ROBERT SIEGEL, HOST:
Yesterday, when House Republicans presented their version of the STOCK Act, a ban on insider trading by members of Congress, a senior Democrat asked a senior Republican about a provision that was not in the House bill. The Senate version covers something called political intelligence. The House bill doesn't.
Democrat John Conyers of Michigan asked Republican majority leader Eric Cantor about that omission.
REPRESENTATIVE JOHN CONYERS: May I ask the distinguished majority leader one question: Why he took political intelligence out of this provision. And I yield to the gentleman.
REPRESENTATIVE ERIC CANTOR: Sure. I respond to the gentleman. I think that is a provision that raises an awful lot of questions. I think there's a lot of discussion and debate about who and what would qualify and fall under the suggested language that came from the Senate.
SIEGEL: Political Intelligence is what all the gentlemen in Washington are talking about this week. It's the phrase of the week and we figured it deserves a working definition.
Joining me is Wall Street Journal investigative reporter Brody Mullins, who's covered the political intelligence industry out of the Journal's Washington bureau.
Welcome to the program.
BRODY MULLINS: Thanks for having me.
SIEGEL: Generally speaking, what is the political intelligence
MULLINS: The political intelligence industry is a group of hundreds, if not thousands, of lobbyists, former congressional staffers, economists, professors and others who come to Washington and they're trying to figure out what the government is doing in various policies that could affect the stock market.
The political intelligence business has generally been around for perhaps 20 or 30 years. What's changed, really, is that the stock markets have taken off and then the rise of hedge funds. Hedge funds are not looking to invest in a company or a market for a long period of time. They're looking to get in, get out and make a quick buck and, therefore, little twists and turns in legislation become more important.
Meanwhile, as the size of government has increased, the government has a bigger role in financial markets, so if you take the rise of the government and the rise of the hedge funds and put them together, it really creates this need for this industry.
SIEGEL: So if I'm an investor, I might retain one of these organizations or subscribe to their newsletter, whatever it might be and I would hope to make some money off that or at least avoid losing a lot of money that way.
MULLINS: That's exactly the idea. What makes it controversial is that these are not newsletters going to you or I that we can, you know, through our fidelity accounts, get a quarterly appraisal of. These are very high net worth individuals, hedge funds and other really wealthy folks who hire, basically, teams of people, you know, Washington insiders to come to Washington to talk to their buddies, talk to their former colleagues on the Hill or in the administration and get really market moving information before anyone else.
SIEGEL: And what would the Senate bill have actually done? These bills are a response to a "60 Minutes" piece which said that members of Congress have been profiting off of insider information, nonpublic information. What would the Senate bill do to these people who aren't members of Congress?
MULLINS: The Senate bill did a couple of things, though, one thing that was most important was that it would simply require the people in this political intelligence business to disclose their activities just like lobbyists do.
Right now, there's absolutely no information about who is in this business, how much money they're making, who are their clients.
SIEGEL: If the Senate requirement was for disclosure and wasn't saying that you can't invest or get paid a lot of money for information, why such resistance to the idea of disclosure?
MULLINS: Well, as we said, we don't know how big this business is. A lot of the lobbyists who I speak with - in fact, almost all of them - say they have a little side business in this political intelligence world. So we don't know how much money it means to these folks. I mean, if everyone is involved, you know, it's helping to pay their mortgages, it's completely underground. We don't know about it and so maybe these people are all fighting against it because, you know, it's helping send their kids to college.
SIEGEL: Well, Brody Mullins, thanks for talking with us.
MULLINS: Thanks for having me.
SIEGEL: Brody Mullins is an investigative reporter for the Wall Street Journal and he has written about the political intelligence industry. Transcript provided by NPR, Copyright NPR.