STOCK Act: Insider trading bill clears the House

The GOP-led House passed a tamer version of a sweeping ethics bill that would ban lawmakers’ insider trading for personal gain, setting up a showdown with the Senate, which approved a stricter version.

The legislation is the most ambitious effort in years to clamp down on the personal business dealings of lawmakers, and was beefed up to cover executive branch appointees and employees.

President Obama had called on Congress to send him such a bill last month during his State of the Union speech.

“It is unacceptable for anyone, any elected official, or their staff, to profit from information that is not available to the public,” said Rep. Eric Cantor (R-Va.), the majority leader who led passage of the House version. It was overwhelmingly approved Thursday 417-2.

“People in this country have a right to know and trust that officials at all levels of government are living under the same rules they are. If there is even the slightest appearance of impropriety, we ought to go ahead and prevent that from taking place. It is incumbent upon each of us to start restoring trust between the people and their elected representatives.”

Lawmakers were eager to show they are getting tough on potential ethics breaches after news accounts, including a “60 Minutes” episode, detailed instances in which lawmakers and their families may have gained financially by making investments based on information not broadly known. The push to be on the right side of the issue in an election year was evidenced by the overwhelming support for the legislation in both chambers.

But the different paths taken by the House and the Senate, where Democrats have the majority, leave the final outcome uncertain.

Senators objected to the decision by GOP leaders in the House to drop a provision that would clamp down on the exchange of “political intelligence” -- a newly defined area in ethics. Those who broker in political intelligence would be required to register as lobbyists under the Senate-passed bill.

“It’s astonishing and extremely disappointing that the House would fulfill Wall Street’s wishes by killing this provision,” said Republican Sen. Chuck Grassley of Iowa, who authored the provision. “The Senate clearly voted to try to shed light on an industry that’s behind the scenes. If the Senate language is too broad, as opponents say, why not propose a solution instead of scrapping the provision altogether?”

Negotiators will now need to determine if the two bills can be merged for final approval.