WASHINGTON (Reuters) - Two lawmakers on Thursday renewed their bid to regulate the business of selling information gleaned from government contacts after a study said the political intelligence industry was difficult to define and would be hard to police.

Senator Charles Grassley, (R-IA), speaks to a reporter on Capitol Hill in Washington November 13, 2012. REUTERS/Joshua Roberts

Senator Charles Grassley and Representative Louise Slaughter said they would reintroduce a bill requiring political intelligence gatherers to register with the government and disclose information about their activities.

Such requirements were stripped from legislation passed last year to curb insider trading by lawmakers, their staffs and executive-branch employees.

The Stop Trading On Congressional Knowledge (STOCK) Act instead called for more study of the growing industry surrounding the collection and sale of non-public information about legislative, regulatory and executive branch matters to Wall Street investors and corporations.

The study released on Thursday by the Government Accountability Office came to few conclusions.

“The prevalence of the sale of political intelligence is not known and therefore difficult to quantify,” the GAO said. “The extent to which investment decisions are based on a single piece of political intelligence would be extremely difficult to measure.”

At the time the STOCK Act was being debated by Congress, Grassley, a Republican from Iowa, had suggested that the political intelligence industry could be racking up annual sales of $100 million, largely employing former congressional staffers and government officials.

Unlike lobbyists, who are subject to strict disclosure laws, people who collect information through direct, informal contacts with lawmakers, staffers and other government officials are not subject to any laws or guidelines.

The sale of such information is often bundled with industry research or policy analysis services, making it difficult to determine exactly what information clients use to make their investment decisions.

Often, multiple sources of information are combined when deciding to buy or sell securities, the study said.

“Even when a connection can be established between a discrete piece of government information and investment decisions, it is not always clear whether such information could be definitively categorized as material,” the GAO said.

Still, Grassley and Slaughter, a Democratic congresswoman from upstate New York, said these professionals should be registered with the government and their activities disclosed, just like lobbyists.

“This report shows the dire need for transparency in the political intelligence industry, which profits from the cozy relationship between Washington, D.C., and Wall Street,” the two lawmakers said in a statement.

WHAT IS ‘DIRECT CONTACT’?

The GAO noted that insider trading laws now apply to both the executive and legislative branches of government, prohibiting officials and lawmakers from using or disclosing material non-public information for their own benefit.

Firms selling political intelligence maintain they have policies in place to ensure that they follow those laws.

If Congress chose to supplement these laws with disclosure requirements for political intelligence gatherers, it would have to deal with a lack of consensus on key definitions such as what constitutes “direct contact,” or an “investment decision” or even what constitutes such intelligence, the study said.

On Capitol Hill, where information is used as currency among lawmakers, congressional staff, constituents, trade groups and the media, such requirements could make life more difficult.

The GAO said they could even prompt challenges based on perceived restrictions to free speech.