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Analysis: Increased financial reporting by federal execs under STOCK Act necessary
Wednesday - 4/4/2012, 2:24pm EDT
The Stop Trading on Congressional Knowledge — or STOCK — Act emphasizes that lawmakers are not exempt from laws against insider trading.
The law amends the 1978 Ethics in Government Act to allow the public more access to government officials' financial dealings.
The law also requires lawmakers and senior federal officials to notify their respective ethics offices if they begin negotiations to leave government service and tasks the Government Accountability Office and the Congressional Research Service with investigating the role of lobbying firms in financial markets.
Under the law, lawmakers and government employees will be required to report certain financial transactions within 45 days of the initial trade. Those reports — which now are typically only available upon request — will be made available on agency websites and, eventually, on searchable databases.
Previously, officials were required to file reports of a stock trade about once a year, said Sean Moulton, the director of federal information policy at OMB Watch, In Depth with Francis Rose.
But Moulton said the types of information that officials will be required to disclose has also expanded.
As far what the database that will eventually house the financial data Moulton said it's still a matter of "wait-and-see." The law specifically mandates a "searchable" database.
"But as anyone who's used different websites out there can tell you, you can have a good search and a good functioning website and you can have a bad one that makes it hard to find and use information," he said.
Expert: Increased reporting necessary
As evinced by the name, the law was originally designed to only apply to lawmakers and their staffs. But Moulton said expanding the scope of the law makes sense.
Employees in the executive branch "have just as much responsibility to act in the public interest and not in their own financial interest," Moulton said, "and they have just as much information about contracts that are going out or decisions that are being made, to file lawsuits against some company (for example). So there's still a lot of information inside the executive as well as the legislative branch that can be used, or I should say misused for a person's own financial gain."
As previously reported, the law is expected to increase the reporting burden on managers and could likely lead to less privacy for federal executives.
For those reasons, the Senior Executives Association asked lawmakers to oppose the bill.
"No one wants to violate people's privacy or expose private details of their lives unnecessarily," Moulton said. "And if there were another way to create the kind of accountability that we need here without revealing these details, I think there'd be a lot of interest in it."
But the kind of information the law requires officials to disclose is necessary to protect against conflicts of interest, he said.
(The Associated Press contributed to this report)
(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)