House files brief

CONGRESS CAN’T BE INVESTIGATED.  “In a little-noticed brief filed last summer, lawyers for the House of Representatives claimed that an SEC investigation of congressional insider trading should be blocked on principle, because lawmakers and their staff are constitutionally protected from such inquiries given the nature of their work.”

Political intelligence in the shadows

POLITICAL INTELLIGENCE AND PROSPECTS OF REGULATION.  Bloomberg.   The story highlights the “shadowy Washington business of ‘political intelligence’—gathering inside information on executive, legislative, and regulatory developments and selling it to Wall Street investors, who pay large sums to keep abreast of what’s going on behind the headlines and trade on it before anyone else.”

Political intelligence in the news

WSJ details how firms are extracting government information for profit here.

Many have discovered that the biggest lever of all is the one available to everyone—the Freedom of Information Act—conceived by advocates of open government to shine light on how officials make decisions. FOIA is part of an array of techniques sophisticated investors are using to try to obtain potentially market-moving information about products, legislation, regulation and government economic statistics.

Political intelligence firms arrange White House meetings

The Post reports that Obama administration officials held meetings on then-upcoming decisions on health-care topics.

White House records show that Elizabeth Fowler, then a top ­health-policy adviser to President Obama, met with executives from half a dozen investment firms in 2011 and 2012. Among them was Kris Jenner, a stock picker with T. Rowe Price Investment Services who managed its $6 billion Health Sciences Fund.

The head of equity at T. Rowe Price, Bill Stromberg, said in a statement that his firm had not requested any private information and that none was provided.

With every story of this type the momentum for legislative action builds, as the story notes.

Slaughter, the ranking Democrat on the House Rules Committee, has proposed legislation with Sen. Charles E. Grassley (R-Iowa) that would require political-intelligence firms to disclose some of their activities. She says the rising profile of such firms gives a special advantage to big investors.

This Week in Political Intelligence

The Washington Post again on Friday brought its spotlight to political intelligence activity on the Hill.  This time the focus was on staff for Senators Rubio and Schumer and Reps. Castro.  According to this report,

In recent days, Enrique Gonzalez, an immigration lawyer who in January became Rubio’s immigration policy counsel, has answered questions about the bill over the phone with a financial analyst, according to the senator’s spokesman. Another staffer met last week with an analyst from the investment bank Barclays Capital, who quickly revised his assessment of the bill’s potential cost to a major outsourcing firm.

The news report included commentary from:

  • Erik Gerding, University of Colorado law school;
  • Richard Painter, chief ethics lawyer for President George W. Bush; and
  • Jonathan R. Macey, Yale Law School.

The report concludes with a note that Rep. Slaughter is exploring “legislative remedies”.