Miami Democratic Rep. Donna Shalala failed to publicly report two stock sales, a violation of federal disclosure law for the second time in five months. Earlier this year, she acknowledged that she had failed to report 556 stock sales.
In the most recent failure to disclose financial information, Shalala said Monday she failed to disclose two stock sales of Tegna, a broadcast, digital media and marketing services company based in Virginia. The first sale, on April 1, 2019, was valued between $15,001 and $50,000 and the second sale, on March 31 of this year, was valued between $1,001 and $15,000. Shalala signed a federal Periodic Transaction Report on July 21, more than a year after the first sale and more than three months after the second sale.
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. Both sales were reported more than 45 days late.
Shalala, who is responsible for overseeing $500 billion in taxpayer money used for coronavirus-related payouts to large businesses, said the unreported stock sales were part of an ongoing deferred compensation agreement with Tegna. Shalala served on the board of Gannett, a newspaper company, from 2001 through 2011. In 2015, Tegna was spun off from Gannett, and Shalala’s deferred compensation for her board work was under the umbrella of the new company.
Shalala spokesperson Carlos Condarco said the plan “operates similarly to a pension” and that “neither the congresswoman nor her advisers receive notification when these shares are sold. They don’t manage the assets in the plan or receive notices of sale.”
According to Shalala’s financial disclosures, she also receives income each year from Tegna as part of her deferred compensation agreement. In 2018, Shalala received $29,151. In 2019, she received $45,350. The deferred compensation agreement is in place through 2026.
Stock sales are also part of the agreement. Shalala said she was unaware that Tegna stock was sold on her behalf as part of the agreement and only discovered the transaction when her lawyer was compiling income information for her annual financial disclosure, which was due in August.
“This came to light because her advisers she relies on weren’t monitoring this closely,” Condarco said.
Condarco said Shalala’s adviser filed the additional transaction report in July and that the congresswoman was aware of the report’s existence, but she was not aware that the report contained a STOCK Act violation.
Shalala’s stock transactions have become an issue in her reelection campaign against Republican Maria Elvira Salazar for Florida’s 27th Congressional District. The district includes most of Miami and Miami Beach.
Salazar’s first TV ad, which went on air last week, said Shalala “broke the law to enrich herself off coronavirus.” The ad, which seeks to introduce Salazar to voters and attack Shalala, offers no evidence for the claim and doesn’t explain it.
Shalala’s campaign sent a cease-and-desist letter to Salazar on Monday.
“The allegation stems from the fact that in April 2020, Representative Shalala admitted that she mistakenly failed to timely file periodic transaction reports for stock her broker sold in 2019,” the letter said. “Yet, your advertisement has alleged that Representative Shalala ‘broke the law to enrich herself off coronavirus.’ This false accusation is defamatory, and you must immediately cease from disseminating it further.”
Salazar, a former TV journalist, repeated the accusation in an interview with CBS Miami on Sunday, but she did not offer proof for it.
The 2020 sale of Tegna stock happened after the market crashed in March, and follows the same pattern of the 2019 sale which was executed on nearly the same day.
Condarco said the timing of Tegna stock sales is done without Shalala’s knowledge once a year. The 2020 stock sale valued between $1,001-15,000 occurred the same week that a potential Tegna takeover bid fell through due to revenue concerns amid the coronavirus pandemic.
Shalala paid a $1,200 fine to the House Ethics Committee in April for six STOCK Act violations because she failed to report hundreds of transactions made last year by a broker setting up a blind trust. The penalty for violating STOCK Act disclosure requirements is a $200 fine for every missed disclosure. Condarco said Shalala hasn’t talked to the Ethics Committee regarding her latest report.
There is no indication that Shalala engaged in insider trading, though her stock holdings on her previous financial disclosure, from 2018, led to criticism from left-leaning outlets that her portfolio conflicted with her work on a congressional committee set up to oversee $500 billion in taxpayer money being used for coronavirus-related payouts to large businesses.
Shalala served as secretary of Health and Human Services in the Bill Clinton administration and as the University of Miami’s president before entering Congress in 2019.
Shalala beat Salazar in 2018 by six percentage points and is favored to win reelection in a district that leans Democratic, though Salazar has the financial resources to mount a serious campaign.