STOCK Act Amendment

Floor Speech

Mr. GRASSLEY. Mr. President, 1 week ago we passed a very important good government bill, the one that would make sure Members of Congress cannot benefit from insider trading information. I added to that an amendment that I think is a good government amendment. It calls for people who are involved in political intelligence gathering--we don't hear much about that profession, but it is quite a business. I asked that they be registered just like lobbyists are registered, and I would like to speak to the point of why that is very important and why it is important to bring it to the Senate's attention, even though it passed by a vote of 60 to 39 just a few days ago.

In the dark of night on Tuesday of this week, the House released its version of the insider trading bill that goes by the acronym STOCK, which wiped out any chance of meaningful transparency for the political intelligence industry. Think about the chutzpah of the people in the House of Representatives--a small group of people--taking out the language I put in that bill when similar language is cosponsored by 288 Members of the House of Representatives, but it happened. So that bill is coming back without the Grassley amendment on it, and we need to think about what we are going to do if we believe in good government, and if we believe there ought to be more transparency in government.

What we are faced with is a powerful industry that works in the shadows--
economic espionage. They don't want people to know what they do or whom they work for. They are basically afraid of sunlight, I would guess. My amendment was adopted in the Senate on a very bipartisan basis, kind of a rare occurrence today. It simply requires registration for lobbyists who seek information from Congress in order to trade on that information.

So isn't it very straightforward if trades are taking place based upon ``political intelligence''--that is their word, ``economic espionage'' is my word--obtained from Congress or the executive branch, people in this country should know who is gathering such information. Not requiring political intelligence professionals to register and disclose their contacts with government officials is a very gaping loophole that my amendment fixes. In fact, political intelligence firms actually brag about this loophole, and I will give an example about that bragging. This is on the Web site of an organization called the Open Source Intelligence Group, a political intelligence firm:

Our political intelligence operation differs from standard `lobbying' in that the OSINT Group is not looking to influence legislation on behalf of clients, but rather provide unique `monitoring' of information through our personal relationships between lawmakers, staffers, and lobbyists.

Providing this service for clients who do not want their interest in an issue publicly known is an activity that does not need to be reported under the Lobbying Disclosure Act, thus providing an additional layer of confidentially for our clients.

This service is ideal for companies seeking competitive advantage by allowing a client's interest to remain confidential .....

Think about the words ``personal relationships,'' ``confidentiality.'' Basically, what they are saying is do all this under the radar.

I wish to go back, if you didn't hear it the first time, let me repeat some of this for you, a much shorter quote:

Providing this service for clients who do not want their interests in an issue publicly known is an activity that does not need to be reported under the Lobbying Disclosure Act, thus providing an additional layer of confidentiality for our clients.

We have it here on paper, and I just read it to you. This firm--probably one of many firms; I don't know how many firms are doing this--is telling potential clients: If you don't want anybody to know what you are asking of Federal officials, hire us. That is wrong, but that is why firms such as this don't want to register. If someone on Wall Street is trying to make money off conversations they had with Senators or staff, we should know who they are. It is that plain and simple.

Since the passage of my amendment, which would require political intelligence lobbyists to register as lobbyists, I have heard a great deal of ``concern'' from the lobbying community. Political intelligence professionals have claimed they should do their business in secret for several reasons.

Now, this is the explanation of why they need secrecy. First, they have said if they are required to register, they will no longer be able to sell information to their clients because people will not want to hire them. That makes me wonder, what do they have to hide?

Second, they have said many of them have large numbers of clients, and it would take them a lot of time to register these large numbers of secret clients. Again, that makes me think we actually need more transparency to find out who are all of these people buying intelligence information.

Third, they have claimed it would not address the so-called ``20-percent loophole'' that allows people who spend less than 20 percent of their time lobbying from having to register under existing laws as lobbyists. Not too many people know of that 20-percent loophole, but that is a pretty big loophole. A person can lobby, but they don't have to register if they don't spend more than 20 percent of their time on it. Well, on this issue I have some good news for these people. We don't make the mistake that caused the 20-percent loophole. My amendment requires anyone who makes a political intelligence contact to have to register. No loopholes, no deals, no special treatment, just everyone registers.

Finally, I just want to assure people, particularly journalists, that they would not have to register. Now, that information has been floating around, and it has been floating around that some constituents looking for information in order to make a business decision might have to register. Not so. Only political intelligence brokers, people who seek information so others can trade securities, would have to register.

As I said before, if people want to trade stocks from what we do in Congress, we should know who they are. After all, the basic underlying piece of legislation prohibits Members of Congress from having insider trading information and profiting from it. We ought to know with whom we are dealing. The American people deserve a little sunshine from this industry and on this industry.

Last night, the House turned away from transparency. They supported the status quo. What we need is a full and open conference process so we can take up this very important issue once again that the House believes was somehow not very important, even though 288 Members of the House of Representatives--that is two-thirds of the House of Representatives--have signed on to this principle that these people ought to register. We can take that up then in conference, both the House and Senate, working together.

Is every word in this bill the way it ought to be? If somebody wants to point out some things that ought to be changed, I am open to that. But don't forget, 288 people in the House have signed on. It can't be too bad.

So if we don't get to conference or if we have to debate this again on the floor of the Senate, we might not get 60 votes again. So I worry we will miss the best opportunity we have had for openness and transparency in years.

I yield the floor.

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