Government transparency

Senate votes to shield top officials’ financial disclosures

The Senate voted late Thursday to free thousands of federal government employees from having to disclose their financial dealings online, in a move that’s proving to be controversial.

The National Academy of Public Administration (NAPA) says posting all of that information online poses a national security risk. But the open-government group Sunlight Foundation says releasing staffers from online disclosure mandates eviscerates part of last year’s Stock Act, designed to stop insider trading by federal officials.

“Rather than craft narrow exemptions, or even delay implementation until proper protections could be created, the Senate decided instead to exclude legislative and executive staffers from the online disclosure requirements,” Lisa Rosenberg, government affairs consultant for the Sunlight Foundation, wrote in a blog posting.

Senators acted late Thursday, passing the bill by unanimous consent. It still needs approval of the House and from President Obama to become law.

Last year, after CBS’s “60 Minutes” did a report suggesting that some government officials were financially benefiting from insider knowledge of federal actions, Congress passed the Stock Act, which was designed to crack down on insider trading.

Part of the law required that senior government officials’ financial disclosure reports — which they are already required to submit in paper — be made available online in a searchable, sortable format. The belief was that publishing them online would make it easier for reporters and the public to spot illicit dealings.

The online disclosure provisions had not yet taken effect, and Congress asked NAPA to review the law.

In a report released last month, a five-member NAPA panel said online posting would mean more sensitive information about high-level government employees would be easily available, which would make identify theft easier.

“An open, online, searchable and exploitable database of personal financial information about senior federal employees will provide easy access to ‘high quality’ personal information on ‘high value’ targets,” NAPA said in its report.

The Defense Department told NAPA that online disclosure would mean hostile nations would have easy access to sensitive data about top national security officials. The revelations raised questions about Congress’s rush to pass the Stock Act in the first place.

The law passed 96-3 in the Senate and 417-2 in the House, amid intense pressure from Mr. Obama, who called for its passage in his 2012 State of the Union address, and from outside public interest groups.

At the time, the few dissenters warned that the law over-promised and under-delivered.

Some members of Congress, meanwhile, want to go further and ban the use of “political intelligence” — a catch-all term for those with non-public knowledge about things brewing in government that could affect the markets.

In a report this week the Government Accountability Office said it was impossible to quantify how much political intelligence was being used in financial dealings.