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Insider Traders in Congress May Soon Be Revealed by the Bipartisan “Political Intelligence Transparency Act”

Statement of Craig Holman, Government Affairs Lobbyist, Public Citizen’s Congress Watch Division.

An untold story of our congressional system is the lucrative cottage industry of “political intelligence consultants.” These are lobbyists and Wall Street operatives who roam the halls of Congress and executive agencies trolling for inside information affecting the marketplace to sell to those looking to manipulate the stock market.

This enterprise is dubbed the “political intelligence industry,” consisting of some 2,000 political intelligence consultants soaking up information from government sources and selling it to clients to the tune of anywhere between $100 million and $400 million annually, although the amount is a very rough estimate.

We don’t really know who they are, and we are not sure how much money they’re raking in, because this cottage industry operates in complete secrecy.

Hopefully, that secrecy is about to come to an end.

Today, a bipartisan team of lawmakers – US Reps. Louise Slaughter (D-N.Y.), John Duncan (R-Tenn.) and Tim Walz (D-Minn.) – has introduced important legislation to open the books on the political intelligence industry. The Political Intelligence Transparency Act would require political intelligence consultants to register under the Lobbying Disclosure Act and disclose their clients, income and activities. This bill is a straightforward transparency measure that would enable the public to monitor whether any illegal insider trading is taking place.

This legislation fills a critical void: Because of fierce opposition from Wall Street, the political intelligence disclosure provision was removed from the original Stop Trading on Congressional Knowledge (STOCK) Act enacted in 2012.

Public Citizen heartily applauds this bipartisan effort to bring transparency to a secretive industry using nonpublic government information to conduct insider trading. This should have been passed two years ago, but better late than never.

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