Sen. Tom Coburn, M.D. (R-Okla.).

In a statement on the Senate floor, Coburn said, "I honestly believe everyone in our body is never going to use insider trading to advantage themselves over the advantage of our country."

The 60 Minutes segment exposed deals made by congressional members on both sides of the aisle that have been criticized by some. While it is illegal for executives to give cash straight to congressional members, it is not illegal to give House or Senate members initial public offerings, or IPOs, of stock. House Minority Leader Nancy Pelosi received an IPO from Visa in 2008 when she was Speaker of the House and purchased 5,000 shares at $44 apiece.

This transaction occurred while credit card legislation that would have hurt Visa was on its way to the floor of the House. It was subsequently stopped.

In a news conference, Pelosi said she would "hold my record in terms of fighting the credit card companies as a Speaker of the House, or as a member of Congress, up against anyone's."

After learning about Pelosi and some of the other Congressmen and Senators who have been caught in these scenarios, Amy Schultz, a junior public relations major, said, "It makes me question what definition [Sen. Coburn] would give those actions."

With congressmen sitting on committees for industries such as banking and healthcare, they are privy to information that the rest of the country may not be aware of yet. "People with very modest means go into Congress and gain wealth," Tillman stated.

The Stock Act has now passed the House, 417-2, after omitting a provision that would require political intelligence agencies to register in the same way lobbying firms already do. This means that Stock will now require either a special committee between the House and the Senate in order to reconcile the differences in the bills, or the House version will be sent back to Senate for another vote.

In his State of the Union Address, President Obama called for "a bill that bans insider trading by members of Congress; I will sign it tomorrow." That statement was made just two months after the 60 Minutes segment aired. It was the first time the president publicly mentioned the issue.

Congress also currently has a job approval rating of 13 percent, according to Gallup.

"Shouldn't they just pass a blanket rule that Congress should follow all rules as everyone else?" Tillman said. He also cited media pressure that played a large part in the Stock Act's success but said, "It shouldn't take a 60 Minutes expose to pass this. What other stuff is out there that takes a special investigation to fix?"