Imagine A Chuck Grassley-Buck McKeon Cage Match!

Buck & Chuck

Iowa Senator Chuck Grassley hasn't exactly been some flaming prairie populist. The Wall Street/K Street axis knows he can always be counted on to do exactly what they tell him to do. Always. So it was a little odd today for him to lash out at House Republicans for watering down the already weak Senate-passed STOCK Act that seeks to get Members of Congress to stop using insider information to enrich themselves. In fact, the reason for Grassley's hissy fit was because Cantor and his claque feel targeted by a provision inserted into the bill by Grassley:

"Washington insiders who collect political intelligence and sell it to corporate America would have to register under the lobbying disclosure law.”

He explained, “When these people come around to get information from you that they sell to hedge funds, that you’ll know who they are. You don’t know that now. Imagine how personally attacked the worst House shills like Paul Ryan, Fred Upton, Eric Cantor and Spencer Bachus must have felt. Not to mention Buck McKeon! (So they got together and killed it in the House version, with plenty of sighs of relief-- and, alas, not just on the Republican side of the aisle.) Grassley:

It’s astonishing and extremely disappointing that the House would fulfill Wall Street’s wishes by killing this provision. The Senate clearly voted to try to shed light on an industry that’s behind the scenes. If the Senate language is too broad, as opponents say, why not propose a solution instead of scrapping the provision altogether? I hope to see a vehicle for meaningful transparency through a House-Senate conference or other means. If Congress delays action, the political intelligence industry will stay in the shadows, just the way Wall Street likes it.

Earlier today, investigative reporter Zaid Jilani revealed exactly why McKeon has worked so assiduously behind the scenes to block the Stock Act. McKeon is one of the most blatant corporate whores in Washington-- and that is saying a lot. Jilani points out that McKeon, who chairs the powerful House Armed Services Committee, puts a lot of efforts into collecting bundles of cash from defense contractors and the manufacturers of military drones. And when they max out to him, he directs them-- illegally-- to his wife's campaign. Aside from being the Treasurer of his campaign, she's also making a boneheaded run for state Assembly against longtime McKeon top staffer Scott Wilk. McKeon, he reports, "received $339,000 from the defense industry himself in 2010, so it’s reasonable to suspect that arms manufacturers and others are donating to his wife’s state race in order to please him."

Now, it appears that these donations are paying off. This morning at the Omni Shoreham Hotel in Washington, D.C., Rep. McKeon delivered a “Special Address” for the Association for Unmanned Vehicle Systems International (AUVSI), a drone industry lobbying organization. Republic Report gained access to the event-- which hosted hundreds of attendees from unmanned systems industry, including military drone  manufacturers like Lockheed Martin and Northrop Grumman.

Before McKeon spoke in the main conference room around 8:30 AM, AUVSI Chairman Peter Bale delivered some opening remarks. He praised McKeon for attending the conference and for fighting to include new authorizations for expanded drone use in the United States in the FAA bill. He also commended President Obama for “just last week…making his most public defense of the use of UAS systems,” referring to President Obama’s claim that Predator drone strikes in Pakistan had not “caused a huge number of civilian casualties.”

McKeon was then introduced by a AUVSI staffer. “He’s been in Congress for twenty years. No small accomplishment to be re-elected twenty times,” he boasted. “He’s sponsoring HR 658, which is the FAA authorization bill to promote integration of unmanned systems into the national airspace. And that takes an enormous amount of work every day, congressman, to advocate that.”

As the congressman spoke, he was full of praise for the drone makers. “I want to thank you all for what you’re doing,” McKeon told the attendees. “Let the people know… how much you’re appreciated and how important the work it is you’re doing.” The congressman then pivoted into crediting the drone industry with helping neutralize Osama Bin Laden. “You know, the Navy SEALS killed Bin Laden. But it was a team effort. It was a drone in the sky that gave them much of the intelligence they needed.”

One of the themes of his speech was opposition to defense cuts, even going so far as to say that cutting back on military spending will cost American lives. “In my lifetime, we cut back after every war. We cut back after World War I, that was before my lifetime,” he said to laughter from the defense contractors. “We cut back after World War II. We cut back after Korea. After Vietnam. Every conflict, we cut back the military. Because I guess it’s in our DNA that we would not want to be prepared for the next one. It really disturbs me because if you read history, you’ll see how we lost a lot of people at the start of every conflict needlessly because of lack of preparedness.”

Watch McKeon’s remarks (the camera occasionally pans to the ground in order to remain discreet):



Towards the end of McKeon’s speech, he was interrupted by an anti-war protester demonstrating against civilian deaths in the drone war in Pakistan. After the defense contractors booed and laughed at the protester and she was removed, McKeon explained his foreign policy philosophy to the audience. “Wouldn’t we all be like to cut our swords, and pull our ploughshares and live in total world peace? I’ll tell ya, that’s not happening.” Yet what McKeon did not see fit to say is that the swordmakers he spoke before are lavishly funding both his political campaign and that of his wife.

Monday, DC trade publication, The Hill ran a revelatory piece about "the lucrative market for political intelligence that runs from Washington to Wall Street" that goes way deeper than anything you're going to hear about their kind of corruption on TV. Being a trade paper, they don't reveal any names or make any enemies, but no one doubts they were talking about scumbags like McKeon, Upton, Cantor, Bachus and Ryan.

Lobbyists and operatives are bristling at a provision in the Stop Trading on Congressional Knowledge (STOCK) Act that would require many traders of political intelligence to register for the first time under the Lobbying Disclosure Act (LDA).

Observers say the intelligence trade is rapidly growing into a multimillion-dollar industry, powered by clients at hedge funds and other financial firms that can turn a tidy profit on the inside dope about the workings of Congress.

“They don’t want to impact the outcome. They want to know how it is going to play,” said a person who works in the industry. “You can trade it on either side.”

The disclosure provisions in the STOCK Act could put a crimp in the industry by revealing for the first time the true extent of the practice-- and who’s engaged in it. 

“Having a lobbyist tell that information to a hedge fund is actually called tipping. You would go to jail for it,” said Michael Mayhew, the chairman and global director of research for Integrity Research Associates, referring to the bill’s restrictions on insider information. 

“I actually do think that if the STOCK Act passes, that the divisions of lobbyists and law firms that provide this kind of information is likely to shrink for just that reason.”

Mayhew said the expanded disclosure would also decrease the value of the information about legislative and regulatory moves in Washington.

“The moment that information becomes commoditized, it has lost all its value,” he said.

Wall Street is beginning to take notice. On Saturday, the Securities Industry and Financial Markets Association (SIFMA), a powerful lobbying group for banks and traders, held a hastily arranged conference call with members to discuss the STOCK Act, according to an email obtained by The Hill.

“Dear Gov Reps –,” wrote Matt McGinley, SIFMA’s managing director of federal relations, in the email Saturday morning. “One of our member firms identified a provision in the recently passed Senate STOCK Act that could apply certain registration requirements to research analysts. … Apologies for the late notice, but this issue was just identified late in the day yesterday and the legislation is moving very quickly.”

Included with the email was a memo written by lawyers at Wiley Rein, who were also scheduled to be on the call.

That memo, dated Feb. 3, warns the STOCK Act’s definition of what constitutes a “political intelligence contact” is “potentially extremely broad” and could require research analysts to register as lobbyists.

“Even the routine activities of research analysts would appear to fall within the covered scope of this definition insofar as these activities include contacting a covered executive branch or legislative branch official and using information derived from such contact in analyzing the securities or commodities markets,” the memo says.

The memo suggests “some potential ‘fixes’ ” for the bill, such as limiting “the broad scope of ‘political intelligence contact’ through further exceptions, including, for example, for ‘routine research activities.’ ”

...The Washington law firm Covington & Burling blasted out a notice to clients Monday warning the STOCK Act would apply to many in the financial industry who aren’t currently covered by the LDA.

“Hedge funds, private equity funds, and investment advisers (many of which are not currently registered under the LDA) might now be required either to register or to alter their business practices to avoid the need for registration,” Covington & Burling wrote in the notice. 

“Moreover, the reach of the law, if enacted, would likely extend far beyond the financial services sector. For example, a company that seeks to gather information from covered federal officials regarding the likely congressional or regulatory reaction to a proposed merger or acquisition might be required to register.”

If lobby firms and financial companies want to block the STOCK Act, they’ll have to move fast. The bill gained momentum after a November 60 Minutes report that alleged insider trading by congressional leaders, and was touted by President Obama in last month’s State of the Union address.

Cantor and crew to the rescue of their sleazy hedge fund and bankster buddies!