I 

109TH CONGRESS 

2D SESSION H. R. 5015 

To prohibit securities trading based on nonpublic information relating to 

Congress, and to require additional reporting by Members and employees 

of Congress of securities transaction, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 28, 2006 

Mr. BAIRD (for himself and Ms. SLAUGHTER) introduced the following bill; 

which was referred to the Committee on Financial Services, and in addition to the Committees on House Administration, the Judiciary, and Agriculture, for a period to be subsequently determined by the Speaker, in 

each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To prohibit securities trading based on nonpublic information 

relating to Congress, and to require additional reporting 

by Members and employees of Congress of securities 

transaction, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Stop Trading on Con5 gressional Knowledge Act’’. 


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1 SEC. 2. NONPUBLIC INFORMATION RELATING TO CON2 GRESS. 

3 (a) SECURITIES TRANSACTIONS.—Section 10 of the 

4 Securities Exchange Act of 1934 is amended by adding 

5 at the end the following: 

6 ‘‘(c) NONPUBLIC INFORMATION RELATING TO CON7 GRESS.— 

8 ‘‘(1) PROHIBITION.—Not later than 270 days 

9 after the date of enactment of this subsection, the 

10 Commission shall by rule prohibit any person from 

11 buying or selling the securities of any issuer while 

12 such person is in possession of material nonpublic 

13 information relating to any pending or prospective 

14 legislative action relating to such issuer if— 

15 ‘‘(A) such information was obtained by 

16 reason of such person being a Member or em17 ployee of Congress; or 

18 ‘‘(B) such information was obtained from a 

19 Member or employee of Congress, and such per20 son knows that the information was so ob21 tained. 

22 ‘‘(2) DISCLOSURE.—Not later than 270 days 

23 after the date of enactment of this subsection, the 

24 Commission shall by rule prohibit any Member or 

25 employee of Congress, or any other person from dis26 closing material nonpublic information relating to 


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1 any pending or prospective legislative action relating 

2 to any issuer if that Member, employee, or other 

3 person has reason to believe that the information 

4 will be used to buy or sell the securities of such 

5 issuer based on such information.’’. 

6 (b) COMMODITIES TRANSACTIONS.—Section 4c of the 

7 Commodities Exchange Act (7 U.S.C. 6c) is amended by 

8 adding at the end the following: 

9 ‘‘(h) NONPUBLIC INFORMATION RELATING TO CON10 GRESS.— 

11 ‘‘(1) PROHIBITION.—Not later than 270 days 

12 after the date of enactment of this subsection, the 

13 Commission shall by rule prohibit any person from 

14 buying or selling any commodity for future delivery 

15 while such person is in possession of material non16 public information relating to any pending or pro17 spective legislative action relating to such commodity 

18 if— 

19 ‘‘(A) such information was obtained by 

20 reason of such person being a Member or em21 ployee of Congress; or 

22 ‘‘(B) such information was obtained from a 

23 Member or employee of Congress, and such per24 son knows that the information was so ob25 tained. 


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1 ‘‘(2) DISCLOSURE.—Not later than 270 days 

2 after the date of enactment of this subsection, the 

3 Commission shall by rule prohibit any Member or 

4 employee of Congress, or any other person from dis5 closing material nonpublic information relating to 

6 any pending or prospective legislative action relating 

7 to any commodity if that Member, employee, or 

8 other person has reason to believe that the informa9 tion will be used to buy or sell such commodity for 

10 future delivery based on such information.’’. 

11 SEC. 3. TIMELY REPORTING OF SECURITIES TRANS12 ACTIONS. 

13 (a) AMENDMENT.—Section 103 of the Ethics in Gov14 ernment Act of 1978 is amended by adding at the end 

15 the following subsection: 

16 ‘‘(l) Within 30 days after the purchase, sale, or ex17 change of any stocks, bonds, commodities futures, or other 

18 forms of securities that are otherwise required to be re19 ported under this Act and the transaction of which in20 volves at least $1000 by any Member of Congress or offi21 cer or employee of the legislative branch required to so 

22 file, that Member, officer, or employee shall file a report 

23 of that transaction with the Clerk of the House of Rep24 resentatives in the case of a Representative in Congress, 

25 a Delegate to Congress, or the Resident Commissioner 


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1 from Puerto Rico, or with the Secretary of the Senate in 

2 the case of a Senator.’’. 

3 (b) EFFECTIVE DATE.—The amendment made by 

4 subsection (a) shall apply to transactions occurring on or 

5 after the date that is 90 days after the date of the enact6 ment of this Act. 

7 SEC. 4. REGISTRATION OF POLITICAL INTELLIGENCE 

8 FIRMS. 

9 (a) DEFINITIONS.—Section 3 of the Lobbying Disclo10 sure Act of 1995 (2 U.S.C. 1602) is amended— 

11 (1) in paragraph (2)— 

12 (A) by inserting after ‘‘lobbying activities’’ 

13 both places such term appears the following: 

14 ‘‘or political intelligence activities’’; and 

15 (B) by inserting after ‘‘lobbyists’’ the fol16 lowing: ‘‘or political intelligence consultants’’; 

17 and 

18 (2) by adding at the end the following new 

19 paragraphs: 

20 ‘‘(17) POLITICAL INTELLIGENCE ACTIVITIES.— 

21 The term ‘political intelligence activities’ means po22 litical intelligence contacts and efforts in support of 

23 such contacts, including preparation and planning 

24 activities, research and other background work that 

25 is intended, at the time it is performed, for use in 


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1 contacts, and coordination with the political intel2 ligence activities of others. 

3 ‘‘(18) POLITICAL INTELLIGENCE CONTACT.— 

4 ‘‘(A) DEFINITION.—The term ‘political in5 telligence contact’ means any oral or written 

6 communication (including an electronic commu7 nication) to or from a covered legislative branch 

8 official, the information derived from which is 

9 intended for use in analyzing securities or com10 modities markets, that is made on behalf of a 

11 client with regard to the formulation, modifica12 tion, or adoption of Federal legislation (includ13 ing legislative proposals). 

14 ‘‘(B) EXCEPTION.—The term ‘political in15 telligence contact’ does not include a commu16 nication that is made by or to a representative 

17 of a media organization if the purpose of the 

18 communication is gathering and disseminating 

19 news and information to the public. 

20 ‘‘(19) POLITICAL INTELLIGENCE FIRM.—The 

21 term ‘political intelligence firm’ means a person or 

22 entity that has 1 or more employees who are polit23 ical intelligence consultants to a client other than 

24 that person or entity. 


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1 ‘‘(20) POLITICAL INTELLIGENCE CONSULT2 ANT.—The term ‘political intelligence consultant’ 

3 means any individual who is employed or retained by 

4 a client for financial or other compensation for serv5 ices that include one or more political intelligence 

6 contacts.’’. 

7 (b) REGISTRATION REQUIREMENT.—Section 4 of 

8 that Act (2 U.S.C. 1603) is amended— 

9 (1) in subsection (a)(1)— 

10 (A) by inserting after ‘‘whichever is ear11 lier,’’ the following: ‘‘or a political intelligence 

12 consultant first makes a political intelligence 

13 contact,’’; and 

14 (B) by inserting after ‘‘such lobbyist’’ both 

15 places such term appears the following: ‘‘or con16 sultant’’; 

17 (2) in subsection (a)(2), by inserting after ‘‘lob18 byists’’ both places such term appears the following: 

19 ‘‘or consultants’’; 

20 (3) in subsection (a)(3)(A)— 

21 (A) by inserting after ‘‘lobbying activities’’ 

22 each place such term appears the following: 

23 ‘‘and political intelligence activities’’; and 


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1 (B) in clause (i), by inserting after ‘‘lob2 bying firm’’ the following: ‘‘or political intel3 ligence firm’’; 

4 (4) in subsection (b)(3), by inserting after ‘‘lob5 bying activities’’ both places such term appears the 

6 following: ‘‘or political intelligence activities’’; 

7 (5) in subsection (b)(4), by inserting after ‘‘lob8 bying activities’’ the following: ‘‘or political intel9 ligence activities’’; 

10 (6) in subsection (b)(4)(C), by inserting after 

11 ‘‘lobbying activity’’ the following: ‘‘or political intel12 ligence activity’’; 

13 (7) in subsection (b)(5), by inserting after ‘‘lob14 bying activities’’ both places such term appears the 

15 following: ‘‘or political intelligence activities’’; 

16 (8) in subsection (b)(6), by inserting after ‘‘lob17 byist’’ both places such term appears the following: 

18 ‘‘or political intelligence consultant’’; 

19 (9) in subsection (c)(1), by inserting after ‘‘lob20 bying contacts’’ the following: ‘‘or political intel21 ligence contacts’’; 

22 (10) in subsection (c)(2)— 

23 (A) by inserting after ‘‘lobbying contact’’ 

24 the following: ‘‘or political intelligence contact’’; 

25 and 


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1 (B) by inserting after ‘‘lobbying contacts’’ 

2 the following: ‘‘and political intelligence con3 tacts’’; and 

4 (11) in subsection (d)(1), by inserting after 

5 ‘‘lobbying activities’’ both places such term appears 

6 the following: ‘‘or political intelligence activities’’. 

7 (c) REPORTS BY REGISTERED POLITICAL INTEL8 LIGENCE CONSULTANTS.—Section 5 of the Lobbying Dis9 closure Act of 1995 (2 U.S.C. 1604) is amended— 

10 (1) in subsection (a), by inserting after ‘‘lob11 bying activities’’ the following: ‘‘and political intel12 ligence activities’’; 

13 (2) in subsection (b)(2)— 

14 (A) in the matter preceding subparagraph 

15 (A), by inserting after ‘‘lobbying activities’’ the 

16 following: ‘‘or political intelligence activities’’; 

17 (B) in subparagraph (A)— 

18 (i) by inserting after ‘‘lobbyist’’ the 

19 following: ‘‘or political intelligence consult20 ant’’; and 

21 (ii) by inserting after ‘‘lobbying activi22 ties’’ the following: ‘‘or political intelligence 

23 activities’’; 


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1 (C) in subparagraph (B), by inserting after 

2 ‘‘lobbyists’’ the following: ‘‘or political intel3 ligence consultants’’; and 

4 (D) in subparagraph (C), by inserting 

5 after ‘‘lobbyists’’ the following: ‘‘or political in6 telligence consultants’’; 

7 (3) in subsection (b)(3)— 

8 (A) by inserting after ‘‘lobbying firm’’ the 

9 following: ‘‘or political intelligence firm’’; and 

10 (B) by inserting after ‘‘lobbying activities’’ 

11 both places such term appears the following: 

12 ‘‘or political intelligence activities’’; and 

13 (4) in subsection (b)(4), by inserting after ‘‘lob14 bying activities’’ both places such term appears the 

15 following: ‘‘or political intelligence activities’’. 

16 (d) DISCLOSURE AND ENFORCEMENT.—Section 6 of 

17 the Lobbying Disclosure Act of 1995 (2 U.S.C. 1605) is 

18 amended— 

19 (1) in paragraph (3)(A), by inserting after ‘‘lob20 bying firms’’ the following: ‘‘, political intelligence 

21 consultants, political intelligence firms,’’; 

22 (2) in paragraph (7), by inserting after ‘‘lob23 bying firm’’ the following: ‘‘, or political intelligence 

24 consultant or political intelligence firm,’’; and 


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1 (3) in paragraph (8), by inserting after ‘‘lob2 bying firm’’ the following: ‘‘, or political intelligence 

3 consultant or political intelligence firm,’’. 

4 (e) RULES OF CONSTRUCTION.—Section 8 of the 

5 Lobbying Disclosure Act of 1995 (2 U.S.C. 1607) is 

6 amended in subsection (b) by inserting after ‘‘lobbying 

7 contacts’’ the following: ‘‘, or political intelligence activi8 ties or political intelligence contacts,’’. 

Æ 


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