KEY POINTS

  • The STOCK Act requires Reps to report stock trades within 45 days, Shalala did not 
  • Shalala reportedly had no interest in the appointment, but Pelosi gave it to her anyway
  • First she denied any wrongdoing, then Shalala's office admitted to making a 'mistake'

The office of Rep. Donna Shalala, D-Fla., admitted to The Miami Herald that the congresswoman made a “mistake” in not publicly reporting a variety of stock sales throughout 2019, as required by the STOCK Act. Shalala was just recently appointed by House Speaker Nancy Pelosi, D-Calif., to oversee $500 billion in taxpayer money being sent to big businesses struggling with the fallout from the coronavirus pandemic.

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

Condarco earlier told The American Prospect that “the Congresswoman has filed all the necessary disclosures required under the STOCK Act.” Critics have claimed that this entire ordeal invalidates Shalala’s appointment to an oversight panel, as Jeff Hauser of the Revolving Door Project told The American Prospect: “How is she going to perform oversight of banks if she thinks the straightforward instructions of the STOCK Act are too complicated? And if she is dissembling to The Miami Herald , that should undermine confidence in her leadership as well. Good government people ought to be able to make Pelosi feel enough pressure that rethinking her choice of Shalala might become the easiest way out of this mess.”

US House Speaker Nancy Pelosi speaks on the coronavirus crisis on March 23, 2020 US House Speaker Nancy Pelosi speaks on the coronavirus crisis on March 23, 2020 Photo: POOL / Alex Wong

Rep. Katie Porter, D-Calif., was the only representative reported to have pursued the oversight appointment given to Shalala. Porter is known for her deep knowledge of consumer protection and banking rules and has become very popular on the left for her forceful questioning of bankers, while Shalala’s background is in health and human services and she has no expertise in the financial industry. The American Prospect reported that Shalala had no interest in the job.

The bipartisan panel that Pelosi appointed Shalala to comprised five people who will supervise the U.S. Treasury Department and Federal Reserve’s $500 billion fund to disperse to large businesses affected by COVID-19. While current reports do not elevate Shalala’s stock sales to the level of potential insider trading like that of Sens. Kelly Loeffler, R-Ga., and Richard Burr, R-N.C., it still calls into question her ability to oversee a massive lending program like this.

Craig Holman, a government ethics expert and lobbyist with the left-leaning think tank Public Citizen, told The Miami Herald that “If there appears to have been some insider trading going on, as with Richard Burr, it can be elevated to a criminal act and investigated by the DOJ. In most cases, and I suspect in Donna Shalala’s case, I don’t see the stock trades benefiting her. In that case it would be up to the Ethics Committee to reprimand her and impose some sort of fine.”