Reps. Slaughter, Duncan Introduce Bipartisan Legislation to Bring Transparency to Political Intelligence Industry
WASHINGTON, DC — Today, Representatives Louise M. Slaughter (D-NY) and John J. Duncan (R-TN) introduced the bipartisan Political Intelligence Transparency Act. This legislation would bring transparency to the political intelligence industry, which generates $400 million in annual profits by gleaning information from the halls of government and selling it to Wall Street to inform investment decisions. It would expand the 2012 Stop Trading On Congressional Knowledge (STOCK) Act and subject those who engage in political intelligence to the same regulations and requirements as lobbyists.
“Although we made extraordinary progress with the passage of the STOCK Act, the job is not yet done. Political intelligence is a $400 million a year industry that is unregulated, unseen and operates in the shadows in Washington. It’s time to finally bring this industry into the light of day and hold these operatives to the same standards as lobbyists. This bill is similar to the provisions that members of both parties supported as part of the STOCK Act before a backroom political maneuver stripped them from the bill. I hope this bipartisan legislation can find that same support so we can finally make these transparency provisions a reality,” said Congresswoman Slaughter.
“I want to thank Congresswoman Slaughter for her continued leadership on this issue. This legislation is a commonsense proposal to finally end the ability of political intelligence operatives to work behind closed doors and profit from information that’s available only to the well-connected in Washington. It’s something that Republicans and Democrats should agree on,” said Rep. Duncan.
Every day, political intelligence firms help hedge funds and Wall Street investors profit from information not available to the public that is gathered from government sources. These firms have no oversight and can freely pass along information for investment purposes.
The Political Intelligence Transparency Act would bring much needed transparency to this industry by requiring political intelligence firms to register and comply with the same rules that apply to lobbyists. These include: registration with the House and Senate under the Lobbying Disclosure Act and revolving door restrictions for members of Congress, executive branch officials, and their staff and employees. Just like in the Lobbying Disclosure Act, the Political Intelligence Transparency Act carves out a clearly defined exemption for members of the media to collect and disseminate information from government sources.
The original STOCK Act contained requirements for disclosure and oversight of the political intelligence industry. These provisions were cosponsored in the House by 188 Democrats and 99 Republicans, and were passed by the Senate by a 96-3 margin. However, on the way to passage in the House, these political intelligence requirements were stripped from the bill by former Majority Leader Eric Cantor. Despite the bill sponsors’ best efforts, the STOCK Act was passed into law without political intelligence provisions.
Had these provisions passed in the original STOCK Act, they could have helped agencies with the investigation of a 2013 incident that is still working its way through the legal system. Just before the markets closed on April 1, 2013, shares of a number of health care companies spiked sharply. Minutes later, the Centers for Medicare & Medicaid Services announced that it would reverse an earlier decision to cut Medicare Advantage payment rates. A subsequent investigation revealed that a conversation earlier that day between a House Ways & Means Committee staffer and a political intelligence operative, himself a formerly well-placed congressional staffer, was the likely source of the tip-off. This matter is currently the subject of an ongoing SEC investigation.
The Political Intelligence Transparency Act is endorsed by Public Citizen, Citizens for Responsibility and Ethics in Washington (CREW), the Sunlight Foundation, Common Cause, Campaign for Accountability, Center for Media and Democracy, and Government Accountability Project.