Trump Officials Warned of Coronavirus Economic Impact Before Senators Sold Off Their Stock

Erin Banco, Sam Brodey, Sam Stein
Photo Illustration by The Daily Beast/Getty

On Jan. 21, senators gathered in their chamber on Capitol Hill to formally begin the impeachment trial for President Donald Trump. For hours on end, they were unable to leave their seats let alone check their electronic devices or speak with staff. Consumed with listening to hours-long arguments, they paid little attention to much else other than the trial.

Then, three days later, in a private briefing, Trump administration officials from the Centers for Disease Control and Prevention and the State Department told a group of senators that they were growing increasingly concerned about a virus spreading throughout China. The administration first learned of the outbreak Jan. 3, officials have now said. But by the time they convened with lawmakers for the briefing, the novel coronavirus had killed 41 people and infected more than 1,200.

According to two individuals with knowledge of the briefing, officials stressed to senators that the coronavirus was contagious, deadly, and would eventually spread beyond China’s borders to the U.S., at which point it would pose serious challenges for the political system and the economy.

“It was clear that there would be significant economic effects,” an individual with knowledge of the all-senators briefing said, adding that during the briefing lawmakers pressed for the administration to come up with a plan to handle the economic fallout.

The briefing served as a wake-up call for senators who were at the time engrossed in the impeachment trial, spending eight hours a day stuck on the Senate floor for historic and weighty constitutional arguments and even more time off the floor strategizing about the president’s trial.

“For a lot of people it was like, ‘why am I being asked to go to this thing?” said one Senate aide. “It was an insane time.”

The briefing was hosted by the Senate Health Committee. Afterwards, some members began to sound the alarm more about the spread of the virus. Others insisted that fears were overblown. And at least two—North Carolina’s Richard Burr and Georgia’s Kelly Loeffler—began selling hundreds of thousands to millions of dollars worth of equities. 

Sen. Kelly Loeffler Dumped Millions in Stock After Coronavirus Briefing

The sales of between $1.2 million and $3.1 million in stocks jointly owned by Loeffler and her husband began the very day of the briefing, The Daily Beast first reported Thursday. On Friday, she insisted that the trades were entirely the work of a third party investment advisor with whom she shared no information and had no conversations about the transactions. Loeffler’s husband is Jeffrey Sprecher, the chairman of the New York Stock Exchange.

Burr acknowledged individually selling between $600,000 and $1.7 million in mid-February, but said the sales were prompted purely by public news reporting on the coronavirus, not by nonpublic information gleaned through his official duties.

Sources who spoke with The Daily Beast about the Jan. 24 briefing, and other congressional briefings over the last six weeks, said it was clear from what the administration officials said about the coronavirus that the U.S. would suffer financially, especially if there was community spread.

“There was a general sense conveyed of a rising crisis and uncertainty that might lead to someone wanting to sell everything,” one person with knowledge of the conversations in the briefing told The Daily Beast.

Another individual with knowledge of the Senate-wide briefings said administration officials spoke with senators about how the coronavirus could potentially limit things like cargo shipments and severely restrict essential supply chains. 

Some aides told The Daily Beast that in other early closed-door briefings, the administration was not providing much information that had not been made public at the time through news reporting. Still, many on Capitol Hill feel that having those briefings—some of which were unclassified—in the open would have armed the public with the same information, coming directly from U.S. public health officials, that lawmakers were benefiting from at the time.  

Since the senators’ stock trading was reported on Thursday, Democrats have been swift with condemnation. More notable, however, has been the blowback from the right. On Thursday night, Fox News’ Tucker Carlson called for Burr’s resignation, calling his action a “moral crime.” On Friday morning, Rep. Matt Gaetz (R-FL), a staunch ally of the president’s, tweeted that “‘Stock Selloff Senators’ isn’t exactly the most #AmericaFirst caucus to be forming in this time of crisis.” 

Fox News Grills Sen. Kelly Loeffler on Her Stock Dump: How Was This Not Insider Trading?

Even Burr’s fellow North Carolina Republican in the Senate—Sen. Thom Tillis, who faces a tough re-election fight this fall—tweeted on Friday that Burr “owes North Carolinians an explanation” and supported a “professional and bipartisan” inquiry into the matter. 

In a press briefing Friday morning, President Trump told reporters that lawmakers who had been singled out for their sell offs, including Burr and Loeffler, were “all honorable people.”

“They say they did nothing wrong,” Trump said. 

But in a possible bid to get out in front of the backlash, Burr announced that he’d spoken with the GOP chairman of the Senate Ethics Committee, Sen. James Lankford (R-OK), and asked him to open a “full review” of his trading activity. Loeffler told CNBC on Friday afternoon that she’d submit to an Ethics review, too. But it’s unclear when a review by the notoriously secretive Ethics panel will begin, or when it would end.

The political ramifications of that probe are more acute for Loeffler than for Burr. The third-term North Carolina senator said his term, which expires in 2022, will be his last. Loeffler, who is expected to use a chunk of her estimated $500 million fortune to win the November special election for the seat she was appointed to on Jan. 6, has been constantly pummeled from both her right and her left over the trading news.

“People are losing their jobs, their businesses, their retirements, and even their lives and Kelly Loeffler is profiting off their pain?” asked Loeffler’s primary opponent, Rep. Doug Collins (R-GA), on Twitter. “I'm sickened just thinking about it.” A Collins ally, the GOP Speaker of Georgia’s House, openly fretted on Friday about broader fallout, telling the Atlanta Journal Constitution that “a lot of people are going to associate these activities with some very fine candidates running for the Georgia House and are going to hold that against us.”

Read more at The Daily Beast.

Get our top stories in your inbox every day. Sign up now!

Daily Beast Membership: Beast Inside goes deeper on the stories that matter to you. Learn more.