Congress is about to open a new, real-time window into its members' stock trades, real estate deals and other financial transactions, allowing anyone to view the information online within weeks of the investments.
The frequent reporting requirement also will cover top congressional aides and other senior government officials, including the president and the vice president — about 28,000 executive branch employees by one count.
Making lawmakers and other officials report their investment transactions every 30 days or 45 days, depending on the final language, is a key component of legislation explicitly prohibiting them from trading on insider information.
Both the House and Senate overwhelmingly approved different versions earlier this month and final passage is expected soon. The next step is up to Senate Majority Leader Harry Reid, D-Nev., who can bring the House's slightly narrower version to a vote or let a House-Senate conference work out the differences.
Insider trading is already illegal and there's no exemption for government officials. But the perception persists that it's taking place in the halls of Congress, perpetuated by occasional investigations and media reports of key lawmakers buying, selling or holding stocks or real estate in areas where they influence policy.
The Office of Congressional Ethics is now looking at the trading activities of Rep. Spencer Bachus, R-Ala. In the two months surrounding the 2008 financial collapse and subsequent $700 billion bailout passed by Congress, he made more than three dozen trades.
Bachus, now chairman of the House Financial Services Committee but then its senior Republican, participated in closed briefings on the crisis by Federal Reserve Chairman Ben Bernanke and then-Treasury Secretary Henry Paulson. He's denied using inside information, and subsequent records show he incurred a net loss of $19,490.
With Congress enjoying only a 19 percent approval rating, according to the latest Associated Press-GfK poll, lawmakers are eager to be seen as reformers early in an election year. Timely exposure of their own financial transactions is a step in that direction, according to watchdog groups.
"The reporting requirement is the best part" of the insider trading law, said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington. "People will know what members and staff are buying and selling. If they're profiting through their positions in Congress, that will be revealed."
Sloan said groups like hers also will be comparing the members' reports with matters before the committees on which they serve. "There certainly will be complaints filed," she predicted. "There will be a deterrent effect from engaging in misconduct."
John Wonderlich, policy director at the Sunlight Foundation watchdog group, agreed. "The primary impact will be behavioral. Since major transactions will be disclosed monthly, the unethical choice becomes slightly less attractive," he said.
Bill Allison, editorial director for the Sunlight Foundation, said his organization might look for unusual trades by lawmakers.
"If lots of people are buying Apple and members of Congress are dumping Apple, we would want to look at that," he said.
Alabama Sen. Richard Shelby said ethics can't be legislated "but you can tighten reporting and make it tougher to cheat."
But Shelby, the top Republican on the Senate Banking Committee, is skeptical that the bill will alter people's view of lawmakers. "Congress has been the whipping boy for a long time. One bill won't change a lot of it," he said.
Members of Congress and top aides now file disclosure forms once a year. While the House clerk posts the filings online, the Senate still requires people to come to a Senate office building in Washington to look up a report.
The annual reports usually are released in mid-June, and they cover the previous calendar year. That means a report covering 2011 isn't filed until May 2012 and isn't publicly disclosed until a month later. A January 2011 transaction could be nearly a year and a half old before the public might learn of it.
Despite the added transparency, some members of Congress said they don't believe the frequent reporting is needed.
"I don't think it's necessary to impose that extra step," Sen. Frank Lautenberg, D-N.J., said, while adding that he would comply.
Sen. Charles Grassley, R-Iowa, a farm owner, chuckled that he has one asset that won't be traded. "When you buy a farm, you buy a farm forever. You don't sell it," he said.
Grassley's 2010 transactions were in mutual funds. While the House and Senate ethics committees would have to work out the precise transaction reporting rules, the legislation would only exempt publicly traded, widely diversified mutual funds in which the individual has no control over the assets. That would mean real estate deals would be reportable, and so would sector funds that are not widely diversified, such as those holding only high-tech stocks.
Rep. Howard Berman, D-Calif., joked that the requirement won't be a burden for him.
"Since I do none of my own trading and have some guy who does it, it's a burden on him," Berman said. He took the extra step, not required, of attaching his broker statements showing dozens of transactions to his 2010 disclosure form.
Rep. Darrell Issa, R-Calif., one of the richest members of Congress, said he supports the legislation but urged his colleagues to think carefully about what they're doing.
"The last time an ethics bill was rushed through Congress, it erroneously banned members of Congress who had their pilot's licenses from flying their own private planes," he said. "Past history has shown that tough-sounding measures often don't address ineffective enforcement mechanisms or help sort out real abuses of the public trust from everyday mudslinging."