Want transparency? First step: travel to DC
April 13, 2013 10:03 AM   Subscribe

Even before it was enacted, the United States House and Senate voted unanimously to repeal a provision within the STOCK Act, a bill aimed at curbing insider trading among senior government officials. The repealed provision required that financial disclosure forms were accessible online.

Members of Congress and various government agencies weighed in after the National Academy of Public Administration issued an independent report in March which concluded that "posting personal financial information as required by the act does indeed impose unwarranted risk to national security and law enforcement, as well as threaten agency missions, individual safety, and privacy."

The Sunlight Foundation states that this action "sets an extraordinarily dangerous precedent suggesting that any risks stem not from information being public but from public information being online," and had previously noted that attempts to remove the online disclosure provision were reliant upon scaremongering and security through obscurity.

Additional coverage by The Center for Responsive Politics. Here's the 60 Minutes report from 2011 which investigated the ability of Congress members to trade stocks based on non-public information.
posted by antonymous (18 comments total) 19 users marked this as a favorite
Beyond satire.
posted by jaduncan at 10:20 AM on April 13, 2013 [8 favorites]

The aristocracy on the right and the left don't want the commoners to know what hands are feeding them that they're not biting? This is my shocked face.
posted by ZenMasterThis at 10:21 AM on April 13, 2013 [2 favorites]

STOCK stands for "Stop Trading on Congressional Knowledge" and I am disappointed that the US House and Senate would be forced to have to protect their privileges in such a public manner.

Sending Martha Stewart to jail should have been example enough!
posted by three blind mice at 10:22 AM on April 13, 2013

Is there anything preventing an ambitious person from compiling this data and distributing it in printed form? Something handy like the mugshot newspaper at the 7-11.
posted by Kale Slayer at 10:25 AM on April 13, 2013 [2 favorites]

The culture that is Washington - "Some officials suggested that transparency 'could threaten national security...' "

also btw on the new commanding heights...

The problem with Promontory
Promontory is proof positive, then, of just how lucrative the revolving-door business can be. The company is full of lavishly-paid former regulators, hiring themselves out at $1,500 an hour to banks desperate for advice on how to navigate Washington's regulatory thicket...

That's why Promontory worries me: it represents the privatization of regulation, and the almost literal capture of regulators by the banks. Sure, those regulators are former regulators rather than current ones. But Promontory isn't just relied upon by banks; it's increasingly relied upon by regulators, too — it has become a trusted interlocutor for regulators in the way that the banks themselves never could be. Indeed, it's probably fair to say that regulators have started to effectively outsource some part of their role to the private sector, here, in much the same way as the Department of Defense is outsourcing chunks of its own role to Blackwater. But at least Blackwater is paid by the DOD, rather than by the DOD's adversaries.

The result is that the discourse around and between regulators and bankers is becoming less adversarial, at exactly the point at which it should be getting more adversarial. There is such a thing as too much regulation, and there is such a thing as an overly aggressive regulator. But our current system is nowhere near that point: instead, it continues to err on the side of leniency and toothlessness, egged on all the while by Promontory.

All of which is to say that Promontory itself, I think, is in need of regulation at this point. It has not registered as a lobbyist since 2009, but it is surely more influential than any lobbyist. When the man in charge of Promontory is making substantially more money than any banker, that’s a strong hint that Promontory is helping its clients to extract billions of dollars of value from somewhere. We should be asking ourselves exactly where that value is coming from. And who might be paying the cost.
Reform Suggestions for the Rogue Regulator, the OCC, and its Partner in Crime, the Shadow Regulator Promontory Group

My Time at Lehman: "What I discovered, quite starkly, is that the part of Wall Street that I worked in was simply transferring wealth from the less sophisticated investors, often teachers’ pension funds and factory workers’ retirement accounts, to the more sophisticated investors that call themselves proprietary trading desks and hedge funds."

How to Save American Finance from Itself: Has financialization gone too far?
Any complicated economy needs a complicated financial system: to allocate dispersed capital to dispersed productive uses, to provide liquidity, to do maturity and risk transformation, and to produce market evaluations of uncertain prospects. If these functions are not performed adequately, the economy cannot produce and grow with anything like efficiency. Granted all that, however, the suspicion persists that financialization has gone too far.

What would that mean? It would mean that the last x percent of financial activity absorbs more resources (especially intellectual resources) and creates more potential instability than its additional efficiency-benefits can justify. This charmingly subversive suggestion is easy to make, but it is extremely difficult to validate. Yes, it is hard to imagine that the Hedge Fund Operator of the Year does anything that is remotely socially useful enough to justify the enormous (and lightly taxed) compensation that results; but that is not really an argument. Much more significant is the fact that the bulk of incremental financial activity is trading, and trading, while it may provide a little useful public information about market opinion, is largely a way to transfer wealth from those with inferior information and calculation ability to those with more. There is no enhancement of economic efficiency to speak of.
oh and...
-Here's why 10.4 million American workers are still in poverty[*]
-ABS meets EBay - the disintermediation of consumer finance
-Savings Glut meets the Great Recession
-A bit more on savings and investment
posted by kliuless at 10:32 AM on April 13, 2013 [23 favorites]

Kale Slayer: sort of like the Memory hole website?
posted by rmd1023 at 10:32 AM on April 13, 2013 [2 favorites]

Aaron Swartz entered the DOJ's radar for doing exactly that with old federal case files, Kale Slayer. The DOJ told congress that they politically persecuted Aaron more over the Guerilla Open Access Manifesto, but Holder, etc. happily perjure when they cannot get caught, so who knows.
posted by jeffburdges at 10:39 AM on April 13, 2013 [2 favorites]

The aristocracy on the right and the left don't want the commoners to know what hands are feeding them that they're not biting?

"I would be ashamed to admit that I had risen from the ranks. When I rise it will be with the ranks, and not from the ranks." - Eugene V Debs
posted by phrontist at 10:48 AM on April 13, 2013 [7 favorites]

It seems to me that some mainstreamish periodical could publish a series of scathing reports about this, and use the difficulty of access to the source material to sell a few copies. Is there any real journalism outlet left that could withstand the heat of the justice department? The justice department is beyond scary.
posted by Kale Slayer at 10:58 AM on April 13, 2013

"sets an extraordinarily dangerous precedent suggesting that any risks stem not from information being public but from public information being online"

I'm extremely uncomfortable with all of these online public records databases and mug-shot extortion sites that have grown out of easy online access to public records, so I'm actually pretty fine with that precedent as a general principle, at least for the little people. It would return us to the sort of de facto semi-privacy that we had prior to the internet, and but a big barrier on systematized abuse.

That said, senior government officials are a totally different case, and they should see as much sunshine as possible. It should be part of the trade off for acquiring that kind of power.
posted by cosmic.osmo at 11:44 AM on April 13, 2013 [2 favorites]

"But Mr Dent, the plans have been available in the local planning office for the last nine months."
"Oh yes, well as soon as I heard I went straight round to see them, yesterday afternoon. You hadn't exactly gone out of your way to call attention to them, had you? I mean, like actually telling anybody or anything."
"But the plans were on display ..."
"On display? I eventually had to go down to the cellar to find them."
"That's the display department."
"With a flashlight."
"Ah, well the lights had probably gone."
"So had the stairs."
"But look, you found the notice didn't you?"
"Yes," said Arthur, "yes I did. It was on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying 'Beware of the Leopard'."
posted by jaduncan at 12:16 PM on April 13, 2013 [21 favorites]

The law still requires officials confirmed by congress and members of congress, the president a d his cabinet to make their financial disclosure forms available on the Internet. This was the intent of the original law. At the last minute to try to derail the bill a republican senator had added amenent that widened the law to apply to over 28,000 federal workers. They are still required under the law to report information for oversight on their finances, but they don't have to have then made public. Text of amendment here. The STOCK Act has not been repealed. There was also a significant legal challenge to this law by those affected workers that was going to delay the implementation of the law indefinitely. So actually in passing this amendment we get the law enacted sooner for the congressional reps that we were most concerns about originally.
posted by humanfont at 1:30 PM on April 13, 2013 [8 favorites]

I have of late—but wherefore I know not—lost all my mirth, forgone all custom of exercises, and indeed it goes so heavily with my disposition that this goodly frame, the earth, seems to me a sterile Promontory Financial Group, LLC
posted by Sys Rq at 1:31 PM on April 13, 2013

transparency 'could threaten national security...'

Indeed. Handguns can't. The updated second amendment should be insisting on transparency to keep our governments from becoming tyrannical.
posted by Obscure Reference at 1:35 PM on April 13, 2013 [1 favorite]

@Obscure Reference

i thought that was basically how the original second amendment was supposed to work
posted by This, of course, alludes to you at 2:35 PM on April 13, 2013

North America is the best America.
posted by CautionToTheWind at 2:27 AM on April 14, 2013

humanfont - thanks for that link - I actually feel a little sheepish that I forgot to include it in the post. Do you know which senator introduced the amendment that broadened this provision? From my reading of the altered text, it looks like the key wording changes were to remove "Officers of the House and Senate, and Congressional Staff" from the Members of Congress Section and by changing "Employees" to "Officials" from the Executive Branch Section. I don't know that much about "Congressional Staff," but that sounds like fresh-faced college grads and not part of the revolving door of corporate politics - I could be wrong on that.

The other thing that I hate about amendments like this is that, unlike the above example, they don't always reference the exact text they're referring to. So they can get away with (this refers to Section 11(b)):

(C) in paragraph (2)--
(i) by striking the first two sentences

If you want to know what those sentences are, you have to track down the original bill and find them. I'll save you the trouble - here is the text that was removed:

No login shall be required to search or sort the data contained in the reports made available by this subsection. A login protocol with the name of the user shall be utilized by a person downloading data contained in the reports.

My initial interpretation is that these sentences were removed because they were contradictory, written by someone who thought it was easy to separate "searching and sorting" and "downloading" into separate categories. But wouldn't that be accomplished by just removing the second sentence?

So if you want to "watch the watchers," you may be required to login first. What a country!
posted by antonymous at 6:28 AM on April 14, 2013

Richard Shelby R-Alabama sponsor the original amendment expanding the stock act to cover much of the executive branch.
posted by humanfont at 11:32 AM on April 14, 2013

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