Stop Trading on Congressional Knowledge Act of 2012

Floor Speech

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Mr. DINGELL. Madam Speaker, I rise in support of S. 2038, the STOCK Act. I have always stood for the strictest ethical standards for all government employees, and today is no different. Government employees cannot be allowed to profit privately in the performance of their official duties. Indeed, throughout my career, it has always been my understanding that the House Ethics Rules specifically prohibit this sort of behavior.

I will vote in favor of S. 2038. I am very pleased that the bill contains a rule of construction to preserve the Securities Exchange Commission's, SEC, existing anti-fraud enforcement authorities. Nevertheless, I have lingering concerns about the bill's practicability and other unintended consequences. I believe these matters might have been clarified if the bill had undergone regular order. Absent that, Members of the House should have been given a briefing about the bill prior to taking it up. In fact, I requested such a briefing in a February 7, 2012, letter to Speaker Boehner and Leader Cantor, but that request appears to have fallen on deaf ears.

It is uncertain to me whether House Leadership will insist on convening a conference committee with our friends in the Senate to forge a compromise. If that is to occur, I strongly urge House conferees to consider and solve the rather ticklish problem of how the SEC and House Committee on Ethics will interact under the Act. Furthermore, I have deep, dark fears that influential members of the House, Senate, and associated political organizations might exert pressure on the Commission to open or never begin a congressional insider trading investigation for political gain. Such an incident would fly in the face of the STOCK Act's otherwise meritorious intent.

In closing, I can only stress that this matter would have been best addressed in the various committees of jurisdiction and according to regular order. Observance of this institution's rules and procedures has produced well-written laws which have endured for years. I observed regular order as chairman of the Committee on Energy and Commerce and held numerous hearings on securities fraud in the 1980s. These hearings produced P.L. 98-376, the ``Insider Trading Sanctions Act of 1984,'' and P.L. 100-704, the ``Insider Trading and Securities Fraud Enforcement Act of 1988,'' which are the only major insider trading laws on the books.

Madam Speaker, I am ashamed to say I was right in predicting that banks would become ``too big to fail'' when I opposed the Gramm-Leach-Bliley Act on the floor in 1999. I hope I am wrong in predicting that the STOCK Act, if not subjected to serious scrutiny and amended, will produce an administrative morass and, worse, an enforcement tool subject to the perils of political manipulation.

That in mind, I ask my colleagues to vote in favor of S. 2038.

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