Stock transactions Sen. Richard Burr made after private congressional briefings and before the coronavirus pandemic sent the markets plummeting are being examined by the Department of Justice as part of a broader probe into additional lawmakers.
The inquiry, first reported by CNN, is being conducted in concert with the Securities and Exchange Commission and the Federal Bureau of Investigation.
Burr, a North Carolina Republican and chairman of the Senate Intelligence Committee, dumped between $628,000 and $1.72 million in his securities holdings on Feb. 13, after the committee began receiving daily coronavirus briefings, ProPublica reported. Prior to that story, NPR obtained a recording in which Burr offered a bleak, private evaluation of the grave economic impact the coronavirus would bring on Feb. 27. That analysis was a contrast from his previous, more upbeat public comments on the matter.
Burr said he used public information to make his trades, but still asked the Senate Ethics Committee to look into his situation after the public outrage that erupted from the appearance of him trading on inside information.
A request for comment to Burr’s congressional office was returned with a statement from Alice Fisher of Latham & Watkins, which is advising Burr:
“The law is clear that any American — including a Senator — may participate in the stock market based on public information, as Senator Burr did,” Fisher said. “When this issue arose, Senator Burr immediately asked the Senate Ethics Committee to conduct a complete review, and he will cooperate with that review as well as any other appropriate inquiry. Senator Burr welcomes a thorough review of the facts in this matter, which will establish that his actions were appropriate.”
Judith Burns, a Securities and Exchange Commission spokesperson, declined comment. The DOJ did not immediately respond to a request for comment.
Burr was one of three senators who voted against the Stop Trading on Congressional Knowledge Act, which became law in 2012. The vote was 96-3, with former Sens. Tom Coburn of Oklahoma and Jeff Bingaman of New Mexico also voting nay. The law prohibits members of Congress from trading on nonpublic information derived from their official duties for personal enrichment. Further, the STOCK Act also requires lawmakers to publicly report their stock trades within 45 days of the execution. These are called periodic transaction reports.
The Senate Ethics Committee is not known for enforcing strict disciplinary measures against its own colleagues. The panel’s most recent formal act of discipline was a public letter of admonition in April of 2018 regarding Sen. Bob Menendez, a New Jersey Democrat, for accepting impermissible gifts. He was ordered to repay fair market value for the gifts and was publicly reprimanded. Before that, the most recent public letter was issued in 2012.
Several other senators dumped stock before the pandemic crushed the financial markets.
Sen. Kelly Loeffler, a Georgia Republican who is married to the chairman of the New York Stock Exchange, Jeffrey Sprecher, also unloaded more than $1 million in stock after a private briefing with top administration health officials on the coronavirus, the Daily Beast reported.
Sen. Dianne Feinstein’s husband sold between $1 million and $5 million in Allogene Therapeutics Inc. on Feb. 18 at $24 a share. It has since dropped to $20 a share. Her husband also sold between $500,000 and $1 million in the stock on Jan. 31, when it was at $21 for a share. Feinstein, a California Democrat, sits on the Intelligence Committee and was previously its chairwoman.
Sen. Ron Johnson sold off millions in securities of Pacur LLC, a Wisconsin-based plastics company he used to run before taking office. On March 2, Johnson, a Wisconsin Republican, sold between $5 million and $25 million in the company.
Sen. James M. Inhofe, who serves as an ex-officio member on the Intelligence Committee, sold between $180,000 and $400,000 of his stock holdings on Jan. 27. That includes between $15,000 and $50,000 in Apple Inc. and PayPal Holdings Inc. each. That transaction report includes sales between $50,000 and $100,000 in Intuit Inc., Danaher Corporation and Brookfield Asset Management. Inhofe, an Oklahoma Republican, also sold between $50,000 and $100,000 in Brookfield Asset Management on Feb. 20, when it was $68 a share. It is now worth $43 a share.
Loefller, Feinstein, Johnson and Inhofe all denied any impropriety.