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E-MailThe following post comes to us from Kenneth A. Gross, leader of the Political Law practice at Skadden, Arps, Slate, Meagher & Flom LLP, and is based on two Skadden, Arps memorandums.
The U.S. House of Representatives passed by a vote of 417-2 its version of the STOCK Act, which, as you may know from our previous post, was introduced in response to the U.S. Senate’s passing its own version of the STOCK Act. Now that the House version has passed, we expect that the House and Senate versions will go to conference. A copy of the House version of the STOCK Act can be found here.
Please note that among the more notable differences between the bills are that the Senate version amends both the Lobbying Disclosure Act of 1995 (by adding a new category of activities, “Political Intelligence Contacts”) and the illegal gratuities statute, but the House version does not. The differences between the two bills will have to be resolved and then approved by both the House and Senate in order for a final bill to be sent to the White House.
2 Comments
While a worthy effort, the STOCK Act does not go far enough. Members of Congress should be prohibited from owning individual stocks and restricted to holding only shares of broad market index funds (e.g., Russell 3000). A number of other public officials are subjected to similar prohibitions on what they can own. Why not members of Congress? Here’s another thought: Perhaps members of Congress should receive a small portion of their pay in the form of shares of an entire U.S. publicly-traded market composite fund? For fans of the “skin in the game” concept, this would mean that members of Congress would be incentivized to be mindful of the rest of our IRA, 401(k), 529 and ESA plans when weighing the pros and cons of their actions. Of course, we don’t want our elected officials to make decisions solely on the basis of how they would impact the stock market, but there is case for pushing members of Congress to make decisions based on what is good for the nation’s economy as a whole and not solely on what will help them get reelected in their own districts, which is where we seem to be right now.
Interesting comments from Chia. Perhaps holding until several years after retirement would provide additional incentive to think longer term. How about a say on pay based on performance? ;)