Insider Trading Is OK If you’re a member of Congress.

Tuesday, August 11, 2009

Insider Trading Is OK If you’re a member of Congress.

A loophole "still exists which allows members of Congress and high-powered executive branch appointees to exploit 'insider' knowledge of the financial industry in order to turn personal profit."

Little-known fact: Members of Congress are exempt from rules that prevent insider trading.

Or so says the left-leaning advocacy group Public Citizen in a July 10, 2009, e-mail sent to supporters.

"The federal government has finally got the message that it’s time for stronger oversight of Wall Street and the financial services sector. It’s also time to put an end to secret spending and insider trading," the e-mail reads. "A dangerous legal loophole still exists which allows members of Congress and high-powered executive branch appointees to exploit 'insider' knowledge of the financial industry in order to turn personal profit."

It goes on to describe an army of lobbyists and traders who "haunt the halls of Congress seeking insider tips from staff — known as 'political intelligence consultants'" who may also use the confidential information.

The e-mail asks supporters to write their representatives to support the Trading on Congressional Knowledge Act, a bill sponsored by Reps. Louise Slaughter of New York and Brian Baird of Washington, that would ban insider trading by lawmakers, members of the executive branch and staff, and require that they publicly disclose stock trades of more than $1,000 within 90 days. It would also require the "political intelligence consultants" to register as lobbyists in both chambers of Congress.

We hadn't heard the allegation that members of Congress had a leg up for insider trading and wondered if it's true.

Thomas Newkirk, a partner with the law firm Jenner and Block, told us that indeed there's some uncertainty about how insider trading rules impact members of Congress and their staff.

For example, in 2001, a financial consultant meeting with the Treasury Department learned that the department planned to kill off the 30-year bond. In turn, the consultant tipped off traders at Goldman Sachs who proceeded to use that information to make the firm lots of money. It was considered insider trading because the consultant knew he was not supposed to release the information, Newkirk said. Federal regulators settled with Goldman Sachs and the consultant for about $10.3 million in September 2003.

But with members of Congress, it's different. Unless lawmakers have some express confidentiality agreement — whether it's in writing or in word — they can do whatever they want with the information they obtain on Capitol Hill, Newkirk said.

Bruce Carton, a former Senior Counsel with the SEC's enforcement division and current editor of Securities Docket, agreed there is uncertainty about the rules. "Insider trading depends on some kind of duty. You can steal information, but unless you have some sort of duty of confidentiality to it, you're not going to be held liable," Carton said.

Right now, there is no duty of confidentiality for Congress, their staff or executive branch employees, he said.

"It may be unethical, and it may be unseemly, but it's not illegal," Carton said.

So yes, it seems there is a way for members of Congress to engage in insider trading. Whether they are actually doing it is another story. So far, there are no specific examples of lawmakers engaging in "secret spending and insider trading," as the e-mail indicates. But for its factual claim, we give Public Citizen a True.

Source: Politifact

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Top 11 Reasons You Should Fight Hate Laws

Unless we resist now, a thought crimes bureaucracy like those regulating Australia, Canada and Europe will soon rule America. In these nations, federal hate laws have destroyed citizens' rights to free speech. Punishment of politically incorrect bias is the ultimate goal of this legislation.

A national hate law would shatter Americans' First Amendment rights, which are now sadly unique among Western democracies. We would lose our precious freedom to express politically incorrect ideas, moral judgments, or whatever personal convictions the reigning thought police deem "hateful."

Think this can't happen in America? Think again.

Hostile work environment law and campus speech bans already severely curtail free expression in American workplaces and universities. A US federal hate law would follow the examples of Europe, Canada, and Australia where Christian pastors have been indicted simply for quoting politically incorrect Scripture in their sermons. Iceland's Orwellian hate law, for example, promises two years' jail if you verbally "insult" a person on the basis of their nationality, skin color, race, religion, or sexual orientation.

If a federal hate law were passed, free expression across the political spectrum would be threatened. What would happen to blasphemous art like Piss Christ or South Park, to Ann Coulter or Al Franken, to Christians protesting sodomy or homosexuals attacking the Bible? Every American, from left-leaning feminists to red state Republicans, should protest "anti-hate" legislation. If Rosie O'Donnell were an Icelander, she could have been prosecuted for verbal "assault" for her recent statement that radical Christianity is as dangerous as radical Islam. Political activists in nations with hate laws have already been indicted for criticizing Islam, Zionism, and homosexuality. Hate laws threaten your freedom to speak your mind, no matter what's on it.

Here are some of the most powerful, bipartisan reasons to fight this legislation.

1. Speech bans are a political weapon used by those in power to silence their opponents and politically unpopular minorities.

Hate laws empower the government to enforce the orthodoxy of whoever happens to be in charge. The government can define which biases or "hatreds" are unacceptable and which are okay. For instance, hate laws in our PC age allow women to derogate men but would silence men from legitimate (though possibly hurtful) speech like a discussion of biological gender differences.

In 2004 Swedish feminist Joanna Rytel wrote a hate-filled screed published in a major daily. Her article describes white men as arrogant, sex-obsessed and exploitative, explaining that Rytel just wants to "puke" on them. Stockholm authorities refused to indict Rytel under their hate law, saying it was passed to protect ethnic minorities, not white Swedes. This is one example of speech bans' uneven enforcement; they are used to punish certain kinds of hate and allow others.

Because almost every exercise of free speech offends someone, government officials would end up enforcing speech bans on the basis of their own bias. Speech bans simply can't be evenhanded unless everyone is shut up altogether.

In the real world, speech can and does wound. That's a cost of life. We naturally resent painful realities like economic competition, unfair comments, and hard work. But in each case, the cures we've tried were far worse than the sickness. Speech bans might censor some hurtful speech but would empower government to silence minorities and strip the intellectual marketplace of legitimate and needed expression-the kind that creates positive, social change precisely because it is minority and challenges the sins of the group.

2. Hate speech bans don't work.

Genuine racism and false hatreds exist in this world. Bans on hate speech, however, won't solve the problem. If you only break off a tick's body, its head will burrow deep beneath the skin. The only effective response to bad ideas is the truth. We should combat falsehoods with more and freer discussion, not less.

3. Hate laws aren't necessary.

ADL claims an epidemic of hate sweeps America that can only be fought with stiffened penalties for bias-driven crimes. Yet the FBI's 2005 Uniform Crime Report shows alleged hate crimes form a tiny 1/15 of 1 percent of all crime in America. Law enforcers' time would be far better spent fighting the 99.85 percent of crime that's happening every minute across our nation rather than getting entangled in discerning and testifying against the perceived motivations of a tiny minority of criminals.

Hate laws would require vast government bureaucracies, complicate law enforcement, and distract police and prosecutors from dealing with actual physical crimes. Government and law enforcement should focus on criminal acts, not words or motivations, in a nation where someone is murdered every 22 minutes, raped every 5, robbed every 49 seconds and burgled every 10 seconds. Discerning and prosecuting criminal motivations would only be a good plan if law enforcers had God's omniscience and time to waste. Ours have neither.

4. Hate speech bans are unconstitutional.

Because the First Amendment underwrites our most precious civil liberty, the US Supreme Court has repeatedly ruled against speech bans. In 1972 the Court declared, "[A]bove all else, the First Amendment means that government has no power to restrict expression because of its message, its ideas, its subject matter, or its contents." (Police Department of Chicago v. Mosley, 408 U.S. 92)

Some forms of speech are restricted; these include threats and "fighting words" that incite "an immediate breach of peace." But these restrictions are (and must remain) extremely narrow and content-neutral-the government is not allowed to censor speech based on the viewpoint it expresses but only on whether it constitutes an immediate threat. Hate laws, however, would punish the viewpoints expressed in speech, in violation of the Constitution.

International use of ADL-designed hate laws shows that the first kinds of speech to be sanctioned are extreme right, white nationalist speech and Holocaust reductionism. The average person is slow to defend such speech. But hate laws quickly broaden to punish forms of expression the average citizen would never dream of stifling. Sweden's 2002 modified hate law, for example, explicitly exposes Christian sermons to prosecution!

All forms of controversial political and religious speech are potentially vulnerable to prosecution under hate laws. This contradicts Supreme Court Justice Holmes Jr. who said in 1929, "[I]f there is any principle of the Constitution that more imperatively calls for attachment [loyal defense] than any other, it is the principle of free thought-not free thought for those who agree with us but freedom for the thought we hate."

5. Speech bans will be used against the very minorities they were meant to protect.

Speech bans silence some to protect the feelings of others. But when the government has power to silence expression that power can be wielded against the very people who once enjoyed its protection. Liberals, the champions of unrestrained speech in the 1960s, now vote as a bloc in Congress to support speech restrictions. Yet already in countries such as Canada, England and Australia, leftist critics of Islam have become the victims of hate laws, indicted for religious "hate speech."

Leftist artists Rowan Atkinson and Salman Rushdie realize hate laws don't just threaten white nationalists like David Duke but liberals as well- they recently fought for revision of Britain's hate law because it could be used to outlaw art that blasphemes or criticizes religion. Atkinson and Rushdie are just a few of hate laws' leftist critics who know that persons of all political persuasions have a stake in defeating this legislation.

6. Speech bans chill legitimate and valuable speech.

Under the threat of possible indictment, many people will refrain from discussing controversial but important ideas. Speech bans are often broad and vague, leaving citizens unsure what might get them hauled into court.

This is what has happened in American workplaces, where hostile work environment law has left many employees unsure what they can say. Many Americans avoid all controversial speech and voluntarily refrain from exercising First Amendment rights at work. Hate laws would extend this dangerous minefield to the national political scene.

Legal philosopher Edmond Cahn points out that speech bans would leave our bookshelves empty. "[T]he officials could begin by prosecuting anyone who distributes the Christian gospels, because they contain many defamatory statements not only about Jews but also about ChristiansThen the officials could ban Greek literature for calling the rest of the world "barbarians." Roman authors could be suppressed because when they were not defaming the Gallic and Teutonic tribes, they were disparaging the ItaliansThen there is Shakespeare, who openly affronts the French, the Welsh, the Danes" (Beyond the Burning Cross, E. Cleary, Random House, 1994)

7. Speech bans greatly reduce the possibility of healthy, democratic change.

Criminalizing speech that expresses "hate" or "bias" would require us to outlaw history's most valuable speech, especially the political and religious speech that threatens social stasis and ignites progress.

Aggressive speech is often the only tool available to political, social, or religious minorities whose access to government lobbying and mass media is limited. Those agitating for social change often need to use inflammatory and even "hateful" language to startle the public into hearing their message. Socrates compared himself to a horsefly biting the lazy flanks of his republic. We should certainly know enough by now to prefer the annoyance of stinging speech (even when we don't see its value) to a tyrannical majority that plods, unchallenged, toward slavery.

Americans are so used to our mudslinging, no-holds-barred political discourse that we find it hard to envision the way freedom of speech could disappear. But the freedom we enjoy is extremely rare in history, and quickly lost. Free expression for intellectuals is the first thing to go when tyrants rise to power; the history of oppressive regimes makes it clear that freedom of political speech is a delicate exception and the overarching tendency is for majorities or elites to get power and silence all opposition.

8. The government's interest in reducing violent crime does not outweigh our interest in preserving civil liberty.

Hate law advocates including the ADL argue that hateful speech incites violence, and appeal to the government's interest in reducing violent crime. But it would be unfair to ban, for instance, white racist speech or Christian sermons against homosexuality without also banning the plethora of other speech that might incite crime. Gangsta rap and videogames would be open to censure; we would also have to ban pornography, especially sadomasochistic porn, which certainly inspires violence against women.

Yet bans against these kinds of speech have been repeatedly declared unconstitutional. The government has an interest in lowering violent crime of all stripes but has always found the value of the First Amendment to be greater. It's unjust to argue that a few kinds of speech must be banned because they possibly incite violence (e.g., criticism of Jewish actions or homosexuality) yet permit huge categories of speech (violent sexual entertainment) that do the same. This would happen, however, under hate laws' unequal and partial enforcement. The ADL is not truly driven by the desire to reduce violent crime but rather to enforce a social and political orthodoxy.

Instead of passing a hate law that would shatter the First Amendment and impossibly complicate law enforcement, people concerned with hate-driven crimes should focus on improving our existing justice system and making sure hard crimes don't go unpunished.

9. Speech bans are offensively paternalistic.

They presume we can't think for ourselves, reject racist or hateful ideas for ourselves, or deal with the hurt caused by others' free expression. Are we such children that we need the government to cover our ears? Speech bans especially condescend toward the minorities they portray as helpless victims whose feelings must be sheltered from ideas they can't combat in a free intellectual market.

10. Speech bans permit government to do something an individual could not morally do.

Frederic Bastiat's classic treatise on The Law says government exists only to prevent injustice by defending our basic rights to person, liberty, and property. Government does not exist to guarantee our economic outcomes, redistribute our wealth, or protect our psyches. Speech bans would empower government to silence individuals by force. This is immoral whether it's one person silencing another person or the government silencing a fringe group of dissenters. Human fallibility requires at least enough humility to allow others to question, challenge, and dissent from our ideas. John Stuart Mill explains, "If all mankind minus one, were of one opinion, and only one person were of the contrary opinion, mankind would be no more justified in silencing that one person, than he, if he had the power, would be justified in silencing mankind."

11. Speech bans deny self-determination and individual freedom by criminalizing self-expression.

By censoring speech, hate laws censor thought and restrict our access to ideas. This is the essence of mind control. They deny the personal growth that comes from sharing ideas-including hateful, prejudiced, or false ideas-and having them challenged in a free intellectual marketplace.

Hate law speech bans have been repeatedly declared unconstitutional and would rend the very foundation of our freedom and democracy. Far from combating hate, The Local Law Enforcement Hate Crimes Prevention Act is actually the most hateful and enslaving legislation to ever reach Congress; it would invade states' rights in law enforcement, enabling a hate crimes bureaucracy to police our thoughts and expression. Government could censor by force all speech that dissents from the reigning orthodoxy. Every American must speak up now in defense of the freedom for which our forefathers gave their very lives.

Freedom of expression is one of the most fundamental rights that individuals enjoy. It is fundamental to the existence of democracy and the respect of human dignity. It is also one of the most dangerous rights, because freedom of expression means the freedom to express one's discontent with the status quo and the desire to change it. As such, it is one of the most threatened rights, with governments - and even human rights groups - all over the world constantly trying to curtail it.

Make your voice heard today or it will be silenced tomorrow.

Fredrick Douglas

"Those who profess to favor freedom, and yet depreciate agitation, are men who want crops without plowing up the ground. They want rain without thunder and lightning. They want the ocean without the awful roar of its waters. This struggle may be a moral one; or it may be a physical one; or it may be both moral and physical; but it must be a struggle! Power concedes nothing without a demand. It never did, and it never will. Find out just what people will submit to, and you have found out the exact amount of injustice and wrong which will be imposed upon them; and these will continue until they are resisted with either words or blows, or with both. The limits of tyrants are prescribed by the endurance of those whom they oppress."

Tuesday, August 11, 2009