Congress and Obama undo ‘insider trading’ law

Evading any fanfare, President Obama followed Congress’s lead and quietly signed legislation Monday that gutted provisions of the Stop Trading on Congressional Knowledge Act (STOCK) which provided important oversight of government employees, including the President and members of Congress, by requiring disclosure of their finances to the public.

In a “highly visible” signing ceremony, President Obama affixed his signature to the STOCK Act on April 4, 2012. A year later, the process was reversed, without the fanfare. (Photo: Brendan Smialowski/AFP/Getty Images)”Without the provisions, the STOCK act is made toothless,” writes Dan Auble with the Center for Responsive Politics. “Insider trading by members of Congress and federal employees is still prohibited, but the ability of watchdog groups to verify that Congress is following its own rules is severely limited because these records could still be filed on paper—an unacceptably outdated practice that limits the public’s access. This is not true disclosure.”

Signed in to law last April, Obama originally hailed the measure as a step towards eliminating the “deficit of trust” between US citizens and their government.

The STOCK Act outlawed trading on nonpublic information by members of Congress, the executive branch and their staffs, and required already public financial disclosures be made available on an online database.

On Monday, the White House issued a one sentence statement announcing the changes to the law.

The President’s approval followed votes last week by both the Senate and House who “near silently” and “by unanimous consent” passed bill S.716, which gutted the law of the unfavorable disclosure requirements.

“Congress really wants to get something done, it can move blindingly fast,” writes NPR’sTamara Keith.

Citing concerns over the “security” of posting the financial data online, the bill eliminates a requirement that personal financial disclosures of 28,000 high level federal employees be made publicly accessible online. It also reverses “two critical components” of the original act: mandatory electronic filing of PFDs by the president, his cabinet and members of Congress, and the creation of a publicly accessible database.

“Are we going to return to the days when the public can use the Internet to research everything except what their government is doing?” asks Lisa Rosenberg from the nonprofit Sunlight Foundation. “Will Congress, in its twisted wisdom, decide that information is public if journalists, academics, advocates and citizens are forced to dig through file cabinets in basements in Washington, DC to find it? And does anyone think that makes us safer?”

“The result: More corruption and less trust in government,” she adds.

“The law Obama signed may be one of the most anti-transparent laws passed in recent memory,” writes Firedoglake’s DSWright. “Combine that with the sneaky Monsanto immunity bill, hidden corporate tax subsidies in the Fiscal Cliff deal, and intense resistance totransparency on his assassination program – it’s not looking good for open government. If there was ever any doubt this latest gutting of transparency and oversight of Washington Insiders by President Barack Obama has surely secured his legacy as just another politician that betrayed the public’s trust.”

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(H/t Car Accident Attorney John Yannone.)