Kristi Noem on Government Reform

Ban stock trading based on Congressional insider knowledge.

Congressional Summary:Stop Trading on Congressional Knowledge Act (STOCK Act): Amends the Securities Exchange Act and the Commodity Exchange Act to prohibit purchase or sale of either securities or commodities by a person in possession of material nonpublic information regarding pending or prospective legislative action.

• Amends the Ethics in Government Act to require formal disclosure of certain securities and commodities futures transactions.
• Amends the Lobbying Disclosure Act to subject to its registration, reporting, and disclosure requirements all political intelligence activities, contacts, firms, and consultants.

Bill explanation (ProCon.org, "Insider Trading by Congress", Feb. 3, 2012):

• On Mar. 17, 2011, Tim Walz (D-MN) introduced the STOCK Act where it gained nine co-sponsors by Nov. 4, 2011.
• On Nov. 13, 2011, the TV show "60 Minutes" reported that several members of Congress allegedly used insider information for personal gain. The STOCK Act received 84 additional House co-sponsors in the five days following the report, and Scott Brown (R-MA) filed the STOCK Act in the Senate on Nov. 15, 2011. Kirsten Gillibrand (D-NY) also filed a variation of the STOCK Act in the Senate on Nov. 17, 2011.
• On Jan. 24, 2012, in his State of the Union Address, President Obama said "Send me a bill that bans insider trading by members of Congress, and I will sign it tomorrow."
• Immediately after the speech, Senate Majority Leader Harry Reid (D-NV) told reporters, "I think people should have enough sense not to do it [insider trading] without legislation, but I will support legislation."
• On Feb. 2, 2012, a revised version of the STOCK Act passed in the Senate by a vote of 96-3 with Senators Richard Burr (R-NC), Tom Coburn (R-OK), and Jeff Bingaman (D-NM) dissenting.

Prohibit IRS audits targeting Tea Party political groups.

Congressional summary:: Stop Targeting of Political Beliefs by the IRS Act: Requires the Internal Revenue Service (IRS) standards and definitions in effect on January 1, 2010, for determining whether an organization qualifies for tax-exempt status as an organization operated exclusively for social welfare to apply to such determinations after enactment of this Act. Prohibits any regulation, or other ruling, not limited to a particular taxpayer relating to such standards and definitions.

Proponent's argument in favor (Heritage Action, Feb. 26, 2014): H.R. 3865 comes in the wake of an attack on the Tea Party and other conservative organizations. The current IRS regulation is so broad and ill-defined that the IRS applies a "facts and circumstances" test to determine what constitutes "political activity" by an organization. This test can vary greatly depending on the subjective views of the particular IRS bureaucrat applying the test. IRS employees took advantage of this vague and subjective standard to unfairly delay granting tax-exempt status to Tea Party organizations and subject them to unreasonable scrutiny.

Text of sample IRS letter to Tea Party organizations:We need more information before we can complete our consideration of your application for exemption. Please provide the information requested on the enclosed Information Request by the response due date. Your response must be signed by an authorized person or officer whose name is listed on your application.

• Have you conducted or will you conduct candidate forums or other events at which candidates running for public offices are invited to speak?
• Have you attempted or will you attempt to influence the outcome of specific legislation?
• Do you directly or indirectly communicate with members of legislative bodies?
• Do you have a close relationship with any candidate for public office or political party?