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Sunshine State News - Alcee Hastings, Dennis Ross Co-Sponsor Bill to Curb Insider Trading in Congress

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By Kendric Ward

Now that Occupy Wall Street protesters have been rousted from New York City's Zuccotti Park, they could turn up the heat on Capitol Hill, where some of the other "1 percent" work.

A new book, "Throw Them All Out," details how senators and members of Congress cash in on insider trading, parlaying information gleaned behind closed doors into personal profits.

While Occupy Wall Street pillories business executives' bonuses and Gordon Gekko lifestyles, lawmakers reap riches of their own, thanks to Congress's own lax or nonexistent financial rules, alleges author Peter Schweizer.

"There are specific regulations governing the use of a single piece of office stationery, but not a word about stock trading," says Schweizer, a research fellow at the Hoover Institution, a conservative think tank based at Stanford University.

Adam Hasner, a former Florida House majority leader seeking to unseat U.S. Bill Nelson, D-Fla., said, "Reports that some members of Congress are using their positions and access to insider information to benefit themselves financially aren't just disheartening, they're disturbing.

"It's indicative of why the overwhelming majority of Americans no longer trust their elected representatives serving in Washington," the South Florida Republican said.

Previous attempts to regulate lawmakers' market transactions have gone nowhere -- even after the trading scandal involving former House Majority Leader Tom DeLay and lobbyist Jack Abramoff a decade ago.

But a revived version of the stalled Stop Trading on Congressional Knowledge (STOCK) Act resurfaced in the House this month.

The measure would prohibit members of Congress, their employees and executive branch staff members from profiting from nonpublic information they obtain through their positions.

Under STOCK (HR 1148), members and staffers would be:

* Barred from buying or selling securities, swaps or commodity futures based on nonpublic information they obtain through their jobs.
* Prohibited from sharing nonpublic information about legislative actions for purposes of investing or profiting from investments.
* Required to report investment transactions valued in excess of $1,000.

Transactions involving blind trusts and mutual funds would be excluded.

Currently, members of Congress are only required leave their cell phones outside closed-door briefings where financially sensitive materials are shared. There are no restrictions on the actions they can take with the information they learn at those meetings.

While members of Congress are subject to insider-trading laws, those laws do not apply to "nonpublic information" from current or upcoming congressional activity.

Illustrating this apparent loophole, news reports note that a lawmaker who learns of an upcoming bill granting a company a large government contract, which could boost that company's stock, is free to buy that stock ahead of the bill's public introduction.

Sens. Scott Brown, R-Mass., and Kirsten Gillibrand, D-N.Y., introduced a Senate version of STOCK this week after CBS' "60 Minutes" alleged several members of Congress, including former House Speaker Nancy Pelosi, benefited from insider-trading schemes.

The San Francisco Democrat quickly brushed off suggestions of illicit profiteering in her 2008 purchase of 5,000 shares of the initial public offering of the credit card company Visa.

But Brown said, "Members of Congress should live under the same laws as everyone else. If they trade on inside knowledge to line their own pockets, they should be punished."

Hasner shares Brown's concern, and goes a step further.

"I fully support making it illegal for an elected official or staffer to use inside information for personal financial gain," he said. "I would also require members of Congress and key staff to place their assets in a blind trust so Americans can be confident they are doing the people's business, not their own."

Other GOP Senate candidates also decried inside trading by lawmakers and supported tougher regulations.

Craig Miller, a business executive, said he "would agree" that rules should be strengthened.

Mike McCalister, a retired Army colonel, stated, "I would support such legislation, as well. But, in reality, if we are going to change the corrupt practices of our nation's capital, we need to send true political outsiders, like me, to Washington who aren't looking to make a career out of politics."

George LeMieux's spokeswoman Anna Nix said, "Insider trading should not be tolerated at any level, especially by elected officials. Members of Congress should go to Washington to represent the values of their constituents, not for personal financial gain."

Inquiries to Florida Sens. Bill Nelson, a Democrat, and Republican Marco Rubio went unanswered.

According to the House website Tuesday, HR 1148, introduced by Rep. Timothy Walz, D-Minn., had 28 co-sponsors. Not a single member of Florida's 25-member congressional delegation was among them.

Seeking comment, Sunshine State News contacted the offices of Reps. Allen West, R-Plantation; Tom Rooney, R-Tequesta; Bill Posey, R-Rockledge; John Mica, R-Orlando; Sandy Adams, R-Orlando; Steve Southerland, R-Tallahassee; David Rivera, R-Miami; Debbie Wasserman Schultz, D-Fort Lauderdale; and Connie Mack, R-Naples, who is running for Senate.

Rooney, who says he doesn't own stock, believes that insider trading is already illegal under existing law.

"For a member of Congress to profit based on information that is not available to the public is a clear violation of House ethics rules and, in my opinion, already against the law," said Rooney, an attorney.

"We have an obligation to work on behalf of the American people, and any form of insider trading would be a breach of that trust," he added.

Along those lines, Posey said, "The enforcement of insider trading laws rests with the Securities and Exchange Commission.

"Insider trading laws should apply to everyone, including members of Congress. No one should be exempt from these laws."

Other members of the delegation either declined to comment or did not reply.

On the presidential trail, meanwhile, Texas Gov. Rick Perry posted a video over the weekend urging jail time for any lawmakers who engage in insider trading.

Ironically, a Texas business-development program has controversially issued state funds to companies headed by some of Perry's larger political contributors.

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