Some lawmakers and ethics specialists say a more effective system could easily be achieved through digital reporting and rules requiring more precision.

"It is time for Congress to take a fresh look at the financial conflict-of-interest rules, and how they should be enforced -- starting with a thorough overhaul of the disclosure process," said Harvard University government professor Dennis F. Thompson, author of "Ethics in Congress." "Stronger regulation of financial conflicts is necessary not so much to prevent quid pro quo deals, but to check the erosion of trust in government," he said.

Successful investors



Lawmakers are more than just ardent investors: They're unusually successful ones, according to two statistical studies done several years ago by a group of academic researchers.

After examining trading data contained in financial disclosure forms from 1985 to 2001, the researchers found that congressional portfolios have regularly outperformed those of average Americans over the years. The report said a "portfolio that mimics the purchases of House members beats the market by 55 basis points per month."

The researchers, whose findings were presented at a congressional hearing in July, said the statistics suggest that those unusual returns must be based on lawmakers' access to "government and important social contacts."

"No one else has this kind of success, not even mutual fund or hedge fund managers," said Georgia State University professor Alan J. Ziobrowski, one of the researchers. "It's no accident."

Congress has generally maintained a hands-off approach to congressional investing. House ethics rules, for instance, say lawmakers do not have to take action to avoid financial conflicts that might arise as a result of a vote, as long as they are "a member of a class" of investors in an industry, and not one of a few investors in -- or owners of -- a business that would be directly effected by the legislation.

Though the House and Senate each has an ethics committee, they have operated largely behind closed doors, and outside groups call them ineffective. The inadvertent release of documents this fall showed that the House ethics committee was weighing allegations against a few dozen lawmakers, none involving conflicts with stock holdings.

Last year, the House created the Office of Congressional Ethics to serve as a nonpartisan, independent review board. The office has been aggressive, according to publicly released documents. But the House ethics committee has suggested the board of pushing too hard on some matters, according to documents and interviews.

Both houses of Congress have ethics codes. But little attention is devoted to investments in the 444-page House Ethics Manual. Regarding financial interests and voting, the manual cites a precedent from 1907 in support of a permissive approach. In the rules, a lawmaker's responsibility to vote and represent constituents generally trumps questions about financial conflicts.

"Voting on matters before the House is among the most fundamental of a Member's representational duties, and historical precedent has taken the position that there is no authority to deprive a Member of the right to vote on the House floor," the manual states.

In the same paragraph, however, the manual cites another principle: "Members may not use their congressional position for personal financial benefit."