How Burr's stock scandal shocked the Senate

Burgess Everett and Andrew Desiderio

The Senate Intelligence Committee on Wednesday met as usual in a classified room in the Capitol. During the meeting, Chairman Richard Burr discussed the next time the secretive panel would gather.

Less than 24 hours later, Burr was publicly under FBI investigation, authorities seized his cellphone and he relinquished his chairmanship. The next time the committee meets, someone else will be at the helm.

“We met just yesterday in the SCIF for hours. And there was no indication at that time,” Sen. Susan Collins (R-Maine) said Thursday of the surprise decision by Burr to step down from his post temporarily amid FBI scrutiny. “So I feel bad … I have no idea what the investigation is going to find, but I certainly hope it turns out well for him.”

After bubbling for nearly two months, the Senate’s stock-trading practices exploded into a full-blown scandal in the past 24 hours. And even senators not currently under a microscope are actively trying to shed the perception that they’re trying to cash in on their elected office.

On Thursday alone, the Intelligence Committee’s two previous chairs, Burr and Sen. Dianne Feinstein (D-Calif.), both said they had answered questions from federal investigators about stock trades made in the early stages of the pandemic. (Feinstein said the questions were basic, unlike Burr, who was served with an FBI search warrant for his cellphone.)

A third senator, Kelly Loeffler (R-Ga.), refused to say whether she’d been contacted by the FBI about her stock transactions. But she said the FBI did not serve her a warrant. Meanwhile, Burr has been telling people close to him he intends to fight all accusations of wrongdoing. Publicly, he said he’d serve out the rest of his term.

And the Senate as a whole faced a reckoning over whether some of the nation’s most powerful politicians should be trading stocks at all, amid claims of insider trading and self-enrichment. The STOCK Act prohibits lawmakers and aides from buying or selling stocks based on information gleaned as part of their official duties. A member of Congress has never been successfully prosecuted under the 2012 law.

Sen. Kelly Loeffler, R-Ga., departs after the impeachment acquittal of President Donald Trump, on Capitol Hill, Wednesday, Feb. 5, 2020 in Washington. (AP Photo/Alex Brandon)

“Maybe the bottom line is, if you’re going to be in the Senate you can’t own any stock. Or at least own mutual funds. Who knows, people could say you’re gaming an index fund,” said Sen. John Cornyn (R-Texas). “Part of the joy of serving in public office.”

Burr sold hundreds of thousands of dollars in stocks earlier this year around the time he was receiving closed-door briefings on the coronavirus pandemic, which eventually sent the stock market into a tailspin. His brother-in-law reportedly sold thousands in stocks at the same time, ProPublica reported. Feinstein, meanwhile, voluntarily recently turned over documents to the FBI relating to her husband’s stock trades. And Loeffler similarly sold off large sums around the time she received briefings on the virus. All three senators have denied any wrongdoing.

Several senators have made anti-corruption a hallmark of their campaigns. Sen. Elizabeth Warren (D-Mass.), for example, has proposed legislation banning members of Congress from owning or trading individual stocks. And she said her time on the presidential campaign trail reinforced that voters are incensed by even the perception of corruption among their elected representatives.

“The American people should never wonder whether or not the top officials in this government are working for them or are working for their own personal financial gain,” Warren said in a brief interview. “I think we ought to change the law. And I’m going to keep pushing.”

Still, Warren declined to criticize Burr specifically. And the chummy Senate is an awkward place for scandal. The body of 100 is a back-slapping old-school institution where it’s rare for senators, even of opposing parties, to publicly pressure one another to step down from prominent positions or resign from office. No sitting senator has called on Burr to resign.

The laid-back Burr, a quirky North Carolinian who often doesn’t wear socks and brings his own lunches to GOP party meetings to save a few bucks, is generally well-liked by Democrats and Republicans. During the 2008 financial crisis, he told his wife to withdraw as much money as possible from an ATM.

So in the 90 minutes before Senate Majority Leader Mitch McConnell (R-Ky.) announced that Burr would step aside from chairing the panel, Republicans defended the North Carolina Republican and Democrats declined to lean on him to step down. When McConnell put out his statement around noon on Thursday, several senators were informed of the news by reporters asking for their reaction.

“I didn’t see this coming,” Senate Minority Whip Dick Durbin (D-Ill.) said of the quick turn of events.

Every few years, at least one of the chamber’s members stumbles publicly. Sen. Robert Menendez (D-N.J.) was indicted in 2015, and eventually acquitted, on corruption charges. Before that, in 2011, Sen. John Ensign (R-Nev.) resigned amid an ethics investigation of his attempts to hide an affair.

It’s been several years since a senator has found themselves in legal hot water like Burr. But to some of the Senate’s newer members, facing reporters’ questions about their colleagues’ alleged misconduct seemed all too familiar after more than three years of President Donald Trump.

“It all just adds to the kind of perception people have of this place in general. And sadly, it was just due to misjudgment,” said Sen. Mike Braun (R-Ind.), who was first elected in 2018. Many voters “have almost become steeled to it … I don’t think it was as shocking as it might have been, say, 10 years ago.”

Sen. Mike Rounds (R-S.D.), who is in his first term, said he was “disappointed” to learn that the FBI served a warrant on Burr, and he echoed his GOP colleagues in saying the law-enforcement process should “play out.”

“If there was no investigation, then people would say there was a cover-up,” Rounds said. “This clearly shows there was no cover-up.”

The Senate Ethics Committee “severely admonished” Menendez in 2018 but never publicly threatened to expel him, so Burr’s ethics investigation may not have much teeth, either. And given the high bar for a conviction of insider trading, Burr’s problems may be more political than legal.

“I don’t trade individual stocks. But I think there would have to be a pretty high bar to prove that you’re trading on information that isn’t available to the public,” said Sen. Chris Murphy (D-Conn.), who like many senators has attended closed-door briefings on coronavirus. “There’s often a lot of information that we have here that is publicly available.”

Burr isn’t running for reelection in 2022 when his term expires. Yet his snap decision to step away from a committee that oversees the very FBI that’s investigating him showed some deference to party leaders eager to avoid any cloud over their attempts to defend their majority this fall.

At the end of the day, the mood in the Senate was subdued.

“I’m saddened by this turn of events. I know that he was being full cooperative, so I don’t understand yesterday’s events,” Collins said of the FBI action. Burr’s decision to step back, she added, was “certainly not something he consulted with committee members about. I’ve talked with several, and we were all surprised.”