In a political season that has revolved around questions of lawmaker transparency and fiscal integrity, Congress is getting ready to put its money where its mouth is. The Stop Trading on Congressional Knowledge, or STOCK, Act overwhelmingly passed the Senate last week. It could hit the House floor as early as this week, where it has hundreds of co-sponsors, including 16 from Texas.
“Congress needs to lead by example, and make themselves part of the law and not above the law," said state Rep. Pete Gallego, D-Alpine, an outspoken supporter of the act and a candidate for the U.S. House seat held by Rep. Francisco “Quico” Canseco, R-San Antonio.
The bill follows months of heightened scrutiny on lawmaker business deals.
In November, a 60 Minutes report revealed that members of Congress had allegedly profited from the equivalent of insider trading. On Monday, The Washington Post published an interactive investigation into members of Congress who have directed federal earmarks to projects near their homes or property. And on Tuesday, The Texas Tribune reported that in the the 10th Congressional District, Democrat Dan Grant is alleging that incumbent GOP Rep. Michael McCaul, a co-sponsor to the House bill, used his position in Congress to benefit his family's vast holdings.
Specifically, Grant says McCaul engaged in "insider trading" because his family bought shares of TransCanada Corporation one day before the congressman sent a letter to the U.S. State Department urging passage of the company's $7 billion Keystone XL Pipeline. McCaul said he had no involvement in the stock trades and denied any link between his support for the pipeline and his family's stock portfolio.
The STOCK Act has the backing of more than a dozen prominent House lawmakers in Texas, including Rep. Lloyd Doggett, D-Austin, the first Texan to co-sponsor the bill (he signed on the day after the 60 Minutes report aired). A spokesman for another Texas co-sponsor, Irving Republican Rep. Kenny Marchant, said the House bill could be stronger than the Senate's and extend into the executive branch, requiring the two chambers to go to conference committee.
But even some of the Texas co-sponsors have taken heat for similar "insider" allegations — which go beyond stocks and trades to earmarks and post-legislative careers.
Monday's Washington Post report, "Capitol Assets," found that five Texas lawmakers had netted nearly $62 million in earmarks for improvements near their own property. Additionally, Houston Democratic Rep. Sheila Jackson Lee, a co-sponsor of the act, secured $5.25 million for the University of Houston between 2009 and 2010 while her husband was the vice president and later the vice chancellor of student affairs, the Post reported. The Texas representatives have denied that any of these earmarks were for personal gain rather than for their districts.
The STOCK Act also calls for a study into whether or not "political intelligence firms" — staffed by former lawmakers or former legislative staffers — provide privileged information to their clients. Former Texas Sen. Phil Gramm chairs one such group, U.S. Policy Metrics, an advisory firm that shares information about legislation with hedge funds and asset management firms. Gramm could not be reached for comment on whether the STOCK Act would affect his firm.
Not all Texas lawmakers have signed on to support the STOCK Act, which was first introduced in the House in 2004, but had only six cosponsors that year and was unable to make it to the Senate. Canseco, the San Antonio congressman, is instead supporting his own House resolution calling for members of Congress to place their securities in a blind trust.
“The reason that was done out of the House on a House Resolution was because we have had no success getting things through the Senate” in the past, Canseco said. “My bill does the very same thing which is trying to be done.”