On March 22, the U.S. Senate passed the Stop Trading on Congressional Knowledge Act, or STOCK Act, which will put thousands of disclosures from congressional and executive branch officials online for the first time. President Obama will sign the legislation into law on April 4. Many state governments already provide some online access to similar disclosures, and others, such as Maryland, are considering following suit.

Public officials regularly make decisions that could impact the value of their personal financial holdings. Asset disclosure helps ensure that such conflicts of interest are identified and addressed before decisions are made – and transparency allows the public to hold officials accountable for doing so. While rules in the federal government and many states require asset disclosure, online public access to this information has lagged. The passage of the STOCK Act, and the advancement of similar legislation in Maryland, represent welcome steps forward.

Federal Financial Disclosure

The Ethics in Government Act of 1978 requires high-ranking federal officials to publicly disclose their personal financial interests, such as stocks owned and sources of income. Such requirements apply to officials in all three branches of the federal government. In the executive branch, more than 28,000 such disclosures were filed in 2010, according to the Office of Government Ethics (OGE).

However, the federal government does not provide much online access to those reports, with a few exceptions in recent years:

• The House has posted the financial disclosure forms of members since 2008, as required by the Honest Leadership and Open Government Act of 2007. (The Senate does not follow a similar practice.)
• The White House has posted the disclosures of President Obama and Vice President Biden since 2009.
• As of March 12, OGE posts the reports of about 900 top officials in the executive branch.

The STOCK Act will bring those disclosures under a common legal standard and significantly expand the number of officials whose reports are available online. The legislation requires that public disclosures from the executive and legislative branches be posted online by August. In addition, the bill requires that disclosure reports be submitted electronically, which will make them easier to post as a searchable database, which the bill requires by September 2013.

In addition, the bill enhances the content of financial disclosure reports by requiring timelier reporting of transactions and requiring a subset of top officials to report mortgages on personal residences. The bill also strengthens ethics in several other ways, most notably in tightening restrictions against insider trading by public officials.

Previously, the task of providing online access to financial disclosures has fallen to nonprofit organizations outside of government, such as the Center for Responsive Politics' OpenSecrets.org and Judicial Watch's Judicial Financial Disclosure Project. Such projects have struggled at times to secure access to the records and are not complete; nevertheless, they have developed some innovative features to help the public find and understand the information. Under the STOCK Act, the government will take greater responsibility for the transparency of this important ethics information.

Financial Disclosure in the States

While the federal government has only begun to formalize online access to financial disclosure reports, a number of states have already established some level of online access. A recent OMB Watch report examined accountability websites in the states, including asset disclosure information. The report discussed several existing state websites, among them Arkansas, Rhode Island, and Tennessee. The usefulness of financial disclosure websites lags behind other types of accountability websites, such as those for campaign finance or lobbying information.

Nevertheless, some states are continuing to make progress. Most recently, a bill in Maryland would require the posting of financial disclosure reports online and require officials to submit their reports electronically. These disclosure requirements would apply to state legislators, top-ranking executive branch officials, and certain local officials. The Maryland Senate has approved the bill, and the House of Delegates is scheduled to hear the bill on April 4.

Judicial Disclosure Lags

Despite the progress, a notable gap remaining at the federal level and among many states is online access to financial disclosure by members of the judiciary. Judges make important decisions that can significantly impact individuals and businesses. At the federal level, judges are required to submit asset disclosures, but the government does not provide online access to the information. The STOCK Act does not require that these disclosure reports be posted online.

In many states, judges are elected, and therefore subject to the same potentially corrupting forces as elected officials in the legislative and executive branches. Unfortunately, judges' disclosure reports are not included in the requirements for online posting in many states, and even some current bills, like Maryland's, do not cover judicial disclosures.

In California, the judges association is fighting a requirement to post such disclosure reports online. The reports of other state and county public officials are already posted, but on March 15, the association won a delay for posting judicial records while guidelines for redacting sensitive information are drafted. While the judges claim that posting the information could constitute a security risk, a member of the commission responsible for the disclosures commented that the situation looked like "the judges don't want the voters to know how rich they are."

Recommendations

While the STOCK Act and the Maryland legislation both offer generous timelines for implementation, officials should minimize delay in upgrading transparency. States that have not yet begun to post asset disclosures should follow suit. OMB Watch's recent report, Upholding the Public's Trust: Key Features for Effective State Accountability Websites, offers recommendations for making online disclosures most useful to the public.