At a hearing of the Senate Homeland Security & Governmental Affairs Committee on Friday, Sens. Scott Brown (R., Mass.) and Kirsten Gillibrand (D., N.Y.) stressed the importance of legislation that would criminalize congressional insider trading.
In his testimony, Brown said that though some argue that the current law applies to congressmen and their staff, it has never been successfully used to prosecute such a case.
Currently, the term “insider trading” isn’t mentioned in any law, said Sen. Joseph Lieberman (I., Conn.), the chairman of the committee. Rather, all charges of insider trading are prosecuted under the anti-fraud provisions of the Securities and Exchange Act of 1934, a law too vague to be used to prosecute Congressmen.
Brown and Gillibrand have introduced separate pieces of legislation that they say would effectively ban the practice.
They have slight differences, though, which Brown addressed in his testimony. Gillibrand’s amends a Senate ethics rule, which means it would require 67 votes to pass. Brown’s, on the other hand, does not, so it only requires a simple majority for approval.
“Perceptions are very important in public service,” Lieberman said. “That means that if a law seems to allow members of Congress to take advantage of their public position for personal gain, the trust that needs to exist between the American people and our government will be further eroded than it already is.”
Though Collins and Lieberman applauded the two for the bills they introduced, Gillibrand’s bill drew fire from self-proclaimed Washington outsider Rick Perry.
In a statement issued today, he said, “Senator Gillibrand’s bill pretends to address the problem but instead guts efforts to outlaw the abhorrent practice of congressional insider trading. What could be more arrogant than promising to clean up the insider-trading mess, then maneuvering to make it even more difficult to prosecute corrupt lawmakers?”
The press release did not detail Perry’s specific concerns with the senator’s legislation.
Rep. Nancy Pelosi (D., Calif.), who was featured in a 60 Minutes special report on congressional insider trading, said she hopes legislation on the issue comes to the floor of the House soon. But the problem does not concern her as much as Brown and Gillibrand.
“I would hope that it’s not as necessary as the hoop-de-do over it makes it seem, but I do think that we all disclose what we do, and that’s really important,” she said.