Dem on Committee to Oversee Relief Payouts Violated Federal Law With Failure to Report Stock Sales

Florida Democrat Donna Shalala, a member of the committee to oversee nearly half a trillion in taxpayer funds used for payouts to businesses for coronavirus relief failed to report stock sales in 2019 in a violation of federal law, according to a new report from the Miami Herald.

Per CBS Miami, Miami Congresswoman Donna Shalala admits she made a mistake by failing to report at least a half dozen stock sales she made after being elected to the House in 2018.

“It was my mistake and I take full responsibility,” she told CBS Miami, in her first interview since the transactions became public.

After being elected in November 2018, Shalala started selling off many of the individual stocks she owned, including shares in Boeing, Alaska Airlines, Chevron, Conoco, and AMC.

According to a list provided by her office, the last transaction was on August 30, 2019.

MiamiHerald reports Miami Democratic Rep. Donna Shalala, the lone House Democrat on the committee set up to oversee $500 billion in taxpayer money being used for coronavirus-related payouts to large businesses, violated federal law when she failed to disclose stock sales while serving in Congress.

Shalala told the Miami Herald on Monday she sold a variety of stocks throughout 2019 to eliminate any potential conflicts of interest after she was elected to Congress in November 2018. But the transactions were not publicly reported as required by the STOCK Act, a 2012 law that prohibits members of Congress and their employees from using private information gleaned from their official positions for personal benefit and requires them to report stock sales and purchases within 45 days.

Shalala’s office said the congresswoman and her financial adviser made a mistake.

Shalala, the former head of the Department of Health and Human Services under President Bill Clinton, is in the process of setting up a blind trust for her assets, and transactions made within a blind trust without a lawmaker’s knowledge are not required to be disclosed. But the blind trust isn’t finalized, meaning any transactions would need to be made public.

“She had a misunderstanding about the periodic transaction report process and her need to report the sale of these stocks while preparing a blind trust,” Shalala spokesperson Carlos Condarco said. “As a new member with a broker and attorney who were not familiar with the congressional disclosure rules, there was a misunderstanding.”

Shalala acknowledged the transactions after she was selected by House Speaker Nancy Pelosi to represent House Democrats on a bipartisan panel that will monitor $500 billion in payouts to large businesses affected by the coronavirus. On her 2018 financial disclosure, the most recent that is publicly available, Shalala said she owned a number of stocks in companies that could be eligible to seek federal bailouts, a potential conflict of interest.

Shalala’s appointment to the five-person commission put her in the role of helping to supervise efforts by the U.S. Treasury Department and the Federal Reserve to stabilize the economy by lending hundreds of billions of dollars to struggling businesses, hospitals, municipalities and states. It will hold hearings and issue monthly reports to Congress.

“Treasury got a huge pot of money to bail out large industries, specifically airlines,” Shalala said, of her role on the committee. “What we’re really after is mischief. We’re after fraud.”

After Shalala was criticized for her stock holdings, her office said she’d sold off most of her portfolio of individual stocks in 2019. But the transactions were never disclosed publicly until her office told the Miami Herald.

The congressional disclosure laws have received increased attention in recent weeks after Republican Sen. Richard Burr of North Carolina sold millions in stocks before markets tanked due to the coronavirus — but after he received classified briefings on the virus. Burr is now under investigation by the Department of Justice for insider trading.

There isn’t any evidence that Shalala bought or sold stocks based on inside information. But Craig Holman, a government ethics expert and lobbyist with the left-leaning think-tank Public Citizen, said her lack of disclosure means the public wasn’t able to hold her accountable for her financial dealings as an elected official.

“The reporting requirement is exceedingly important. It’s perhaps the most important element of the entire STOCK Act,” Holman said. “The reporting requirement gives the public and press a real-time view of stock trading activity by members of Congress. That type of disclosure would allow us to uncover what would appear to be insider trading for Burr and [Georgia Republican Sen. Kelly] Loeffler.”

A spokesperson from Shalala’s office said they’ll get her 2019 financial disclosure filed “as soon as we can.” It had been due in mid-May, but lawmakers received a 90-day extension for their 2019 reports until mid-August due to the coronavirus.

Shalala’s office also said the House Ethics Committee instructed them to include any 2019 transactions in her upcoming financial disclosure.