The Corner

Selling My Grassley STOCK

It not on everyone’s radar screen, but the STOCK (Stop Trading on Congressional Knowledge) Act has passed the Senate, and the House is expected to consider STOCK (possibly the Senate-adopted version) this week. If they take up the Senate bill, Members will have to deal with an amendment, sponsored by Iowa Republican Senator Charles Grassley, that, well, sorta reminds me of the RICO law. That’s the legislation concocted to go after racketeering mobsters—as the wise guy put it, “RICO is for guys named Rico”—but like too many laws that find themselves contorted and stretched by zealous prosecutors and regulators, RICO ended up going after little old Rosary-praying ladies outside of abortion clinics.

I have that same feeling about the Grassley component of STOCK. As he put in during a recent Senate-floor debate, “My amendment takes intelligence professionals and has them register just like every lobbyist … so that it is totally transparent, so that when these people come around to get information from us that they sell to hedge funds, you will know who they are.”

You can catch his two-minute argument on this video. And then you can  also catch the opposing argument by Democrat Senator Joseph Lieberman, whose worries, I think rightly, that the Iowan’s proposal will eventually become very expansive, forcing a huge number of people to become registered lobbyists, and placing them at risk of becoming criminals.

My shtick in these parts is usually to sell cruises. But a pal wrote me the other day about the havoc the Grassley proviso might wreak if it is adopted, so I’ll put aside any talk of verandah cabins and share his thoughts:

Under Grassley’s amendment, countless financial advisers and consultants who regularly gather information about potential legislation regarding finances or financial services would actually be forced to register as lobbyists – even though they gather info instead of try to persuade or lobby Members of Congress.

It would also force all of the people with whom these information consultants and financial advisers and consultants share their info, to register as lobbyists. No question, this will turn into a bureaucratic and legal nightmare. How about this scenario: When an information consultant for a large financial services company briefs several thousand financial advisers on a conference call about a possible bill in Washington, all of those advisers would then have to register as lobbyists. And if they don’t register, they could be subject to civil or criminal penalties.

That’s what Joe Lieberman fears. And seemingly with good cause. Grassley should too. His language is too broad, with unimagined consequences. Or imaginable, like this: Farmer Jones goes to a Greet the Senator  meeting in Ames. Says Jones: “Hey Senator Grassley, I am mighty concerned about this farm subsidy bill. Will it affect the corn crop I’m planning?” Answers Grassley: “Farmer Jones, I am confident that when the bill passes, we will be increasing the subsidy for corn.” Responds Jones: “Well that is wonderful news Senator. I think I am going to plant me another field.”

Unless he has registered as a lobbyist, Farmer Jones may have just engaged in a criminal activity, trading on “political intelligence” provided by none other than Senator Grassley, who in this situation essentially entraps an unwitting constituent, a farmer who, under federal law, doubles as an “information professional.”

The question now is, will the House, and its alleged conservative majority, think twice about making Grassley’s amendment the law of the land?


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