A possible reprieve on STOCK Act disclosures?
- By Richard E. Cohen
- Mar 29, 2013
Sen. Tom Carper vows ‘very serious consideration’ of a study raising concerns about federal employee financial disclosure.
Facing an April 15 deadline that would require them to report their financial records online, including stock transactions, tens of thousands of federal employees might be rescued by a non-partisan Washington group that conducted a four-month study of a law which imposes broad new disclosure requirements.
The 153-page report, released by the National Academy of Public Administration on March 28, concluded that release of the detailed personal data would pose a national security risk, especially to senior employees who work overseas. With Congress not scheduled to return from its Easter recess until April 8, lawmakers would have only a few days to prevent implementation of the new rules.
In sometimes harshly critical language, NAPA urged Congress and President Barack Obama to repeal the provision of the Stop Trading on Congressional Knowledge (STOCK) Act that would require senior federal employees to comply with online posting requirements of their financial forms. With little public attention, Congress has delayed that deadline three times since it enacted the broader law a year ago.
“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 five-member panel of government experts concluded. The academy panel and its staff interviewed more than 150 experts from dozens of agencies and private organizations.
The report, which was mandated by Congress, blows the whistle on what was a bipartisan legislative rush to judgment following a report by CBS News’ “60 Minutes” that described rampant insider trading by members of Congress. As something of an afterthought, the Senate approved an amendment to extend the requirement to top employees of the executive and judicial branches, who already disclose their finances under the Ethics in Government Act of 1978.
In its findings, the panel made several key conclusions about the new law. The growth of publicly available, easily accessible data “has radically changed the privacy landscape, with potential negative consequences for both the institutions of government and the individual public servants (and their families) who serve them,” the report concluded.
The proposed database would provide high-quality personal information on high-value targets that would exploit the information for criminal, intelligence and other purposes. In addition, the information would offer few additional details on conflicts of interest beyond what is already available to government ethics officers.
John Bellinger III, who was legal adviser at the State Department from 2005 to 2009, hailed the report and urged Congress to quickly repeal or suspend the “misguided provision.” Bollinger, who is now a partner at Arnold and Porter law firm, criticized Obama for signing the legislation for political reasons and over the objections of several Cabinet departments.
In a sign that Congress might take some action, Sen. Tom Carper (D-Del.) said he will give “very serious consideration” to the NAPA findings and recommendations and hopes “my colleagues do the same as we determine the appropriate next step for STOCK Act implementation.”
Carper took over in January as chairman of the Senate Homeland Security and Governmental Affairs Committee, which has jurisdiction over the law and had drafted more narrow terms before the Senate and House expanded the provision’s reach. Public interest groups that advocate greater disclosure had actively pushed for the proposal, but it was not the topic of hearings in either chamber.
The new reporting requirements have been criticized by federal employee groups at a time when they are under siege from various directions, including a pay freeze that has extended more than two years and the sequestration of about $70 billion in annual appropriated funds for defense and discretionary domestic spending programs.