The passage of the STOCK Act, a bill intended to bring greater transparency to the stock trades of members of Congress, is perhaps the highlight of Tim Walz’ congressional tenure.
But the bill wasn’t all that Walz desired, and it has already been weakened in places since its passage some 15 months ago. Now the Mankato Democrat has begun a fresh push to reinforce the legislation.
The focus of Walz’ new effort is what’s known as “political intelligence.” Such firms are said to bring in some $400 million annually by gathering inside information on pending legislation and regulations and funneling it to their clients.
The initial version of the STOCK Act sought to require political intelligence firms to register and disclose their clients, as is the case with lobbyists. But that provision was removed before the bill passed, replaced by a Securities and Exchange Commission study on political intelligence’s influence on the markets.
Since then, the Washington Post has detailed surges in health care stocks just before administration announcements about the Affordable Care Act and about meetings set up by political intelligence firms with White House staffers about implementation of the act. The meetings may have been completely legal, with no non-public information disclosed, but since the whole point of “political intelligence” is ferreting out the non-public information that can move markets, one has to wonder.
Also, the SEC’s study concluded that forcing more openness on political intelligence firms may help it identify insider trading by exposing connections.
Walz is on the right path. But given how difficult it was to move Congress to pass the watered-down STOCK Act to begin with, strengthening it figures to be no easy task, regardless of the merits.