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Congress Clears Fix to New Financial Disclosure Law

Updated: 8:40 p.m.

Congress quickly cleared a fix today to apply new financial disclosure requirements to lawmakers’ spouses and dependent children.

Senators had suggested that the drafting error was created when the House amended earlier Senate-passed legislation. The House unanimously cleared the bill soon after the Senate moved.

The bill corrects an error in the recently enacted law designed to curb Congressional securities trading based on insider knowledge. The Office of Government Ethics interpreted the language as exempting transactions involving assets of spouses and dependent children from the new disclosure requirements set by the law. The House Ethics Committee issued guidance that came to the same conclusion.

President Barack Obama signed the measure, known as the STOCK Act, into law April 4. The legislation was championed as a bipartisan victory, but some critics have said it does not go far enough in preventing the practice of Congressional insider trading.

The legislation cleared today, just as Members and Senators departed town for August recess, also would push back implementation of public posting of disclosure forms for some senior executive branch officials for a month, until Sept 30.

That disclosure requirement had triggered criticism from an assortment of former justice and national security officials, including former Homeland Security Secretary Michael Chertoff and Attorney General Michael Mukasey.

A letter signed by 14 former officials expressed concern about the possibility of the disclosures being used by terrorists and criminals.

The section “could also jeopardize the safety and security of other executive branch officials, especially with their signatures, is likely to invite hacking, financial attacks, and identity theft of these officials and their families, particularly by groups or individuals who may be affected by their governmental work,” the former officials wrote.

A “60 Minutes” segment and other news reports brought attention to the potential conflicts of interest by Members involving in trading financial instruments.

Also today, seven employees of the federal government and four organizations that represent such employees sued the federal government over the STOCK Act in a Maryland federal court. The group said the legislation violates their right to “informational privacy” by forcing them to hand over personal financial data that could be used for a variety of unintended purposes.