Financial Forms Flummox Members

Posted June 23, 2010 at 6:23pm

Speaker Nancy Pelosi is confused, and she’s not alone.

The California Democrat is among a dozen Members who appear to have stumbled over a new reporting requirement on their annual financial disclosure forms, a cursory review of hundreds of documents reveals.

The errors are tied to a new mandate that Members check a box on their disclosure form if a sale of any asset — stocks, real estate or other items — produced capital gains of more than $200.

The Committee on Standards of Official Conduct added the section to this year’s forms in an apparent attempt to address a recurring problem of Members reporting sales of stock without reporting capital gains that they realized in those sales.

Instead, the new box has tripped up Pelosi and other Members, who have committed a range of errors in filing this year’s disclosure forms.

But those lawmakers might have an excuse: The instruction manual that accompanies the annual forms makes no mention of the new requirement.

Although the ethics committee included directions for the new “capital gains” section in a draft of its instruction manual released earlier this year, it recalled that booklet in April after Roll Call inquired about other changes, including an unrelated provision that would for the first time have defined gay married couples as spouses for the purposes of filling out the annual disclosure forms.

The panel subsequently published an instruction manual that is almost indistinguishable from previous years and makes no mention of the new capital gains section.

Only one document — a printer-friendly version of the financial disclosure form that Members must fill out by hand — explains the new reporting requirement. An electronic version of the disclosure form does not include the same instructions.

“Capital Gains — If a sales transaction resulted in a capital gain in excess of $200, check the ‘capital gains’ box and disclose this income on Schedule III,” the PDF version states.

Under the new requirement, Members must mark a box on the “Transactions” section of their report indicating a capital gain but must also report the dollar amount on the “Assets” section of their report.

In Pelosi’s case, the lawmaker acknowledged she misunderstood the section, believing it applied to the gross transaction amount lawmakers must report for each sale or purchase.

“We originally incorrectly interpreted the column as requiring a ‘Yes’ response to any transaction ‘in excess of $200,'” Pelosi wrote in a June 8 amendment to her May 17 disclosure form, which covers calendar year 2009. “We have properly revised the column to reflect the fact that of the thirteen sales transactions, eleven were losses and two were gains.”

In Rep. Brian Bilbray’s report, the California Republican failed to mark a capital gain on the sale of a Helena, Mont., property in a transaction valued at $100,000 to $250,000.

After being contacted by Roll Call, Bilbray’s office amended the report to indicate a capital gain but did not include a dollar figure on the form. In a second amendment, Bilbray disclosed rent and capital gains valued at $15,000 to $50,000, more than the $2,500 to $5,000 he first reported from rent alone.

On the other hand, Rep. Mike Simpson (R-Idaho) marked the new capital gains box with a “No” on the sale of a portion of his wife’s Blackfoot, Idaho, property despite reporting capital gains income from the property valued at $100,000 to $1 million elsewhere in his report.

Simpson spokeswoman Nikki Watts said the capital gains were listed in error and an amendment will be filed. “They actually took a loss on that portion of the property,” Watts said. The report states the land sold in a transaction valued at $100,000 to $250,000.

Similarly, Rep. Dave Loebsack marked the capital gains box with a “Yes” tied to his sale of shares of “TIAA Real Estate” in a transaction valued at $100,000 to $250,000 but stated capital losses for the same asset elsewhere in his report. A spokeswoman said the Iowa Democrat marked the box accidentally and should not have reported a capital gain.

A spokesman for Rep. Steve Scalise said the Louisiana Republican also incorrectly marked the capital gains box “Yes” for each of his stock sales in calendar year 2009 and will file an amendment.

Scalise reported selling all but four of his assets in 24 transactions valued at $1,000 to $15,000 and one account in a transaction valued at $100,000 to $250,000. But Scalise aide Stephen Bell said none of those sales garnered more than $200 in capital gains.

Some lawmakers skipped the new reporting requirement altogether.

Rep. Vern Buchanan appeared to file his report on a previous year’s edition of the disclosure form that does not include the new capital gains section.

Buchanan spokeswoman Sally Tibbetts said this week that the ethics committee had not raised the issue with the Florida Republican’s office and that Buchanan does not plan to file an amendment.