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Taking STOCK of Unintended Consequences
AFSA has been making
steady progress in its efort
to prevent specific provisions
of a new law from going into
efect that would require
thousands of federal employ-
ees to make their financial
disclosure forms publicly
available on the Internet.
While the STOCK Act’s
original intent was to prevent
insider trading, the unin-
tended consequences of the
law have created personal
risks for government employ-
ees, as well as potential
national security threats.
In his State of the Union
address last January, Presi-
dent Barack Obama chal-
lenged Congress to “Send me
a bill that bans insider trad-
ing by members of Congress;
I will sign it tomorrow.”
As Congress worked on
the issue, the legislation that
emerged applied not just to
members of Congress, but
to congressional staf and
more than 28,000 executive
branch employees. More
troubling was the require-
ment that personal financial
reports regularly filed by
federal employees be posted
in a searchable, download-
able online database.
While financial disclo-
sure forms filed by federal
employees are already tech-
nically public, they are not
available online. The process
for obtaining the records
requires the person or orga-
nization making the request
to disclose their identity. On
April 4, the bill signed into
law by Pres. Obama did not
include any language pro-
tecting the privacy of federal
employees who are required
to file.
As a government trans-
parency measure and an
opportunity for members
of Congress to demon-
strate their commitment to
accountability, the STOCK
Act received overwhelming
support in both the Senate
and the House. Only three
senators and two representa-
tives opposed the measure:
Sen. Jef Bingaman, D-N.M.,
voted against it because of
the burdensome reporting
requirements, while Sen.
Tom Coburn, R-Okla., Sen.
Richard Burr, R-N.C., Rep.
Rob Woodall, R-Ga., and Rep.
John Campbell, R-Calif., cited
laws already on the books
prohibiting insider trading by
government ofcials.
In their efort to prove
their commitment to govern-
ment transparency, legisla-
tors failed to see the law’s
flaws. However, they rapidly
became apparent to thou-
sands of federal employees
suddenly faced with require-
ments that their personal
financial information be
publicly disclosed.
In May, AFSA joined a
coalition of organizations
that represent govern-
ment employees to make a
concerted efort to correct
the sections of the STOCK
Act that put federal workers
at personal risk and, poten-
tially, could create a national
security threat. National
security concerns regarding
the public posting require-
ments were highlighted in a
July 19 letter to members of
Congress. Signed by more
than a dozen former national
security leaders, the letter
noted that posting “complete
personal financial informa-
tion of all senior ofcials
on the Internet would be a
jackpot for enemies of the
United States intent on find-
ing security vulnerabilities
they can exploit.”
Over the summer, AFSA
was fully involved with the
coalition’s work to convince
lawmakers to reconsider
the online posting require-
ments. AFSA President
Susan Johnson and AFSA
Vice President for the Foreign
Commercial Service Keith
Curtis led AFSA’s eforts to
illustrate the unnecessary
risks the STOCK Act creates,
especially the possibility
that Foreign Service person-
nel could be targeted by
hostile intelligence agencies
or criminal organizations.
Legislators were receptive
to the concerns raised by
the coalition regarding the
online posting requirements,
but were hesitant to undo
this aspect of the law. On
Aug. 6, Johnson sent a letter
to Secretary of State Hillary
Rodham Clinton, appealing
for her support as well.
On Aug. 2, with the
deadline for implementa-
tion at the end of the month
and Congress scheduled to
recess until after Septem-
ber, the coalition, joined by
the American Civil Liberties
Union, filed a lawsuit in the
U.S. District Court for the
District of Maryland, chal-
lenging the STOCK Act as a
breach of federal employees’
right to privacy.
After further stopgap
extensions through August
and September, Congress
pushed back the deadline to
Dec. 8, and mandated a study
by the National Academy
of Public Administration to
determine the full efects the
online posting requirements
could have on government
employees. The study is
not due to be completed
until early next year, and
members of Congress are
already calling for further
delays until the NAPA report
is finalized. Meanwhile, AFSA
and its coalition partners are
continuing to pursue both a
legislative fix and legal rem-
edies to overturn the online
posting requirements.
... the unintended consequences of
the law have created personal risks for
government employees ...