Miami Democrat on panel overseeing coronavirus payouts failed to disclose stock sales in Congress
Rep. Donna Shalala (D-Fla.), who was appointed to the oversight panel for the corporate bailout portion of the $2.2 trillion stimulus bill signed into law last month, told the Miami Herald she violated federal law for failing to disclose stock sales while serving in Congress.
Shalala, who has served in Congress since 2019, acknowledged the error once she was appointed to the five-person panel by Speaker Nancy Pelosi (D-Calif.) to oversee $500 billion in payouts to large businesses affected by the coronavirus pandemic.
Her 2018 disclosures show she owned stock in several companies that are eligible for bailouts. She later sold those stocks to avoid potential conflict of interest, but those sales were not made public record as required by the 2012 STOCK Act until she spoke on the record about them to the Herald.
“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 told the Herald. “As a new member with a broker and attorney who were not familiar with the congressional disclosure rules, there was a misunderstanding.”
Transactions that aren’t reported within 45 days are subject to a $200 fine, though it’s unclear if Shalala will face legal repercussions for the error. Craig Holman, a government ethics expert and lobbyist with the left-leaning think tank Public Citizen, told the Herald that any potential formal consequences would be brought by the House Ethics Committee.
Shalala, the lone Democratic lawmaker on the panel that oversees how the Treasury Department and the Federal Reserve disburse bailout funds, said she sees her role as preventing “mischief.”
“Treasury got a huge pot of money to bail out large industries, specifically airlines,” Shalala told the Herald. “What we’re really after is mischief. We’re after fraud.”
In response to a request for comment, Shalala’s office pointed to an interview with a local CBS affiliate in which Shalala said she was doing “the opposite of insider trading.”
“I was getting rid of any conflict of interest in the process, but I absolutely missed those deadlines and I apologize for them,” she said.
“It was my mistake and I take full responsibility,” Shalala added. “I knew what the laws were, I missed the deadline.”
Shalala said she notified the House Ethics Committee and said will comply with “whatever they think is appropriate.” She insisted her stock trading would not conflict with her duties on the oversight panel.
A spokesman for the ethics committee declined to comment on whether Shalala notified the panel about her financial disclosures.
On Wednesday, the Demand Progress Education Fund called on Democratic Party leaders to encourage Shalala to step down from the panel.
“Recent news reports concerning Rep. Shalala’s potential conflicts of interest and possibly illegal or unethical activities raise significant concerns about her ability to discharge her duties, her judgment, and her ability to be viewed as conducting her oversight duties impartially and without distraction,” the group wrote. “The nature of the complaints do not lend themselves to immediate resolution, and we do not want her to be distracted by those complaints or to distract the Commission from its essential work on behalf of the American people.”
Updated at 3 p.m.