K Street mum on insider trading bills

Just as Sherlock Holmes noted the dog that didn’t bark, it can be enlightening to watch for issues on which lobbyists don’t lobby.

A glaring example is the “Stop Trading on Congressional Knowledge Act,” introduced repeatedly over the last five years.

The legislation aims to prevent members of Congress from engaging in a form of insider trading that is unique to their positions.

Existing prohibitions don’t apply to nonpublic information about congressional activity. If a member of the House or Senate knows about upcoming legislation that could affect a company’s stock price, he is free to buy or sell shares before the bill is introduced.

The issue recently has drawn scrutiny, after being examined in a November segment of “60 Minutes”.

As reporter Steve Kroft noted in the piece, “Most former congressmen and senators manage to leave Washington – if they ever leave Washington – with more money in their pockets than they had when they arrived.”

Indeed, as the Washington Post reported this week, the median net worth of House members more than doubled between 1984 and 2009, while the wealth of the American family declined.

A few members of Congress have tried to address the insider-trading problem, with little support from their colleagues or from K Street.

In 2006, after a bill was introduced by former Rep. Brian Baird of Washington, not a single organization reported lobbying on the measure.

(Baird, a Democrat who did not seek re-election in 2010, is now a senior vice president at Vigor Industrial. He is not a registered lobbyist, but the company describes his role as “advocating policies to promote long-term job development and to strengthen maritime industries in the Northwest and throughout the United States.”)

Activity on the insider-trading issue picked up in 2009 and 2010, as it received more attention from citizens groups. Organizations lobbying for reform included Democracy 21, Public Citizen, U.S. Public Interest Research Group and the League of Women Voters.

The current House version of the bill, introduced in March by Rep. Timothy Walz of Minnesota, has attracted stronger support, with 241 cosponsors (157 Democrats and 84 Republicans).

Only two organizations – Common Cause and Democracy 21 – have reported lobbying on the issue in 2011.

The silence, as they say, is deafening.

A lot of people in Washington who get worked up about a lot of issues prefer to hold their tongues on this one.

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