U.S. Rep. Debbie Wasserman Schultz filed disclosures reporting she and her children bought stock in a technology company but waited months after the deadline to make the purchases public.
Reports filed last week by the Broward/Miami-Dade County Democrat show four stock buys, on Oct. 13, in Westell Technologies Inc., which provides what the company calls “high-performance wireless infrastructure solutions.”
The deadline for reporting the transactions was the end of November, making her disclosure eight months late.
“This was an oversight, and corrected once it was recognized,” a spokesman for Wasserman Schultz said via email.
The amount involved is unclear. Because of the way congressional financial reporting rules work, stock buying and selling is reported in broad ranges. In this case, there were a total of four purchases on the same day, each in the range of $1,001 to $15,000.
That makes the value of the stock when it was bought somewhere between $4,004 and $60,000. The disclosure form said one purchase was for Wasserman Schultz and three were for dependent children.
The disclosures were discovered and reported by the news site Insider and the watchdog site congresstrading.com, which maintains a subscription database of congressional financial disclosures.
Insider also reported that U.S. Rep. Kathy Castor, a Democrat who represents Tampa, was late in disclosing two purchases of Berkshire Hathaway stock. Berkshire is the conglomerate run by Warren Buffett.
Wasserman Schultz investment
Wasserman Schultz’s investment was different. Westell is a so-called “penny stock,” which is a security that trades for less than $1 a share.
It hasn’t been lucrative, at least so far. Marketwatch.com reports Westell’s share price was 78 cents on Oct. 13. It soon declined to 50 cents, on Oct. 21, and has since rebounded. At the close of trading Monday it was 79 cents a share.
By contrast, the overall stock market is way up during the same time. The Wilshire 5000, the broadest stock market index, has increased 27% since Oct. 13.
Westell’s website says the company’s “wireless infrastructure solutions [are] focused on innovation and differentiation at the edge of communication networks where end users connect” allowing “service providers and network operators to improve performance and reduce operating expenses.”
The disclosure form doesn’t specify which children bought stock. There are three entries for “DC,” which means dependent child, a category that Kedric Payne, general counsel and senior director for ethics at the Campaign Legal Center, said isn’t used very often. The fourth is for Wasserman Schultz.
The Campaign Legal Center, which has scrutinized and filed complaints against Democrats and Republicans, was founded by a former member of the Federal Election Commission.
Under the Stop Trading on Congressional Knowledge Act, known as the STOCK Act, members of Congress are required to disclose stock trades within 45 days, Payne said. There are no exceptions.
Payne and Insider’s Deputy Washington Bureau Chief, Dave Levinthal, said late disclosures are becoming increasingly common.
Levinthal said Insider began tracking the late filings this year and so far has found at least 10 representatives and senators filing late disclosures. “It seems to be a very bipartisan phenomenon, violating the STOCK Act,” he said.
Often what happens, Payne said, is members of Congress don’t report the trades as required. They’ll file once they start preparing their annual financial disclosures — which are due imminently — because it will become obvious if they suddenly report a new holding in a company that wasn’t in the previous year’s disclosure.
The delay in reporting defeats one of the purposes of the law, Payne said, which is to provide real-time transparency about what the lawmakers are doing financially — and allow the public to assess if they might be doing something wrong, such as insider trading.
“The key way to fight against any potential insider trading is to give the public these disclosures so they can see whether or not their member of Congress is possibly engaging in a conflict of interest with their stock trades,” Payne said. “They file these disclosures months after these transactions, and it becomes unclear if it is intentional to hide a possible problem, or simply a mistake. But it’s happening so much that it’s difficult to assume that there is a mistake,” Payne said.
“People should be concerned,” Payne said.
Penalties for violating the STOCK Act vary, based on the whether the failure to file the report was intentional, Payne said. All late transaction filings are subject to a fee of $200, and can be assessed up to $200 per late transactions.
In rare cases in which there is evidence of intentional wrongdoing, someone who knowingly and willfully falsifies a statement or fails to file could potentially face civil or criminal penalties, including imprisonment if prosecuted. And all reports are filed under provisions of the False Statements Act, which provides for fines and imprisonment, for knowingly and willfully making a materially false, fictitious or fraudulent statement.
Other cases involve many more transactions than the ones involving Wasserman Schultz.
Last week, the Campaign Legal Center filed complaints with congressional ethics offices against U.S. Sen. Tommy Tuberville, R-Ala., U.S. Rep. Pat Fallon, R-Texas, and U.S. Rep. Blake Moore, R-Utah, for failing to file STOCK Act disclosures about multiple transactions.
The Campaign Legal Center said Tuberville failed to properly disclose nearly 130 separate stock and stock-option trades together worth at least $894,000 and as much as $3.56 million, Fallon failed to properly disclose 93 stock trades worth between $7.8 million and $17.53 million, and Moore failed to disclose 70 separate trades worth between $70,000 and as much as $1.1 million.
Former U.S. Rep. Donna Shalala, D-Fla., received scrutiny after the Miami Herald reported in 2020 that she had failed to comply with the STOCK Act’s reporting requirements for multiple stock sales in 2019.
“As a new member with a broker and attorney who were not familiar with the congressional disclosure rules, there was a misunderstanding,” her spokesman told the Herald at the time.
Shalala acknowledged what she said was a mistake in an interview with WFOR-Ch. 4. “Look, I knew what the law was,” she said. “I missed the deadlines. And I have to take responsibility, personal responsibility for doing that. No one else is responsible except for me.”
Shalala’s violations became campaign fodder — including a blistering Republican commercial —during her unsuccessful 2020 reelection effort.
Content syndicated from TheLibertyLoft.com with permission.