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Why millions still haven't received stimulus money
03:15 - Source: CNN
CNN  — 

House Speaker Nancy Pelosi says Democratic Rep. Donna Shalala of Florida will remain on a newly created congressional oversight commission amid calls for Shalala’s removal after she failed to disclose stock sales last year she was required to report under the Stock Act.

Shalala, a former Health and Human Services secretary who won her congressional seat in 2018, told The Miami Herald on Monday that she sold multiple stocks in 2019 after she was sworn in to eliminate any potential conflicts of interest, but she did not report the transactions as required under the law.

Last week, Pelosi named Shalala to the five-person Congressional Oversight Commission created under the CARES Act that will keep tabs on implementation of the $2.2 trillion stimulus package. Pelosi said in a statement Wednesday that Shalala should stay on the commission.

“As a distinguished administrator who has spent many years in public service, Congresswoman Shalala has the Speaker’s complete confidence as she works to hold the Administration accountable to the taxpayer through the Cares Congressional Oversight Commission,” Pelosi said in the statement. “Since coming to Congress, Congresswoman Shalala has taken aggressive steps to avoid even the suggestion of a conflict of interest over her personal investments. Rep. Shalala has taken responsibility for her mistake in missing filings required under the Stock Act and has been working (with) the Ethics Committee to address this issue since she became aware of it.”

Shalala’s office told CNN Wednesday that the congresswoman planned to work with the House Ethics Committee to fix her mistake.

“She made an honest mistake as a new member with attorneys and brokers who were helping her in this transition who were unfamiliar in this process,” spokesman Carlos Condarco told CNN.

Her office told The Miami Herald that she failed to disclose the stock trades because of a “misunderstanding” she and her financial adviser had about the Stock Act, a 2012 law that explicitly bans lawmakers from using insider information to make stock trades, along with requiring disclosure of their transactions.

Her office told the paper that Shalala was in the process of setting up a blind trust for her assets, which would not require the reporting of individual stock sales. But because that wasn’t finalized, the sales had to be disclosed.

The violation of the Stock Act prompted calls for Shalala to be removed from the oversight panel.

“It’s unacceptable for a member who is apparently unfamiliar with the basic reporting requirements in the Stock Act to serve on a congressional committee tasked with overseeing the federal government’s spending related to the current coronavirus crisis,” said Danielle Brian, executive director of the Project on Government Oversight, a government watchdog group.

In the wake of the coronavirus outbreak, several lawmakers have faced scrutiny for their stock sales that came ahead of the economic downturn caused by the pandemic.

Senate Intelligence Chairman Richard Burr, a North Carolina Republican, has asked the Senate Ethics Committee to review his sales of up to $1.7 million in stocks made in February.

Sen. Kelly Loeffler, a Georgia Republican who was sworn into the Senate in January following her appointment, said earlier this month that she and her husband would sell all of their individual stocks after she was criticized for making trades in January and February. Loeffler said she had no knowledge of the sales made by outside advisers.

Shalala’s situation is different because at issue is her failure to disclose stock sales, as required under the Stock Act, made well before the crisis.

The five-member commission – which so far includes Shalala, GOP Sen. Pat Toomey of Pennsylvania, GOP Rep. French Hill of Arkansas and Bharat Ramamurti, a former aide to Democratic Sen. Elizabeth Warren of Massachusetts – is tasked with oversight of the more than $2.2 trillion stimulus funding that will be given out to small businesses, corporations and others to prop up the economy.