On Tuesday, the House Financial Services Committee is slated to hold a hearing on the STOCK Act - short for Stop Trading on Congressional Knowledge Act.
The bill, which has languished since first being introduced in 2006, now has over 150 sponsors and the Senate held its first-ever hearing on related legislation last week.
"We've had a lot of recent converts now that the public knows what's going on," quips Peter Schweizer, author of Throw Them All Out, a book which -- along with a subsequent 60 Minutes profile -- helped focus the nation's attention on the trading activities of sitting members of Congress.
According to both Schweizer and separate university studies, sitting members of Congress have outperformed the market by 6% to 12% in the 1980s and 1990s. Another study contradicts that claim. Andrew Eggers of Yale University and Jens Hainmueller of MIT examined the stock portfolios of members of Congress between 2004 and 2008 and found the country's representatives "unperformed the market by 2-3% annually" during that period.
But whether elected officials outperform or trail the market is almost beside the point: Americans overwhelmingly believe insider trading by members of Congress needs to stop.
"To me it's a little encouraging," Schweizer says of Congress' sudden interest in the STOCK Act. "It shows if the American people are angry about something...there is an opportunity to effect change in a positive way that's not partisan one way or the other."
While encouraged by support for the STOCK Act, which he believes will pass, Schweizer says other reforms are necessary, just as mandating sitting members of Congress use blind trusts for their portfolios. (See: 'Throw Them All Out' Author Says STOCK Act Won't Stop Pols' Insider Trades)
As a fellow at the right-leaning Hoover Institute, editor at the right-leaning Breitbart.com and adviser to Sarah Palin's PAC, Schweizer's political affiliations are pretty obvious. Still, he is bipartisan in criticizing insider trading by politicians.
Among other Republicans, he cites Rep. Spencer Bachus (R-Al.) for allegedly shorting the market after privately meeting with Chairman Ben Bernanke and Treasury Secretary Henry Paulson in the wake of the 2008 financial crisis. Rep. Bachus, who claims the book has "several major and serious untruths and outright factual errors about me," will chair Tuesday's House hearing on the STOCK Act, which should make for some very interesting testimony.
For the record, Schweizer did not be testify at last week's Senate hearing nor is he scheduled to appear at Tuesday's House hearing in part, he suspects, because he's 'named names.'
- Peter Schweizer