Tech

3 congressional Democrats seemingly violated a federal transparency law by improperly disclosing financial trades

  • Reps. Lori Trahan, Debbie Wasserman Schultz, Kathy Castor were late disclosing stock trades.
  • Insider has this year identified more than 10 members of Congress who’ve violated the STOCK Act.
  • Violators usually receive a modest fine — but can face stiffer penalties, too.

Three Democratic members of Congress appear to have violated a federal transparency law by disclosing their stock trades weeks or months late.

Massachusetts Rep. Lori Trahan and Florida Reps. Debbie Wasserman Schultz and Kathy Castor each signaled their tardiness on thousands of dollars worth of financial transactions via their own recently filed congressional records.

In Trahan’s case, she sold up to $15,000 in the software company Stella Connect. Trahan failed to properly disclose this transaction that took place on September 10, 2020, according to an Insider analysis of her recent filing.

Wasserman Schultz, a former chair of the Democratic National Committee, purchased up to $15,000 in a telecommunications product company Westell Technologies in October 2020 but didn’t disclose the trade until July 27, according to her report submitted to House officials. 

Wasserman Schultz also reported on July 27 that a dependent child purchased up to $45,000 worth of Westell Technologies shares on the same day.

Castor’s latest congressional records show that she failed to disclose within the prescribed 45 days up to $45,000 worth of Berkshire Hathaway Inc. stock she acquired last summer. Relatedly, she was late disclosing up to $30,000 worth of additional Berkshire Hathaway shares she reported acquiring in June.

House lawmakers violate transparency provisions of the STOCK Act if they don’t formally and publicly disclose stock trades within 45 days of any transaction, including those made on their behalf by financial advisors. They have even less time — 30 days — to disclose any trade that they’re personally aware of, such as ones they make themselves. Congressional ethics officials review potential missteps and can impose fines of $200. 

Trahan’s spokesperson Francis Grubar told Insider that the congresswoman has not been contacted by anyone on the House Ethics Committee but she is willing to pay the fine.

“Over the course of filing her annual personal financial disclosure, Congresswoman Trahan recognized that a divestment of her holdings should have precipitated a periodic transaction report. She immediately filed a PTR to proactively rectify the situation,” Grubar said in a statement. 

In Castor’s case, the stock buys appear to be part of semi-regular orders Castor places via a jointly held E-Trade account. Castor has been pumping money into the holding company of billionaire investor Warren Buffett almost exclusively throughout the pandemic, feathering her nest egg with up to $15,000 worth of Berkshire stock at least once a month.  

The corresponding Berkshire stock — BRK.B — was worth $194 a share a year ago, on July 27, 2020. It traded at an all-time high of $295 a share on May 10, 2021. 

Castor did not respond to repeated requests for comment. The office of Wasserman Schultz also did not respond to an Insider inquiry. 

The disclosure failures follow a string of others involving both Democrats and Republicans in Congress. 

On July 29, the nonpartisan Campaign Legal Center filed separate congressional ethics complaints against Sen. Tommy Tuberville, an Alabama Republican; Rep. Pat Fallon, a Texas Republican; and Rep. Blake Moore, a Utah Republican, for allegedly violating the STOCK Act.

Others who’ve run into trouble include Sen. Dianne Feinstein, a Democrat of California; Rep. Tom Malinowski, a Democrat of New Jersey; Rep. Pat Fallon, a Republican of Texas; Rep. Dan Crenshaw, a Republican of Texas; Rep. Blake Moore, a Republican of Utah; and Sean Patrick Maloney, a Democrat of New York.

Former Rep. Harley Rouda, a Democrat of California who’s attempting a comeback, also failed to properly disclose stock trades.

Angus King

Sen. Angus King, an independent from Maine.

Alex Wong/Getty Images


For Angus King’s family, a COVID-19 testing company

Mary Herman, the wife of Sen. Angus King, an independent from Maine, in June purchased up to $15,000 worth of stock shares in software company Adobe Inc. and up to $15,000 worth of Thermo Fisher Scientific Inc., according to a new filing with the US Senate.

Thermo Fisher Scientific makes a variety of medical and diagnostic products, including those that specifically pertain to COVID-19.

“With innovative solutions and a reliable supply chain already helping meet the unprecedented demand for trusted COVID-19 testing, we continue to expand our high-quality solutions and accelerate innovation with urgency, addressing current and future challenges,” the company advertises on its website.

King’s wife bought Thermo Fisher Scientific stock on June 24, when the stock closed at about $495 per share. Since then, the stock price has steadily increased, cracking in the $540-per-share mark in late July. 

Thermo Fisher Scientific is a government contractor. In 2020, for example, it provided the US government with “highly specialized viral transport media for COVID-10 sample collection.”

Thermo Fisher Scientific has already spent more than $2.3 million lobbying the federal government in 2021, according to federal lobbying data compiled by OpenSecrets. That’s more than the company has spent in any previous year.

Among the specific bills on which Thermo Fisher Scientific has lobbied is S. 1693, the “Medical Supplies for Pandemics Act of 2021.” 

The company disclosed that its lobbying efforts on this bill involved “diagnostic test reimbursement and regulatory policies,” “COVID-19 preparedness products and services,” “K-12 COVID-19 school testing programs,” and “COVID-19 testing programs.”

King’s office acknowledged an Insider request for comment Friday afternoon and said it would reply Monday.

mark kelly nasa astronaut reuters RTXXFPD

Before Arizona voters elected him to the US Senate, Mark Kelly was a NASA astronaut.


Kevin Lamarque/Reueters



Eyes on Mark Kelly’s new blind trusts

Sen. Mark Kelly, an Arizona Democrat, has established blind trusts for himself and his wife, former Rep. Gabrielle Giffords, according to a voluminous filing submitted in late July to the US Senate.

Most of the blind trusts’ assets are in bonds, as well as mutual, money market, and exchange traded funds. Several individual investments are worth into the six- or seven-figure range, according to the disclosure.

But Kelly, a former NASA astronaut, also reported an investment in Boom Aerospace, a company developing supersonic commercial aircraft. The investment is valued at between $100,001 and $250,000. (Members of Congress are only required to disclose such asset values in broad ranges.)

 

Another asset in one of the blind trusts: an investment worth between $100,001 and $250,000 in Arizona-based World View Enterprises.

The company advertises providing “raw and analyzed high resolution imagery and data products to government and commercial customers” using high-altitude balloons that “transit the stratosphere with sensors that loiter over large areas of interest and provide persistent observation and data collection for a wide variety of applications.”

U.S. Assistant Secretary of State for Democracy, Human Rights and Labor Tom Malinowski speaks to the media during his visit to Lalish temple in Shikhan, Iraq, February 24, 2016. REUTERS/Ari Jalal

Rep. Tom Malinowski, a Democrat from New Jersey, is facing scrutiny for his stock trades.

Thomson Reuters


Tom Malinowski finally files late disclosures

Rep. Tom Malinowski, a Democrat from New Jersey, is facing congressional ethics complaints and a related investigation after Insider in March revealed he failed to disclose dozens of stock trades. Among them: a flurry of pandemic-sensitive stocks in early 2020, as COVID-19 began gripping the United States. 

Malinowski in July retroactively filed disclosures for trades he made in 2019 and amended several disclosures he made this year.

By law, Malinowski should have disclosed the trades made in 2019 within 45 days of making them. Some of these disclosures are more than two years late.

In July, Malinowski’s chief of staff, Colston Reid, told the New Jersey Globe that the congressman would stop trading stocks until the House Committee on Ethics approved his request to create a blind trust for his assets.

Malinowski had continued to aggressively trade stocks as recently as this spring.

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