Congress backs off calling contractors lobbyists

Senators voted March 22 to side with the House and request a report on the ins and outs of political intelligence activities before defining them in its congressional insider trading bill.

The Senate passed the Stop Trading on Congressional Knowledge (STOCK) Act (S. 2038) by unanimous consent last Thursday. The bill’s aim is to stop insider trading by senior government officials. However, unlike the Senate’s original, this bill didn’t include a provision that would have required analysts to register as lobbyists even if they communicate with the executive or legislative branch officials to inform business investment decisions for government suppliers. For example, companies talking with contracting officers or program managers about upcoming contracts.

The House’s version of the STOCK Act would have the Government Accountability Office assess the use of “political intelligence” first and then make recommendations on narrowing the definitions.

The change pleased industry groups that were concerned private-sector business analysts might be deemed lobbyists. The Acquisition Reform Working Group, a conglomeration of eight industry groups, sent letters Feb. 16 to members of Congress, urging them to rework a broad definition of “political intelligence consultants.”

“Congress clearly heard our warnings of the potential negative implications,” said Trey Hodgkins, senior vice president of national security and federal procurement policy at the TechAmerica, a member of the Acquisition Reform Working Group.

Based on the earlier version of the Senate’s bill, a political intelligence contact would be any communication to or from certain officials that is intended for use in informing investment decisions.

Hodgkins said in a previous interview that congressional staff members had analysts at hedge funds in mind, not business analysts.

Sen. Charles Grassley (R-Iowa), ranking member of the Finance Committee, said during a floor speech March 22 he  disagreed with removing the provision.

“They took a common sense provision supported by a majority of both houses of Congress, and they simply erased it," he said.

He spoke about claims that “an unnamed House Republican” forced the Senate into passing the STOCK Act without the definition by threatening to object to a conference regarding the bill.

When both chambers pass similar legislation, they use a conference committee to iron out the differences in order to send the president one bill.

The bill has passed through Congress. Now, it will go to the White House for President Barack Obama’ signature. In January, the Obama administration showed support for the bill.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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