Why three senators said no to an insider trading ban in Congress

Three senators explain their votes against a no brainer.

By Tory Newmyer, writer

FORTUNE -- The measure the Senate approved Thursday to ban lawmakers from stock trading on inside information didn't just pass. It waltzed through the chamber, gathering a whopping 96-vote majority in a bipartisan display that's become rare in the extreme these days.

It's no wonder it proved popular: the bill closed a glaring loophole in Congressional ethics rules allowing Members of Congress and their staffs to trade on market-moving tips they gather in the course of their work. The problem was highlighted by a 60 Minutes report that stoked public anger at an institution already less popular than Paris Hilton.

So considering the bill could have as easily been called the No Brainer Act, how could anyone vote against it? Well, three people found reasons: Republican Sens. Richard Burr (N.C.) and Tom Coburn (Okla.) and Democratic Sen. Jeff Bingaman (N.M.).

Their explanations varied. Burr opposed it because he thinks it's redundant. "Laws regarding insider trading that apply to the American people also apply to Members of Congress and their staff," Burr spokesman David Ward said. In fact, the rules are anything but clear, as the Wall Street Journal notes, and the Securities and Exchange Commission's top cop has said making the practice a statutory no-no would ease prosecution of violators.

Coburn said the bill fixes the wrong problem, telling the New York Times, "The assumption here is that some of our colleagues are doing insider trading on the stock market. Nothing could be further from the truth. The real insider trading is the horse-trading that goes on in this body that is not always in the best interest of the country."

Again, the record doesn't support the claim. While the 60 Minutes report focused on tenuous accusations of abuse by House Speaker John Boehner (R-Ohio) and House Minority Leader Nancy Pelosi (D-Calif.), the Wall Street Journal in earlier reporting found that Alabama's Spencer Bachus, the top Republican on the House Financial Services Committee, essentially shorted the market as he sat in on private briefings with the White House economic team during the peak of the 2008 financial crisis. Bachus has since sworn off stock trading and emerged as a key booster of the bill.

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Bingaman, for his part, objected to a provision in the bill that would require federal workers to quickly disclose their own trades, arguing it would place an undue burden on as many as 300,000 employees. "Current law already prohibits members of Congress and federal employees from engaging in insider trading," Bingaman said in a statement. "To the extent that these laws need to be clarified, I strongly support taking steps to make those prohibitions absolutely clear.  But I can't support a bill that places unreasonable and burdensome reporting requirements on over 300,000 federal workers." Republicans dispute the claim, saying the new disclosure requirement would apply to about 28,000 workers.

All three will get another crack at the bill, assuming it clears the House when Republican leaders there bring it up for a vote next week. But if political heat helped run up the score on the Senate vote, these three are feeling it less intensely. Bingaman is retiring at the end of this year, and Burr and Coburn won't face voters back home until 2016.