Road to insider trader reform remains undecided
In recent years, armies of lobbyists besieging Congress have become lightning rods for the anger of Americans who feel their government is in hock to moneyed interests.
Meanwhile, away from Washington's spotlight, a far lower-profile influence-peddling industry has been expanding rapidly.
The first most people heard of the 'political intelligence industry' was last Thursday, when the House of Representatives followed the Senate's lead in passing legislation barring members of Congress from insider trading based on non-public information to which they are privy.
Although many hailed the vote as a victory in the battle against congressional corruption, its refusal to immediately regulate the burgeoning political intelligence industry angered those who've long sought to corral it.
Unlike the Democrat-controlled Senate's version, passed on February 2, the Republican-controlled House's bill scrapped a provision requiring political intelligence firms to reveal their profits and clients in a fashion similar to that required of lobbyists.
Instead, the House will study the issue for at least another year before deciding what action - if any - to take.
"It's astonishing and extremely disappointing that the House would fulfil Wall Street's wishes by killing this provision," said Republican Charles Grassley, who sponsored the Senate's version.
The Senate and House must now find a compromise on the Stop Trading on Congressional Knowledge (Stock) Act before the President can sign it into law.
The political intelligence industry's below-radar existence has changed dramatically since the Wall Street Journal profiled it last October, revealing dozens of firms routinely meet with Congress members to be briefed on pending legalisation. They then take that insider knowledge to their clients - such as investment houses and hedge funds - who can play the markets to their advantage.
It is all legal. And, thanks to the House's actions last week, it seems likely to remain so for the foreseeable future.
Last November, the CBS news show 60 Minutes aired an expose on congressional insider trading that detailed the extent to which Democrats and Republicans had exploited information they'd accessed as congressional committee members to enrich themselves.
Amazingly, this has been perfectly legal, as Congress had exempted itself from the insider trading laws it applied to the likes of Wall Street CEOs, bankers and even Supreme Court members.
Prior to the airing of the bombshell 60 Minutes expose, the Stock Act had only nine co-sponsors among Congress's 435 members. Now 240 members of Congress back Stock. The Senate has passed it by a 96-to-three margin and the House by a 417-to-six spread.
Nonetheless, with the House blocking efforts to rein in the industry, the road to insider trading reform will remain unsettled.
In defending the House Republicans' success in derailing any vote on regulating the political intelligence industry for at least a year, House majority leader Eric Cantor said the focus needed to remain on the actions of Congress, not those seeking to influence it.
Critics of Cantor say his rhetoric can't hide the fact he has a dog in the race. The Virginian has received almost $40,000 in campaign contributions from Mark Gerson, leader of Gerson Lehrman Group - one of Washington's top political intelligence firms.