Elected office is a place for public service, not personal gain. As demonstrated by the recent press stories, however, questions have been raised about whether lawmakers have been exempt -- legally or practically -- from the reach of our laws and regulations prohibiting insider trading. For example, what if a Member of Congress learned, in a classified briefing, that a major defense contractor was about to declare bankruptcy and that Member sold his stock before the news was made public? Is this fair? Is it legal?
"60 Minutes" first raised these troubling questions in a report late last year. And the allegations come at a time when, unfortunately, the public's faith in Congress is already extremely low. A recent Gallup poll shows that nearly 70 percent of the American public has little or no confidence in Congress. Other polls show that Americans rate Members of Congress at or near the bottom of the list in terms of perceived honesty and ethical standards.
This erosion of public trust is not confined to Congress, but it taints the public's view of our entire federal system. With the many challenges our nation faces, we must act to restore -- and to deserve -- the trust of the American people.
Recently, the President signed into law the most significant ethics reform in many years. The clear message of this new law, which I support, is that Members of Congress are not above the law.
This common-sense legislation, known as the Stop Trading on Congressional Knowledge, or STOCK, Act, makes it crystal clear that members of Congress are forbidden from trading on insider information. My committee, Homeland Security and Governmental Affairs, held a hearing on this bill shortly after the "60 Minutes" report aired. At the time, we learned that despite reassurances from legal experts and the Securities and Exchange Commission that no so such exemption actually existed, there was persistent disagreement about the issue. That's why I felt it was important to send a very clear message that Members of Congress are not exempt from the insider trading laws, and that is exactly what this bill does. In addition, top federal agency employees who have real influence within their agencies will also be subject to these same rules. And all will have to report online, making information easily accessible to the public.
The STOCK Act, which passed the Senate with overwhelming bipartisan support, is a small, but meaningful, example showing that elected representatives do hear our constituents and we can work across the aisle. I believe we sent a strong message that makes it absolutely clear that Members of Congress and their staffs are expected to play by the same rules as the public, and are not exempt from insider trading laws. This new law reassures the American people that elective office is a place for public service, not private gain.