Congress this week approved a bill to free thousands of federal government employees from having to disclose their financial dealings online, rushing the bill through the Senate late Thursday and through the House on Friday.
But the push to undo the online reporting requirement is proving to be controversial.
The National Academy of Public Administration (NAPA) said that posting all of that information online posed a national security risk. But the Sunlight Foundation, an open government group, said releasing staffers from online disclosure eviscerates part of last year’s Stock Act, designed to stop insider trading by federal officials.
“Rather than craft narrow exemptions, or even delay implementation until proper protections could be created, the Senate decided instead to exclude legislative and executive staffers from the online disclosure requirements,” Lisa Rosenberg, government affairs consultant for the Sunlight Foundation, wrote in a blog posting.
Senate Majority Leader Harry Reid, Nevada Democrat, introduced the bill on Thursday and had the chamber vote on it late that evening. The House took the bill up on Friday afternoon and passed it by unanimous consent, with no members objecting.
Republican leaders did not give lawmakers the traditional three days to read the bill before holding a vote. One GOP aide told The Washington Times the three-day rule did not apply to Friday’s action because the bill came from the Senate, while another said the House moved quickly because of a Monday deadline for the new disclosure mandates to take effect.
“In December when we extended the Stock Act deadline of public disclosure for financial disclosure, we required a study by the nonpartisan and independent National Academy of Public Administration,” said Rory Cooper, a spokesman for House Majority Leader Eric Cantor, Virginia Republican. “This was their recommendation and the House and Senate agreed it was the best course of action for the time being.”
The legislation now goes to President Obama for his signature.
Last year, after CBS’s “60 Minutes” did a report suggesting that some government officials were financially benefiting from insider knowledge of federal actions, Congress quickly passed the Stock Act, which was designed to crack down on insider trading.
Part of the law required that senior government officials’ financial disclosure reports — which they are already required to submit in paper — be made available online in a searchable, sortable format. The belief was that publishing them online would make it easier for reporters and the public to try to spot illicit dealings.
The online disclosure provisions had not yet taken effect, and Congress asked NAPA to review the law.
In a report release last month a five-member NAPA panel said online posting would mean more sensitive information about high-level government employees would be easily available, which would make identify theft easier.
“An open, online, searchable and exploitable database of personal financial information about senior federal employees will provide easy access to ‘high quality’ personal information on ‘high value’ targets,” NAPA officials said in their report.
The Defense Department told NAPA that online disclosure would mean hostile nations would have easy access to sensitive personal information about top national security officials.
The revelations raised questions about Congress’s rush to pass the Stock Act in the first place last year.
It passed 96-3 in the Senate and 417-2 in the House, amid intense pressure from Mr. Obama, who called for its passage in his 2012 State of the Union address, and from outside public interest groups.
At the time, the few dissenters warned that the law over-promised and under-delivered.
Some members of Congress, meanwhile, want to go further and ban the use of “political intelligence” — a catch-all term for those with non-public knowledge about things brewing in government that could affect the markets.
In a report this week the Government Accountability said it was impossible to quantify how much political intelligence was being used in financial dealings.