Joseph Lieberman

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, this has been a good, open process. We had a good bill that came in. We made it better. I yield back the remainder of my time.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate, on February 2, 2012, at 10 a.m.

Mr. LIEBERMAN. Mr. President, I ask unanimous consent that the Committee on Energy and Natural Resources be authorized to meet during the session of the Senate on February 2, 2012, at 9:30 a.m., in room 366 of the Dirksen Senate Office Building.

Mr. LIEBERMAN. Mr. President, I ask unanimous consent that the Committee on Health, Education, Labor, and Pensions be authorized to meet, during the session of the Senate to conduct a hearing entitled ``Innovations in College Affordability'' on February 2, 2012, at 10:20 a.m., in room 430 of the Dirksen Senate Office Building, to conduct an executive business meeting.

Mr. LIEBERMAN. Mr. President, I ask unanimous consent that the Committee on Indian Affairs be authorized to meet during the session of the Senate, on February 2, 2012, at 2:15 p.m. in room 628 of the Dirksen Senate Office Building.

Mr. LIEBERMAN

Mr. LIEBERMAN. Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. LIEBERMAN

Mr. LIEBERMAN. Madam President, it is a new day and with it comes the hope we will make more progress than we did yesterday. Actually, we were prepared, after some good work by the four of us--Senator Collins; Senator Brown; the occupant of the chair, Senator Gillibrand; and myself--and our staffs to move forward yesterday afternoon. Unfortunately, we were blocked in that. But I know efforts continue to allow us to at least proceed with the amendment Senator Paul offered that was modified--or prepared to be modified, after discussion, with a reasonable conclusion that I think will be supported by most Members of the Senate. There is so much we can do. Our staffs worked overnight. They have tried to divide the amendments into those that are germane and relevant and those that are not. I understand leadership on both sides will be talking about how to proceed. I repeat what I said at the outset--and I know all of us who have worked so hard to respond to the concern that Members of Congress and our staffs are not covered by insider trading laws--that we not try to solve every problem or correct every potential source of public mistrust of Congress on this bill for fear that we will, therefore, never get anything accomplished. I am hopeful, as the morning goes on and certainly into the afternoon, after discussions that occur at the lunch hour, we will be able to proceed to handle some amendments in an expeditious way and that we can see our way to the end of consideration of this bill, remembering that on the basic provisions of the bill we have overwhelming bipartisan support. I understand the vote on cloture to proceed to the bill does not exactly express support for the final vote, but there were only two who voted against cloture, so clearly an overwhelming number of Members of the Senate want to proceed to vote on the bill. If we do not break this unfortunate and unnecessary and harmful gridlock, either the majority leader is going to have to file cloture or leave the bill and go on to other pressing business--FAA reauthorization and the like--and that would be not only disappointing to us, but having aroused the hope that we would respond to the public concern and anger about the possibility that we are not covered by insider trading laws, we will have ended up increasing that concern and anger and disenchantment with Congress. I do not think any of us want to do that. With that appeal to our colleagues to apply a certain rule of reason so we can get something done that will be good for our government and the people's respect for us, I am very pleased to see my colleague from Connecticut, Senator Blumenthal, in the Chamber. I know he has an amendment he wants to offer at this time, and I will yield the floor to him.

Mr. LIEBERMAN. Madam President, I thank my friend from Alabama for coming to the floor and proposing his amendment. I agree that there should be parity between the legislative and executive branches wherever it is appropriate. I am very happy to work with him. I must say that yesterday we made some progress on a somewhat similar amendment by Senator Paul to appropriately scope the amendment on requiring executive branch officials to report on their financial transactions to Senate-confirmed positions. I don't know whether that is the resolution here, but I think we should work on it. I want to state for the record that the executive branch is not free of conflict- of-interest regulations. In fact, in some sense you might say they have tougher restrictions. Even the SEC employees have to get permission before they can make stock transactions, and then they have to file disclosures not within 30 or 10 days but within 2 days, I believe. There are many other regulations on them. I think part of what is going on here is the nature of the two branches of Government to deal with conflicts of interest. We have focused on a system of disclosure and transparency. We have embraced the adage that sunlight is the best disinfectant. In contrast, the executive branch actually addresses potential conflicts of interest through not just transparency but statutory mandates that require the divestiture of stock when it may involve a conflict of interest and recusal being involved in handling anything that relates to any personal interest that an individual in the executive branch has. There is a very extensive system of high-ranking agency officials being forced to divest themselves of conflicting stock holdings--obviously, sometimes at a financial loss. There could be an amendment to come up on that. But to do it in exactly the way--at least on the recusal section--the executive branch does it would not be appropriate for Members of Congress because Members are called on to vote on issues across the widest array of activity. Recusal, therefore, is not a viable option because it would deny our constituents representation and our votes on a very wide array of public issues. An amendment on divestiture of blind trusts or mutual funds is another question. But the main point I wanted to make is there is a lot of regulation on the executive branch. The ethics rules, requirements, and guidance that have been put forth over the years by the Office of Government Ethics and at the agencies are extensive. I know volume of pages of law isn't everything, but it says a lot. There are six pages in the Senate Code of Conduct that cover conflicts of interest, while there are literally hundreds of pages of rules and requirements governing such conflict of interest situations for the executive branch. The amendment offered by the Senator from Alabama, as drafted, would require that the annual filings of over 300,000 career civil servants and managers be published on the Internet. That is a lot of people and a lot of work to be done to process and handle those. But I understand the intention of Senator Shelby. I think it is a good intention. Senator Wyden has a similar amendment, and I wish to work with them, as I know Senator Collins would as well, to see if we can come to some meeting of the minds that would allow us to achieve the purpose we all have in the underlying bill, which is to build confidence in our government and its integrity.

Mr. LIEBERMAN. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. LIEBERMAN. Mr. President, for the information of our colleagues, productive work is going on to try to reach a final list of amendments for the STOCK Act and to have an agreement which will come up for a vote, and to have that obviously by a bipartisan agreement. We are making progress. I hope we can continue to do that. Order for Recess I ask unanimous consent that the Senate recess from 4 to 5 p.m. so that all Senators can attend a classified briefing.

Mr. LIEBERMAN. Mr. President, I suggest the absence of a quorum.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, while the majority leader is here, I wished to thank him for the work he and his staff have continued to do to enable us to get to a vote on this bill, which most everybody in the Senate supports, to make it clear that Members of Congress and our staffs are covered by anti-insider trading laws. Senator Gillibrand, Senator Collins, and Senator Brown have all been working to bring this to an end and give Members on both sides the opportunity to introduce amendments. Senator Reid has been showing great forbearance in not moving to file a cloture motion. In some sense, this is a test of whether we can all apply to ourselves a rule of reasonableness so that there can be a pretty open amendment process, but one that does not stop the Senate from getting something accomplished. I share the leader's optimism. There is only one obstacle now to having an agreement and, hopefully, we can begin voting tomorrow afternoon and get it done before we finish.

Mr. LIEBERMAN

Mr. LIEBERMAN. Mr. President, what is the regular order, may I ask?

Mr. LIEBERMAN. I thank the Chair. So we are on the STOCK Act and Senator Leahy has introduced this amendment, which I appreciate that he has done that. This underlying bill, as we said yesterday, responds to the concern about whether Members of Congress and our staffs are covered by insider trading laws; that is, laws that prohibit a person from using nonpublic information for private profit. I suppose most of us here believed we have always been covered by insider trading laws. There were some questions raised about that at the end of last year. In fact, our committee held a hearing on two bills offered, one by Senator Kirsten Gillibrand of New York, the other by Senator Scott Brown of Massachusetts, on this question, and we had some broadly respected, credible experts on securities law who said in fact there might be a question about Members of Congress, whether Members of Congress and our staffs were covered by Securities and Exchange Commission law and regulation on insider trading for a reason that would only make sense to lawyers and therefore may not be sensible but I will mention it anyway. It is that the law relating to insider trading is actually the result not of a specific statute prohibiting insider trading, it is the result of regulations and enforcement actions by the SEC pursuant to antifraud provisions of the Securities Exchange Act of 1934. In these regulations that have become the law of insider trading, a necessary element for prosecution for violating insider trading laws is the breach of a duty of trust, of a fiduciary duty. The law professors told us at our hearing at the end of last year that in fact one might raise the question of whether Members of Congress had a duty of trust as defined in insider trading cases, which is more typically the duty of trust that a corporate executive, for instance, has to stockholders. I presume that most Members of Congress would say of course we have a duty of trust, we have a very high duty of trust to our country, to our constituents. But it is, apparently, in the contemplation of securities law, perhaps not covered by the existing definitions, so this bill makes clear that Members of Congress and our staffs are covered by insider trading laws. We cannot derive personal profit from using nonpublic information that we gain as a result of our public offices. That is made absolutely clear by stating that indeed we do have a duty of trust to the Congress, to the government of the United States and, most importantly, to our constituents, to the people who were good enough to send us here. I do believe that provision gives us an opportunity to take a step forward. It is going to take a lot more than one step to rebuild the trust and confidence that the American people have lost at this moment in our history in Congress and in our overall Federal Government. There are two other very important provisions. One requires Members of Congress and our staffs to file a statement within 30 days of any transaction, purchase, or sale of a stock or other security with the Senate--and that would immediately go on line, as will now, as a result of this legislation, the annual financial disclosure statements that we file. Incidentally, these statements are now available to the public but you have to go to the office here in the Senate to get them and copy them. That is out of date and not consistent with the general principles of transparency and disclosure that I think people rightly expect of Congress today. Our bill makes clear that both the annual statements and the 30-day statements have to be filed on line. That should help provide the transparency that the SEC itself has said--in testimony before the House of Representatives on this bill or one quite similar to it--would assist them, the SEC, in guarding against insider trading by Members of Congress or our staffs; that is, that the regular reporting, the 30-day reporting and the on-line reporting, would assist them in preventing insider trading. I know there are a lot of amendments filed; actually, thankfully, not too many, but a significant number. Seeing the presence of the Senator from Oklahoma, I hope he may be here to take up one of his amendments. Obviously we would all like to begin to debate the amendments and have some votes. I yield to the Senator from Maine, Senator Collins.

Mr. LIEBERMAN. Mr. President, I thank Senator Coburn. Let me go back to the first point, but it is not the question he ultimately asked. The Senator is raising a very high standard because I hope nobody is involved in insider trading as a Member of Congress. I presume they are not. There were some serious allegations made last year by people outside Congress against Members of--certain Members of Congress, a small number. They have been denied and responded to by those Members. I presume that if there is any substance to them, the SEC will be investigating and take action. But obviously, necessarily, for dealing with insider trading, we would not know it is going on because they are using nonpublic information privately to secure private profit. So, as the Senator from Oklahoma well knows, the purpose of the law is to make sure that if anybody is doing this--and again, I know the people here, this is an honorable group of people, but if anybody is acting dishonorably--human nature being what it is--and a prosecution is brought by the Securities and Exchange Commission, then there won't be any defense that the law doesn't cover Members of Congress. It is simple as that. But let me come to the other point. I know there is a lot of unease amongst some Members about the 30-day requirement in this bill, which is that within 30 days one has to file a disclosure of any trade in a stock or security that a Member has been involved in that has a value of more than $1,000. There is a lot of concern about the requirements that will put on Members. Ultimately, the Ethics Committee will adjudicate this. I assume there would be some rule of reasonableness if an unintentional error was made, and I certainly am happy to try to clarify in report language what our intention is, but the overall intention is to create transparency. While I am on this--and I will be very brief with this--I know that people are worried about what it will take to fulfill this requirement and that it is in some sense unfair to ask Members of Congress to have to disclose stock purchases or sales within 30 days. But it is my understanding that people defined by law as corporate insiders have to declare it within 48 hours of trades they make in their company stock. The staff of the SEC have to publicly declare their trades within 5 days. So it is possible to do this. I gather it is possible to do it by simply asking whomever trades for you to copy the office here in the Senate when a transaction occurs, and then it automatically goes into a database online. We are asking more, and for some it will be an inconvenience. But we are different. We hold a public office. We have a public trust and public responsibility. So that is why this provision was in the original STOCK Act introduced in the House, bipartisan, and here in the Senate, both by Senator Gillibrand and Senator Brown. But I do want to state I am happy to work with the Senator from Oklahoma on report language that will encourage the Ethics Committee to apply a kind of rule of reason if there is an unintentional violation of that 30-day reporting requirement.

Mr. LIEBERMAN. Mr. President, first let me thank Senator Collins for making these points because there is concern about this particular part of the bill. There is a lot of misinformation around. I totally agree with her interpretation, which is that the reporting on the 30-day basis in the bill will not change what is reported and therefore both transactions within Thrift Savings Plan accounts and in qualified mutual funds will not have to be reported. I thank my colleague for clarifying that.

Mr. LIEBERMAN. Mr. President, I rise to thank my friend from Oklahoma for coming to the floor and introducing these three amendments. It begins the process of considering the legislation. I wish to go back to the first point he made, which I think is an important point--that we have to do a lot more than deal with the concern that Members of Congress and our staffs are not covered by insider trading laws to restore the confidence of the American people in this institution. It has taken a long time to get us as low as we are in public esteem today, and it is going to take a long time, I am afraid, to get back to it. The first thing we can do is begin to work more across party lines to be less partisan, to be less ideologically rigid. This institution represents people across the widest array of origins, of ideologies, of political policy beliefs, et cetera. We can't function without compromise. When I say ``compromise,'' I don't mean a compromise of principle, I mean compromise in the sense that one can rarely in a democratic institution of this kind--small ``d''--get everything one aspires to get on a particular piece of legislation. If a person gets half of what they are aspiring to or even more, hopefully, that is a good result. It reminds me of what my dad used to say about marriage, which was that in a successful marriage a spouse felt they were giving in 70 percent of the time to the other spouse, and maybe that is a good guideline for a successful Congress. We are not doing that enough here, and we are particularly not doing it enough on the central question of the deficit annually and the debt overall. The public sees this, so they are upset. I wish to, therefore, put what we are doing in the STOCK Act in context. I think if we pass it, both because of the clarity with which we state that Members of Congress and our staffs are covered by anti- insider trading laws and the disclosure improvements we make in the law, we will take a step forward in beginning to rebuild some confidence the American people have lost in this institution, but, O Lord, it is only the beginning. The more we can deal particularly with the imbalances we have created in our Federal books, the more we are going to restore confidence in this institution. Also, I hope we can prove on this measure and any number of others that we are still capable of working across party lines to get things done. That is, after all, why our constituents sent us here. This is the beginning of my 24th year in the Senate. It has been a privilege. This is my last year in the Senate since I have announced I am not seeking reelection. I am forced to say that last year was the least productive of the 23 years I have been here. I hope we can perhaps on this bill prove, at least, that we can come together and get this done, and it will be the beginning of getting other much more important things done, including, as Senator Coburn has stated, doing something about the debt and the deficit. I have been privileged to work with him on some ideas we have put forward to make that happen. We can't do it and make everybody happy. We can't do it and make all the interest groups happy. But that is not why we came here. We came here to support and protect this extraordinary country of ours that we are blessed to be citizens of. So I say that by way of a first reaction. The second is that I wish to take some time in that context to take a look at amendments Nos. 1473 and 1474 that the Senator from Oklahoma has introduced, the first to prevent the creation of duplicative and overlapping Federal programs, and the second is this requirement that all legislation be placed online for 72 hours before voted on in the House and Senate. Both of these on first response have some merit, in my opinion. Certainly the first one has a lot of merit. I am concerned and I know all of us--meaning Senators Collins, Brown, and Gillibrand--who have worked to bring the main parts of the bill out are concerned that we not go too far afield in amendments to the bill for fear that it will weight it down and it will ultimately get stopped or, at worst, that the majority leader will take the bill off the floor because we are not coming to a point of completing our business because amendments keep coming in that are not relevant. But these are two serious amendments, and I want to look at them and take a little time to respond. The third, amendment No. 1476, I guess is a good news, bad news reaction that I have. The good news is that this really is directly relevant to the substance of the bill. The bad news, if you will, is that I am opposed to it because it really does--it is a totally different approach to what we are trying to do in the bill. I don't think it accomplishes the intention of most Members on this bill because it would really replace the entire STOCK Act with the requirement that Members or anyone in the government who has to fill out a financial disclosure form certify that they--we--haven't traded on inside information. I don't think as a result that the amendment does anything to clarify the current ambiguity in the law; that is, the question we heard raised before our committee by these experts on securities law about whether Members of Congress are really covered. If we don't clarify that we have a duty of trust to bring our behavior totally within existing securities law against insider trading, then I don't think the legislation would get us to where we need to go and we are still left with the kind of ambiguity that creates the kind of mistrust I know none of us want. We have spoken at length on this question with the Securities and Exchange Commission staff, and I must say they share the concerns I have just expressed and believe that if the legislation doesn't explicitly state that a duty of trust exists and is held by Members of Congress, then the legislation will not do what is needed to get at the problem, which is whether an insider trading case brought before a court could be objected to by a Member of Congress who is the target of that suit.

Mr. LIEBERMAN. Yes.

Mr. LIEBERMAN. Well, it would give me less heartburn, but it would probably still leave me needing at least a Rolaid.

Mr. LIEBERMAN. We should reason together. But, as the Senator from Oklahoma knows, there are three main parts to the STOCK Act. One is the declaration we have just talked about, and the second and third are disclosure requirements, one 30 days, and then the other is the online requirement. But I am glad to talk with the Senator about adding the requirement of a certification to the STOCK Act as opposed to substituting it for the whole STOCK Act.

Mr. LIEBERMAN. Mr. President, the Senator from Oklahoma is asking good questions. Let me say first, as a point of clarification, as a result of an amendment submitted in the committee by Senator Paul, and adopted, the insider trading parts of the bill do relate to executive branch employees. The 30-day disclosure requirement does not. I am happy to work with the Senator on this. I gather the administration itself applies certain disclosure requirements to a group of people in the administration at a Cabinet level or somewhat slightly below, but, obviously, not to all executive branch employees. But we can talk about this one. I continue to be concerned, overall, that we are going to extend this so far and make it so ``good'' that it is going to fall of its own weight and not make it through. But the Senator is raising a reasonable question, and Senator Brown and I just talked about it. We are glad to continue the conversation.

Mr. LIEBERMAN. That is right. We file annually.

Mr. LIEBERMAN. Mr. President, I thank my friend from Massachusetts. Seeing no one else seeking recognition, I suggest the absence of a quorum.

Mr. LIEBERMAN. Mr. President, let me join in what the Senator from Massachusetts said. Senator Begich, with Senator Tester, offered an amendment in committee that has not gotten as much attention as some other parts of the bill--but it will have at least as great a positive effect as the other parts of the bill--which is so simple that it makes you wonder why we have not done it before. I have been quoting Dr. Seuss lately, and I won't do it here, but there is a saying that sometimes the best answers to questions that are complicated are simple answers--something like that; I am losing something in the translation. But Senator Begich and Senator Tester require that the annual financial reports we file, which are public documents--for the public to see them, they or some representative have to go to the office of the Secretary of the Senate to look at them or make copies. We are in the information age, the digital age. So Senator Begich and Senator Tester took a small step on the bill--which is a large step for the American people--which is that these reports will now be online and electronically filed. Everybody, not just the SEC, will have immediate access to those financial disclosure reports. Incidentally, the 30-day provision for disclosure will also be covered by that, and will also be available. The Director of Enforcement, Robert Khuzami, of the SEC, testified before the House committee on the comparable bill that the 30-day requirement and the annual requirement for electronic filing would assist the SEC in carrying out its responsibilities. Once again, I thank the Senator from Alaska for his contribution to the bill.

Mr. LIEBERMAN. Mr. President, I suggest the absence of a quorum.