The Justice Department is now looking into claims that North Carolina Senator Richard Burr sold stocks before the market dropped last month.
CNN is reporting the FBI reached out to Burr about his trades. Earlier this month, Channel 9 reported financial records showed he sold 33 stocks on Feb. 13.
The stocks were estimated between $628,000 and $1.72 million.
Burr and other senators from both political parties faced public outage when they denied that they exploited advance knowledge when they dumped stocks and other financial holdings before the coronavirus wreaked havoc on the economy.
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There have even been calls for Burr to resign.
Senate Intelligence Committee Chairman Burr, R-N.C., whose sales of as much as $1.7 million in stocks have come under the most scrutiny, requested an ethics review of his actions in the days before markets dropped in February. But Burr and all the other senators pushed back strongly against suggestions that they used sensitive government information to protect their financial well-being.
“It appears that in a time of crisis, these senators chose instead to serve themselves, violating the public trust and abdicating their duty,” said Noah Bookbinder, the director the group Citizens for Responsibility and Ethics in Washington, which filed a Senate ethics complaint against Burr and Republican Sen. Kelly Loeffler of Georgia. "They must be immediately investigated.”
There are really two parts to this controversy, both involving what he knew ahead of the coronavirus outbreak.
First, Burr, himself, is acknowledging he sold up to $1.7 million of his own stocks, right before the market crash.
Second, there’s an audio recording where he warns a small group of people about the dire effects of coronavirus well before the government let on about how severe it could be.
Channel 9 government reporter Joe Bruno has been investigating this story since Thursday.
Burr, who is the chair of the Senate Intelligence Committee, has been receiving regular briefings and intelligence reports about the coronavirus that the public didn’t have access to.
The sale was days after the senator wrote an op-ed for Fox News saying the U.S. is better prepared than ever for COVID-19
Meredith McGehee, who is the executive director of the watchdog group, Issue One, is an expert on Congress and ethics.
She said Burr’s stock dump is troubling, because he was receiving high-level information on coronavirus that the public wasn’t aware of.
“The thing in this case that is particularly troubling is that this was done from intelligence briefings, and at a time of the national crisis,” McGehee said.
Channel 9 obtained a financial disclosure form for Burr and it shows the sale of 33 stocks on Feb. 13 with a value estimated at between $628,000 and $1.72 million.
The sales include industries hit hard because of the coronavirus, including up to $150,000 in shares for Extended Stay America and up to $150,000 in share for Wyndham Hotels.
Burr is defending himself, releasing a statement saying: "I relied solely on public news reports to guide my decision regarding the sale of stocks on Feb. 13. Specifically, I closely followed CNBC’s daily health and science reporting out of its Asia bureaus at the time."
In this letter to the Senate Ethics Committee, Burr asks for an expedited investigation.
Catawba College political expert Michael Bitzer said that may be challenging given the COVID-19 pandemic.
“That causes a whole new dynamic that I don't think anybody can truly anticipate what might happen going forward,” Bitzer said.
He said when the investigation does happen, Burr may have a hard time explaining those stock sales
“I think it is going to be very difficult for the senator to make a differentiation for what he learned as the Senate Intelligence Committee chair and what everybody else knew in public,” Bitzer said.
Criticism of the sale is coming from both parties, including Sen. Thom Tillis, who is also a Republican.
He said Burr owes North Carolinians an explanation.
Burr was not the only lawmaker to sell off stocks before the market slide. Loeffler, a new senator up for reelection this year, sold hundreds of thousands of dollars worth of stock in late January and February, as senators began to get briefings on the virus, according to records. So did fellow Georgia Sen. David Perdue, another Republican lawmaker running for reelection, and also Republican Sen. James Inhofe of Oklahoma and Democratic Sen. Dianne Feinstein of California.
Federal financial disclosures show that Georgia Sen. Kelly Loeffler sold $1.2 million worth of stocks after a Senate Health Committee meeting.
Jim Inhofe of Oklahoma sold a total of $230,000 worth of stocks after Burr's sell-off.
Feinstein reported that her husband sold off between $1.5 million and $6 million worth of stock in Allogene Therapeutics more than a month ago. The San Francisco-based biotech company researches and develops cures for cancer.
Feinstein, who also sits on the intelligence panel, said in a statement that she didn’t attend the Jan. 24 briefing and had no input in her husband’s decisions.
“This company is unrelated to any work on the coronavirus and the sale was unrelated to the situation,” she said.
In a statement Friday, Burr said he had asked for the Senate Ethics Committee to investigate, “understanding the assumption many could make in hindsight.” He acknowledged selling the stocks because of the virus.
Burr said he relied “solely on public news reports,” specifically CNBC's daily health and science reporting out of Asia, to make the financial decisions.
There is no indication that Burr, who does not plan to run for reelection in 2022, was acting on inside information. The intelligence panel he leads did not have any briefings on the pandemic the week when most of the stocks were sold, according to a person familiar with the matter. The person declined to be identified to discuss confidential committee activity.
Burr’s North Carolina colleague, Republican Sen. Thom Tillis, tweeted that the ethics review of the stock sales was appropriate. Asked in the Capitol about Burr’s sales, Senate Majority Leader Mitch McConnell did not respond.
The Associated Press contributed to this report.
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