Stop Trading on Congressional Knowledge Act of 2012

Floor Speech

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SECTIONS 205 AND 211

Mr. LEVIN. Mr. President, Senator Leahy and Senator Cornyn have introduced a rather substantial amendment to the STOCK Act that would strengthen the tools that prosecutors and investigators use to detect and prosecute corruption by public officials. I would like to ask my colleagues a few clarifying questions about how their amendment achieves this laudable goal.

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Mr. LEVIN. My first question refers to section 205 of your amendment, covering bribery and graft. What is the purpose of including the phrase ``former public official''? How is it possible to bribe a former public official?

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Mr. LEVIN. Under section 205, an ``official act'' can refer to any matter which may ``at any time be pending.'' What prevents this definition from being overbroad and covering matters that a former public official, for example, never anticipated would be pending?

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Mr. LEVIN. Section 205 also refers to an official's ``place of trust and profit.'' What is a ``place of trust and profit''?

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Mr. LEVIN. I thank my colleague. Turning to section 211 of your amendment, the ``Prohibition on Undisclosed Self-Dealing By Public Officials,'' what is purpose of codifying this prohibition?

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Mr. LEVIN. Why is it necessary to make it a Federal crime for a local official to engage in undisclosed self-dealing?

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Mr. LEVIN. Does this amendment create the potential for arbitrary or politically motivated prosecutions of local officials?

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Mr. LEVIN. Why isn't there a magnitude requirement for the financial interest underlying undisclosed self-dealing? If one just reads this section, it appears as though even a trivial, attenuated financial benefit could lead to a violation

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Mr. LEVIN. Suppose a local official has not disclosed, as required by a local ordinance, that he owns a home in a targeted improvement district in his county. Then this official votes to install street lights in his town, which lowers crime, improves commerce, and consequently increases the value of his and other homes. Has he committed a Federal offense?

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Mr. LEVIN. I thank my colleague for his helpful explanation. There is one more issue I would like to discuss. Section 211 of your amendment includes a definition of ``material information.'' I want to be absolutely clear that this definition is specific to section 211 and is in no way intended to provide any meaning to the phrase ``material information'' as used elsewhere in the STOCK Act or anywhere else in law.

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Mr. LEVIN. One question that has arisen is whether the definition of ``material information'' in the new Criminal Code section your amendment creates is intended to or could affect other parts of the STOCK Act since the same term also appears in a very different context in other parts of the bill.

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Mr. LEVIN. I thank the Senator for that clarification. In addition to the precise wording of amendment 1483 and clear congressional intent that the phrase used in the new Criminal Code section not be imported to Federal securities law, the definition actually used in your amendment has no applicability or relevance to the materiality considerations that arise in insider trading cases.

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