After Revelations of Improper Stock Sales, Groups Demand Pelosi's Pick for Bailout Oversight Step Down

Progressive groups on Wednesday demanded House Democratic leadership pressure Rep. Donna Shalala to step down from a committee on oversight of the appropriation of billions of dollars in coronavirus stimulus funds after it was revealed Saturday by journalist David Dayen that the Florida Democrat failed to follow the law on disclosing stock transactions in 2019.

"Not understanding disclosure is a pretty bad look for the member of Congress chosen to force disclosure out of the Treasury Department and Federal Reserve on its lending programs," Dayen wrote of Shalala at the American Prospect Wednesday.

Dayen on Tuesday reported that Shalala had sold a number of stocks in 2019, but had failed to disclose those sales as required under the law. Shalala spokesman Carlos Condarco told the Miami Herald later Tuesday that the congresswoman "had a misunderstanding about the periodic transaction report process and her need to report the sale of these stocks."

"The entire point that Shalala's wealthy backers used to pump her up as the 'sensible' choice vs. the many progressives in her primary race was that Shalala knew how Washington laws worked and that she wouldn't do stuff like this," tweeted The Appeal's Jerry Ianelli.

According to Dayen:

The oversight panel has nothing to do with public health or the pandemic. It's supposed to examine Federal Reserve lending programs and whether they are assisting the public in economic stabilization and job recovery. These are deliberately complex programs that require for oversight someone with a passing familiarity with the financial system and corporate America. The only expertise Shalala has in all that comes from all the stocks she owns.

Demand Progress and the Center for Economic and Policy Research's Revolving Door Project on Wednesday issued an open letter (pdf) to Pelosi, House Majority Leader Rep. Steny Hoyer (D-Md.), and Democratic Whip Rep. James Clyburn (D-S.C.) urging them to encourage Shalala to step down from the Congressional Oversight Commission to which she was appointed on Friday.

"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 groups 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."

In a statement, Demand Progress executive director David Segal said that the developing scandal would make it nearly impossible for Shalala to effectively do her job.

"If Shalala remains on the Congressional Oversight Commission there will be ongoing investigations into the dealings of a leading investigator of the bailout," said Segal. "This is untenable and she must step down now so as to not undermine the Commission's important work."

Rep. Katie Porter (D-Calif.), whose pointed questioning of administration officials on economic issues has made her a star and who served in 2012 as California's independent monitor of banks for compliance with a $25 billion mortgage settlement, lobbied for the sole committee position for House Democrats.

Pelosi instead chose Shalala, a former Health and Human Services secretary under the Clinton administration whose lack of experience in financial oversight was reportedly matched by her disinterest in serving on the committee.