Congress has claimed that they can’t be investigated for insider trading, and presumably any other crimes they might engage in, due to the nature of their work within special lobbies.
A brief recently came to light from last summer where lawyers for the House claimed that an investigation probe by the SEC of a congressional member for insider trading should not be permitted because it violates the separation of powers between the executive and legislative branches.
Because the probe sought to investigate communications between lawmakers and “political intelligence” lobbyists.
These types of lobbyists are different than regular lobbyists – little is know about them and they don’t have to file the traditional mandatory lobbying disclosure reports.
So, Congress can break any law they want to when engaging others in “political intelligence” lobbies because they are…secretive. Right!
More from The Intercept:
In 2012, members of Congress patted themselves on the back for passing the STOCK Act, a bill meant to curb insider trading for lawmakers and their staff. “We all know that Washington is broken and today members of both parties took a big step forward to fix it,” said Rep. Bill Johnson, R-Ohio, upon passage of the law.
But as the Securities and Exchange Commission made news with the first major investigation of political insider trading, Congress moved to block the inquiry.
The SEC investigation focused on how Brian Sutter, then a staffer for the House Ways and Means Committee, allegedly passed along information about an upcoming Medicare decision to a lobbyist, who then shared the tip with other firms. Leading hedge funds used the insider tip to trade on health insurance stocks that were affected by the soon-to-be announced Medicare decision.
Calling the SEC’s inquiry a “remarkable fishing expedition for congressional records,” Kircher and his team claimed that the SEC had no business issuing a subpoena to Sutter. “Communications with lobbyists, of course, are a normal and routine part of Committee information-gathering,” the brief continued, arguing that there “is no room for the SEC to inquire into the Committee’s or Mr. Sutter’s purpose or motives.”
Wall Street investors routinely hire specialized “political intelligence” lobbyists in Washington to get insider knowledge of major government decisions so that they may make trades using the information. But little is known about the mechanics of political intelligence lobbying, which falls outside the scope of traditional lobbying law, and therefore does not show up in mandatory lobbying disclosure reports.
There are occasional hints, though.
Personal finance forms reveal that from July of 2011 through May of 2013, David Berteau served as a consultant to Height Analytics, the political intelligence firm at the center of the SEC’s current probe. At the time of his work for Height Analytics, Berteau simultaneously worked as a vice president at the Center for Strategic and International Studies, a prominent think tank in Washington. Berteau is now the Assistant Secretary of Defense for Logistics and Materiel Readiness.
Congressional travel forms show that on December 12, 2012, Emily Porter, at the time an employee of Boehner’s office, traveled to New York on a sponsored trip to meet with JNK Securities for a group lunch with business clients. According to the Wall Street Journal, JNK “has emerged as one of the most aggressive” political intelligence firms on Capitol Hill.