Dana Bash and CNN have discovered that the new law forbidding members of Congress, their staffs and families from trading on insider information gleaned from their work has a massive loophole, one that was engineered by Eric Cantor and his office. The loophole is reflected in instructions about the bill sent out by the House Ethics Committee, which exempts family members of representatives from any requirement that they report stock transactions over $1,000 within 45 days.
In the Senate, the Ethics Committee released one page of guidelines last month ruling that members, their spouses and dependent children all have to file reports after they make stock or securities trades. The House Ethics Committee disagreed, sending out a memo saying that while House members and aides are covered by the law, their spouses and children aren’t covered. It seems that the bill, which originated in the Senate, was quietly changed by shuffling around sections in the House version. Those changes made it into the final law.
When confronted by CNN with the information it had uncovered, Cantor’s office admitted it had made changes to the bill when the House took it up, changes that removed the requirement for spouses and children to file these reports. One reason this smells so bad is the fact that Eric Cantor’s wife makes a lot of money by advising wealthy clients on investments and by trading herself. (Not to mention that Bob McDonnell named her to head the Virginia Retirement System)
Without the reporting requirement for spouses, all Cantor has to do tell his wife any insider trading information he gets, and she’ll be able to secretly make the deal.
The Senate co-sponsors are angry about the whole episode. The law was one of the tiny number of bipartisan bills to become law this year. It was co-sponsored by Sen. Kirsten Gillibrand (D-NY) and Sen. Scott Brown (R-MA).
Gillibrand stated, “The whole point of this legislation is we should play by the exact same rules as every other American citizen, and when all of America looks at Washington, they know it’s broken. We’re trying to restore just a small measure of confidence through this kind of transparency and accountability.”
In a letter to Cantor, Scott Brown said, “The House interpretation leaves a loophole and the appearance of an ongoing double standard. It is deeply troubling that the House of Representatives…would attempt to operate under a substantially weaker interpretation than the Senate.”
For many of us Virginians, we didn’t need further proof that Eric Cantor is untrustworthy and totally self-serving. However, he has given us yet another example to cite. Virginia’s 7th District needs to retire Cantor and get new representation.