Hands in the Cookie Jar
If there is one thing Americans across the political spectrum can agree on these days, it is that they are fed up with the bombast, posturing and fecklessness of Washington lawmakers. Furthermore, they are disgusted by the sleazy behaviors, unethical dealings and even outright corruption that so many of our elected officials engage in.
A recent “60 Minutes” segment created a stir by revealing how members of Congress are able rake in huge profits through stock trades in industries they regulate, sweetheart land deals, the gifting of IPO stocks, use of information obtained in closed-door hearings, and the power of Congressional purse strings.
There are laws against insider trading that apply to corporate executives. People like you and me could go to jail for the kinds of criminal activities that senators and representatives routinely engage in. But, unfortunately, the SEC law as it applies to Congress is murky.
When “60 Minutes” aired its expose about the issue of Congressional insider trading, members of Congress and their spokespeople first denied the problem, then dismissed it as immaterial, and then denied that it constituted a conflict of interest. Clearly many members of Congress – on both sides of the aisle – seem to think they are exempt from the law.
The fact is that even though insider trading prohibitions have been on the books for over 80 years, no member of the House or the Senate has ever been prosecuted by the SEC for misusing, mishandling or improperly revealing information obtained from legislative processes. However, that does not mean that members of Congress or their staffs are exempt from federal securities laws. Neither Exchange Act Section 10(b), the basis for most insider trading cases, nor existing case law suggests that members of Congress are not subject to prosecution for such acts.
Recent media reports have sparked calls for stronger, clearer, more explicit laws to prohibit members of Congress from insider trading and other forms of financial malfeasance. Legislation was being drafted and hearings were being held, but it appears now that this legislation has been put off indefinitely.
This is wrong. Insider trading is against the law – period. Every C-level executive knows this and understands the consequences of such chicanery. Public officials should be held to the same – or even higher – standards as ordinary Americans.
It’s time for our leaders to demonstrate that they are worthy of the trust we place in them.