Facing calls for his resignation over the selling of hundreds of thousands of dollars in stocks weeks before the market crashed, the Senate Intelligence Committee chairman has asked congressional investigators to probe whether his actions amounted to insider trading.
Republican Sen. Richard Burr of North Carolina, who as the Intelligence committee chair was sitting in on regular confidential briefings about the novel coronavirus, sold his stocks even as he publicly downplayed the risk of the outbreak to voters. Burr sold as much as $1.72 million worth, records show, with large amounts in companies that later would be slammed in the market sell-off.
The senator’s stock sales, revealed in public disclosures that lawmakers are required to file, were first reported by ProPublica.
“I relied solely on public news reports to guide my decision on the sale of stocks February 13,” Burr said in a statement Friday morning regarding the stock sale that the records show was in the range of $628,000 to $1.72 million. “Specifically, I closely followed CNBC’s daily health and science reporting out of its Asia bureaus at the time. Understanding the assumption many could make in hindsight however, I spoke this morning with the chairman of the Senate Ethics Committee and asked him to open a complete review of the matter with full transparency.”
Among the stocks Burr sold was $150,000 worth of shares in Wyndham Hotels & Resorts, which has since shed two-thirds of its value. Burr also unloaded $100,000 worth of shares in Extended Stay America, whose stock price has been cut in half since then.
Similar stock sales were also disclosed in the public records by Georgia Republican Sen. Kelly Loeffler, whose husband is the chairman of the New York Stock Exchange. Loeffler, who also sold shares in companies that took a big hit, has denied any wrongdoing.
Loeffler and her husband began selling stock Jan. 24, the day she joined a private briefing for lawmakers by the Senate Health Committee that included administration officials leading the response to the outbreak. Her stock sales, totaling $1.2 million to $3.1 million, were first reported by the Daily Beast. In addition to the sales, Loeffler and her husband also bought between $100,000 and $250,000 in Citrix, a firm that makes teleworking software and has seen its value go up as Americans are directed to work from home.
“I want to set the record straight: This is a ridiculous & baseless attack,” Loeffler wrote in a tweet.“I don’t make investment decisions for my portfolio. Investment decisions are made by multiple third-party advisors without my or my husband's knowledge or involvement.”
California Sen. Dianne Feinstein, a Democrat, and Oklahoma Sen. Jim Inhofe, a Republican, also reported stock sales in the same time period, but they appear to be far more routine investment moves. Both the senators also said they do not manage the portfolios, and investment decisions are made without their involvement.
"Reports that I sold any assets are incorrect, as are reports that I was at a Jan. 24 briefing on coronavirus, which I was unable to attend," Feinstein said in a statement.
“Under Senate rules, I report my husband's financial transactions. I have no input into his decisions. My husband in January and February sold shares of a cancer therapy company. This company is unrelated to any work on the coronavirus and the sale was unrelated to the situation.”
Yet President Trump parted with some fellow Republicans critical of the Burr trades by grouping together all the senators who sold stock. After first saying in a news conference that he was not aware of the details, he then added: "I know everyone mentioned. Dianne Feinstein, I guess. And a couple of others. I don’t know too much about what it's about. But I find them all to be very honorable people. That’s all I know. And they said they did nothing wrong. I find them, the whole group, very honorable people."
The stock moves by Burr and Loeffler, however, have drawn particular scrutiny because they are so closely aligned with the market changes that accompanied the spread of the outbreak — and because they were making the moves while assuring the public the economy and markets were strong.
"Given the circumstances, Sen. Burr owes North Carolinians an explanation," said a Twitter post from fellow North Carolina Republican Sen. Thom Tillis, an unusual rebuke from a lawmaker in Burr's own party. "His self-referral to the Ethics Committee for their review is appropriate, there needs to be a professional and bipartisan inquiry into this matter, which the Ethics Committee can provide.
Others argue a criminal investigation is in order.
“Any halfway decent attorney general would by now have directed the DOJ to open criminal insider trading investigations into Sen. Burr and the other senators who exploited their positions to profit by endangering the public,” Harvard legal scholar Laurence Tribe posted on Twitter.
Loeffler was appointed to her seat in December by Georgia Gov. Brian Kemp, and she faces a competitive primary in her bid to hold onto it in this year’s special election. The Senate Leadership Fund, which is controlled by Senate Majority Leader Mitch McConnell (R-Ky.) has spent $2 million to help her, mostly attacking Loeffler’s GOP opponent. The organization now says it has no plans to spend further on Loeffler’s bid, though it says the move was unrelated to the scandal around the stock transactions.
Democrats also demanded action, with New York Rep. Alexandria Ocasio-Cortez calling for Burr’s resignation. Rep. Joaquin Castro, a Texas Democrat, also weighed in: "As a member of the House Intelligence Committee, I know that our committee receives sensitive information, including assessments and projections, before others in Congress and the general public (if ever)," Castro wrote on Twitter. "Sen. Burr should suspend his chairmanship pending investigation."
Fox News commentator Tucker Carlson, a favorite of the right, did not defend the senator.
“Maybe there’s an honest explanation for what he did; if there is, he should share it with the rest of us immediately,” Carlson said Thursday on Fox. “Otherwise, he must resign from the Senate and face prosecution for insider trading.”
The sell-offs were revealed under an Obama-era law that requires lawmakers to regularly disclose their trades. The STOCK Act, as it is known, was signed in 2012. There were just three senators who opposed the bill when it was approved by Congress. Burr was among them.