Gallagher requests review of trading
The CFO's tax returns show he traded stocks in insurance when he was insurance commissioner.
By JONI JAMES
Published February 1, 2006
TALLAHASSEE - Florida Chief Financial Officer Tom Gallagher said Tuesday that he would ask his department's top lawyer to review private stock investments that Gallagher made in recent years that included stakes in companies he had a role in regulating.
Gallagher strongly denied breaking any laws but said he would seek the legal review to determine if there is anything "I need to correct."
The St. Petersburg Times reported Tuesday that federal tax returns show that in 2002 Gallagher traded millions of dollars in insurance stocks in his last year as the state's elected insurance commissioner.
In 2004, before and after the state Cabinet voted to allow AES Corp. of Virginia to lay a natural gas pipeline under delicate coral reefs off Broward County, Gallagher traded more than $1-million in AES stock, the newspaper reported. Gallagher, who is a member of the Cabinet, owned 1,000 shares in the company the day he voted to approve the pipeline.
Gallagher acknowledged Tuesday that he made some of the stock trades from his state office. But he said it was only during down time, "the morning, afternoon ... or lunch."
Gallagher used an online brokerage account to make hundreds of trades each year in 2002, 2003 and 2004, but he said he never used his state computer for the transactions.
"We're in campaign mode. Every day there is a new rumor, a new innuendo," Gallagher said. "The facts are that I disclosed all (of those stock transactions), and I do it every year in my financial disclosure. I didn't feel a need to redisclose them."
Gallagher's comments came just after he appeared along with the three other gubernatorial candidates at the Associated Press' annual planning seminar for Florida reporters and editors.
Gallagher's stock trades did not come up during the presentations each candidate made. Also attending were Attorney General Charlie Crist, Gallagher's rival for the Republican nomination; U.S. Rep. Jim Davis, D-Tampa; and his party rival, state Sen. Rod Smith, D-Alachua.
Several top Republican leaders, including Gov. Jeb Bush, supported Gallagher's contention that he had properly disclosed his ownership when he filed his annual disclosures with the state ethics commission and when he posted his tax returns on his gubernatorial campaign Web site.
The documents don't show his full stock portfolio. They disclose only what stock trades he made in a given year.
"I'm not aware" that he broke the law, Bush said. "But I'm not a lawyer. I'm sure others will make that determination, but I don't think he did."
Senate President Tom Lee, one of four candidates vying to replace Gallagher as CFO, said he wouldn't have bought the stocks. Gallagher's primary opponent in the campaign, Crist, said he wouldn't have either.
"It may have been illegal, but I don't know all of the facts," Crist said, "so it's not appropriate for me to judge."
Under Florida law, state officials are prohibited from having a contractual relationship of any kind with a business regulated by the officer's agency. A 1991 opinion by the ethics commission said it was a conflict of interest and against state law for the state's elected comptroller, who then regulated banks, to hold bank stocks he inherited.
Gallagher told the Times on Monday that he wasn't aware of the 1991 opinion.
Exactly what Gallagher will ask Department of Financial Services General Counsel Carlos Muniz to review was unclear. Muniz, a former lawyer in Bush's office, gave $500 to Gallagher's campaign last year.
Times staff writers Alex Leary and Steve Bousquet contributed to this report. Joni James can be reached at 850 224-7263 or jjames@sptimes.com