Republican Rep. Byron Donalds failed to timely report numerous stock trades; a bipartisan problem

A Washington-based watchdog group asked the Office of Congressional Ethics (OCE) this week to investigate rising Republican Congressman Byron Donalds for failing to promptly report more than 100 stock trades by Donalds and his wife valued at up to $1.62 million.

A federal disclosure law, the Stop Trading on Congressional Knowledge (STOCK) Act, and House rules require members of Congress to disclose within 45 days individual stock transactions on “Periodic Transaction Reports” (PTRs). The law and rules were enacted to provide the public with timely information about elected lawmakers’ potential conflicts of interest.

In its letter to the independent, nonpartisan OCE, the Campaign Legal Center wrote that it reviewed the recently released financial disclosure records of Naples-based Donalds, who since 2021 has represented Southwest Florida from Marco Island through Cape Coral, “and Rep. Donalds is the only member [of Congress] we found who completely failed to report any PTRs for two years.”

“The undisclosed trades included stocks in companies that fall under the jurisdiction of the House Financial Services Committee, on which he serves. Certain companies also contributed to Rep. Donalds’s campaign committee and lobbied on legislation that he sponsored or co-sponsored,” said the letter signed by the group’s vice president, general counsel and senior director of ethics Kedric Payne and two others.

The Campaign Legal Center said Donalds only disclosed the stock trades when he filed annual financial disclosure reports in 2023 and 2024, “which was more than a year after most of the transactions occurred,” it wrote.

Rep. Donalds’s office did not immediately respond to a request for comment.

‘Widespead and bipatisan trend’

The Campaign Legal Center noted that it has previously filed similar complaints against both Republicans and Democrats.

“While Rep. Byron Donalds’s violations of the STOCK Act are significant, his behavior is unfortunately not an anomaly in Congress,” Payne said when its complaint was released. “There is a widespread and bipartisan trend of lawmakers failing to promptly disclose if they engage in stock trades, which fuels more ethics violations.”

Payne also urged Congress to pass the bipartisan Ending Trading and Holdings in Congressional Stocks (ETHICS) Act, which would ban members of Congress from trading stock in individual companies and heighten financial penalties for violations.

The OCE reviews allegations of misconduct against House members, officers and staff. It has the power to refer matters to the House Ethics Committee. The OCE is governed by a board whose members are private citizens who cannot work for the federal government. It has a professional staff of attorneys and others with expertise in ethics laws and investigations.

The Campaign Legal Center’s letter said Donalds, who has stated that he previously “traded securities for a living” is well aware of the disclosure requirements. It cites Donalds’s publicly stated views on Facebook on March 7, 2022 when he said members of Congress who violate the STOCK Act “that’s when you have to have sanctions and the House has to get real.”

Donalds’s TV appearances were highly critical of then-House Speaker Nancy Pelosi, D-CA, regarding her husband’s stock trades.

“When determining whether Rep. Donalds knowingly and willfully violated the STOCK Act, the OCE should determine if there is probable cause to believe that he intended to hide the transactions from public scrutiny at the time of trades,” the Campaign Legal Center letter says. “For example, Rep. Donalds likely would not have been able to make his numerous television appearances to criticize the stock trades and non-compliance of other members of Congress if he had disclosed his stock trades in companies that created an appearance of conflict with his official duties.”

‘TRADES IN COMPANIES DONALDS HELPED REGULATE

In his short career in Washington, Donalds has been a frequent on-air guest, most notably on FOX “News.” He’s a staunch supporter of healthcare companies and private healthcare insurance companies.

“Obamacare is a thinly veiled attempt at a government takeover of the health insurance delivery system, ultimately leading to a single-payer socialist system,” Donalds says on his campaign website. “In order to lower costs in the healthcare market, we must provide healthcare tax benefits and incentives to individuals, all while removing the current tax treatments from businesses.”

The complaint lists more than three dozen companies that Donalds and his wife traded over the two-year period – from Alcoa (AA) and Alphabet Inc. (GOOG) to Zebra Technologies (ZBRA) and Zions Bancorporation (ZION).

But the complaint focuses on 12 transactions in 2023 involving six companies that fall under the jurisdiction of the Financial Services Committee that Donalds serves on.

The companies: Elevance Health Inc., Humana Inc., JP Morgan Chase & Co., MSCI Inc., RLI Corp. and WaFD Inc.

The letter notes that Elevance Health, an insurance provider based in Indianapolis, IN, contributed $2,500 and JP Morgan’s PAC contributed $3,000 to Donalds’s campaign committee in 2023. Further, JP Morgan lobbied Donalds on five bills he co-sponsored in 2023 and 2024 – House Joint Resolutions 121 and 122, House Resolution 7521, 2743 and 2930.

“Consequently, even if Rep. Donalds did not have an actual conflict with his stock trades or engage in insider trading, the appearance of a conflict of interest existed. Such conflicts may explain why the trades were not disclosed,” the letter says.

The penalty for filing a late periodic transaction report is a measly $200. However, a House memorandum sent to all members in June 2020 states that the attorney general “may pursue either civil or criminal penalties against an individual who knowingly and willfully falsifies a statement or fails to file a statement required by the EIGA [Ethics in Government Act]. The maximum civil penalty is $61,585. The maximum criminal penalty is up to one year in prison and a fine of up to $61,585.”

Donalds is running for re-election against Democrat Kari Lerner, a Realtor from Cape Coral. Federal records show that Donalds has raised more than $3 million to Lerner’s $130,000.