Alert: The Senate just passed Sen. Grassley’s amendment 60 to 39. Video of Sen. Grassley’s remarks just prior to the vote is available here
WASHINGTON – Senator Chuck Grassley today offered an amendment to require political intelligence operatives to register and disclose affiliations in the same way that lobbyists are required to do.
“Political intelligence professionals aren’t considered lobbyists, so they don’t have to disclose that they’re seeking information and are paid for it,” Grassley said. “As a result, members of Congress and congressional staff have no way of knowing whether such meetings result in information being sold to firms that trade based on that information. My amendment would shed sunshine on this kind of political intelligence gathering.”
According to an October 2011 Wall Street Journal story, political intelligence has become an approximately $100 million industry that employs over 2,000 people in Washington. Political intelligence professionals seek information from members of Congress and congressional staff and then sell the information they gather to hedge funds and other firms that trade stocks and equities based on the information.
Grassley said transparency will help make members of Congress and congressional staff more aware of whether the people they are meeting with are selling information to others who trade on that information.
The Iowa senator offered his amendment, #1493, during Senate debate on the STOCK Act, S.2038. The Stop Trading On Congressional Knowledge bill would clarify that current prohibitions of the Securities and Exchange Commission on insider trading on non-public information extend to members of Congress and congressional staff. It also would speed disclosure by requiring those who file annual financial disclosure statements to report stock and bond transactions within 30 days of the transaction, among other measures.
Here is the text of the floor statement Grassley delivered this afternoon regarding his amendment:
Mr. President, I would like to call up amendment #1493 and make that amendment pending.
Mr. President, the Wall Street Journal recently reported that political intelligence is an approximately $100 million industry. The article also says that expert networks employ over 2,000 people in Washington, DC.
I say approximately because no one really knows how many people work in this industry, who they seek information from, what happens to that information, and how much they get paid. This is the problem.
You have a growing industry with no transparency. If a lobbyist has to register in order to advocate for a school or church, shouldn’t that same lobbyist have to register if they are seeking and getting inside information to make a profit on?
This is especially true if that information would make millions for a hedge fund or a private equity firm.
Under current law, this is not the case.
My amendment merely brings some sunlight to this area. It defines what a political intelligence lobbyist is and requires them to register – the same as any other lobbyist. I understand that some will say that there have not been hearings on this subject and that it should be studied first. But there isn’t much that’s complicated about this amendment.
If you seek information from Congress in order to make money, the American people have a right to know your name and who you’re selling that information to. That’s just basic good government.
This amendment isn’t just helpful to the American people, it also helps members and staff who are trying to decipher their duties under the STOCK Act. Senators have raised the question, “How will we know if the people we speak to trade on what we say?”
By requiring lobbyists who sell information to stock traders to register, members and staff have an easy way to track who they are and who they sell information to. This strengthens the bill and helps members and staff comply with its requirements.
Mr. President, I hope we can consider this amendment soon and bring light and transparency to this growing industry. I yield the floor.