Jacquelyn Martin/AP Photo
Donna Shalala, pictured here, still has some explaining to do on her stock disclosures.
First Response
For maybe the first time ever, somebody listened to me. A few days ago, I asked readers to take a look at bailout oversight panel commissioner Rep. Donna Shalala’s (D-FL) periodic transaction report (PTR), which shows 556 stock trades made since she entered Congress. Shalala didn’t post these transactions, in violation of the federal STOCK Act, until this week. I wanted to see whether this encompassed all the stocks listed in her initial financial disclosure, and whether anything else notable was in the report.
Amazingly, somebody took the time to do this. Namely, reader W, who sent me over a few interesting pieces of data.
First of all, there are three stocks on the PTR where we have only a purchase, and no corresponding sale: Intersect ENT, Inc. ($1,000-$15,000), MGP Ingredients, Inc. ($1,000-$15,000), and Tactile Systems Technology, Inc. ($1,000-$15,000). All of these purchases were in Shalala’s rollover IRA account. Worryingly, two of these are medical technology companies; Intersect ENT tries to treat sinusitis, while Tactile Systems produces medical devices. MGP Ingredients is mostly an alcohol distiller. Shalala, a former Health and Human Services Secretary, sits on the House Education and Labor Committee, which has some jurisdiction over health care.
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In addition, there are a handful of stocks that were listed on Shalala’s financial disclosure where there is no sale in the PTR. This includes UnitedHealth, where Shalala also once served on the board. Shalala has already stated that she has not sold all of her UnitedHealth stock; based on the records, she probably has about $250,000 of it left.
Other trades raise new questions. For example, Shalala held between $1,000 and $15,000 in stock of Gannett, the newspaper chain. On the PTR there’s a listing of an exchange, from when New Media Investment Group merged with Gannett. But there’s no listing of any sale of the new stock, which has the call letters NEWM. The same with TEGNA, Inc., a media company created when Gannett split in two in 2015. Shalala has between $15,000 and $50,000 in TEGNA, and was a director on the board there at one point. Lennar, the large homebuilder where Shalala was also a board member, also did not have any corresponding stock trades. As of the end of 2018, Shalala had between $115,000 and $300,000 in equity with that company.
There’s no corresponding trade for Teva Pharmaceuticals (Shalala held $1,000-$15,000 in stock as of 2018), the large generic drugmaker. Similarly, there are no corresponding trades for Watsco, an air conditions and refrigeration equipment supplier ($15,000-$50,000), or Aspen Insurance, a property and casualty insurance company ($1,000-$15,000).
In all, that’s 10 individual stocks worth potentially millions of dollars. (It’s annoying that Congressional disclosure reports allow for a wide range of asset values.) And there may be more; my reader/researcher didn’t fully detail whether the stock sales and their values matched the value in the financial disclosure.
First of all, this reaffirms that members of Congress should not hold any individual stocks, period. Second, I suppose a few oversights are to be expected when you’re scrambling to disclose 556 transactions at once. But again, Shalala has been tasked with an oversight job, regarding sophisticated transactions of financial assets. If she or her office cannot manage to properly list her own stock history—or, worse, if she’s failing to disclose continued holdings in several individual stocks—she has no business as part of any oversight entity. I’ll leave her status in Congress up to the voters.
Shalala’s office was contacted to explain these discrepancies. They have not returned my request for comment.
UPDATE: I should note that there's a plausible explanation for some of these stocks. Only trades worth up to $1,000 need to be reported. So if the original holding was slightly above that level, and if it dips below that and is then sold, it wouldn't have to be reported. That could potentially explain three of the stocks with no trades: Gannett, Teva, and Aspen Insurance. It would not explain UnitedHealth (which Shalala has already said she's retaining), Lennar, TEGNA, or Watsco. The stock purchases with no corresponding sale—Intersect, Tactile Systems, and MGP— were also bought with as little as $1,000, so it's plausible that they were later sold for below that number.
Three things on this. One, this still doesn't explain why Shalala is trading stocks, in the case of the latter three, while still in Congress. Sure, it's not illegal, but her story is that she was working tirelessly to divest since she became a candidate. So why make any purchases at all? Second, if the de minimis sales were a known issue, Shalala's office could have mentioned that in a press release. If they want to do the bare minimum disclosure, fine, but given the significant disclosure lapses already at issue, you'd think they'd button everything up. And third, that still leaves four stocks with a significant amount of shares in Shalala's portfolio. Again, not illegal, but the entire narrative is that she started divesting immediately to remove conflicts of interest.
And none of this is particularly interesting but for the fact that Shalala is on a bailout oversight panel where disclosure will be a major topic of discussion, as well as financial trading.
The Second First Wave
I think we need to better define terminology around this crisis, because it’s even gotten away from infectious disease experts. They warn of a “second wave” as restrictions loosen across the country, but in order to have a second wave the first wave has to actually end.
China reopened areas from lockdown after new cases dropped into the single digits. We’ve been stuck at between 25,000 and 30,000 new confirmed cases per day for several weeks, actually. Testing has finally broken through a little bit in the last week, but it still isn’t nearly enough to see the full picture. Deaths have plateaued: not rising but not falling, just a meat grinder of close to 2,000 dying every day.
This is the first wave. And putting people in close proximity at this time inside buildings and workplaces just seems unbelievably dangerous. (Not outdoors; my read of the science is that beaches and parks, as long as people are smart and reasonably spaced, are fine.)
The other part of this is that trying to build a useful curve in a nation as big as the U.S., where the states have taken different approaches, tells you nothing. The nation has not plateaued, actually; New York City has suppressed its outbreak and the rest of the nation is still on the way up. Or rather, there are 50 states on all sorts of different trajectories, and aggregating them isn’t useful in understanding where resources need to go or what policies should be set.
With Georgia and other states reopening, you could see a new ramp on top of the current ramp. But even that isn’t guaranteed. The craven reason would be if states like Florida decide to just hide the data. The more logical reason is that people aren’t interested in risking their lives for a bloomin’ onion and a Martin Lawrence movie, so nobody will show up to potential death traps.
The only thing you can say definitively is that the University of Washington model is incredibly wrong (though I guess it didn’t factor in the stupidity of our policymakers). And the only way to fix the situation is to beat the virus. We’re doing almost nothing to facilitate that right now (maybe we’ll luck into a remdesivir treatment, but other than that, nothing), and the combination of good and bad state policy has us in a period of stasis.
This Fresh Air episode with Donald McNeil, health reporter for the New York Time, has more.
Today I Learned
- As I’ve been saying, small businesses with high rents have no use for the PPP, and that knocks out businesses in high-rent areas on the coasts. It’s not a “Trump hates blue states” thing, it’s more “blue states have high rents.” (Wall Street Journal)
- Rep. Darren Soto (D-FL), a memory lane figure from the foreclosure crisis, has a bill confirming that no lump sum payments are due after mortgage forbearance. (Congress.org)
- OSHA citations down 70 percent during the pandemic. (Accountable.us)
- Remdesivir gets emergency FDA approval as a COVID-19 treatment. (Vox)
- Foreign workers previously on student or exchange visas got stimulus checks. (Politico)
- You have to feel for Warren Buffett and his $50 billion on-paper loss. Or don’t feel for him, actually. (CNBC)
- Unrelated, but the sale of .org to a private equity vulture has been denied. A good grassroots win. (Boing Boing)
- The grim reaper guy. (HuffPost)
