As the scope and seismic economic impact of the coronavirus global pandemic was still not entirely clear to most Americans, several US senators were unloading large amounts of stock — moves that came before the massive drop in the stock market that has cost Americans trillions in wealth.
Two Republican senators may have saved themselves millions.
In mid-February, North Carolina Sen. Richard Burr and his wife sold as much as $1.7 million in stocks, roughly two weeks before the Senate Intelligence Committee Chairman delivered a private briefing on Capitol Hill in which he warned that the coronavirus — and its potential reverberations societally — were far larger than were presently being reported by the media. Burr is not among the wealthiest members of Congress, and the stock sales represented somewhere between 25% and 75% of his entire stock portfolio, according to the Center for Responsive Politics, which based this figure on his 2018 filing.
Burr, as chairman of the Intelligence Committee, receives periodic briefings about the threats facing the country although he did not receive briefings during the week that he and his wife sold the stock, according to reporting by CNN’s Jeremy Herb.
On Friday morning, Burr tweeted this by way of explanation:
“I relied solely on public news reports to guide my decision regarding the sale of stocks on February 13. 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.”
Then there is Georgia Sen. Kelly Loeffler. From January 24 through mid-February, Loeffler, the newest member of the Senate, and her husband who happens to be chairman of the New York Stock Exchange, made a total of 27 sales. On the day of the first transaction, Loeffler participated in an all-senators briefing on coronavirus with a number of Trump administration officials.
In a tweet Thursday night, Loeffler claimed that neither she nor her husband were aware of the stock moves until February 16, three weeks after they began. She wrote:
“I want to set the record straight: This is a ridiculous & baseless attack. 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.”
Now, to be very clear here: There is no clear evidence that either Burr or Loeffler used insider information to make decisions about their portfolio or committed any sort of crime. Burr has asked the Senate Ethics Committee to review his sales, Loeffler wouldn’t comment Friday when asked if she would do the same thing.
But what is clear is that these moves — whether or not the senators had direct oversight and approval of them or not — look incredibly bad in the context of the global pandemic.
Other sales were reported last month by Sen. Dianne Feinstein, a California Democrat.
Feinstein herself did not sell any stock, as it was her husband who sold between $1.5 million and $6 million in stock of Allogene Therapeutics, a biotech company, in January and February. Feinstein spokesman Tom Mentzer said Feinstein has no involvement in her husband’s financial decisions.
“All of Senator Feinstein’s assets are in a blind trust, as they have been since she came to the Senate,” Mentzer said.
Large numbers of Americans have lost huge amounts of money during the past month as the market has plunged roughly 30% on fears of what coronavirus will do to the global economy. The idea that two senators, who were regularly being briefed with information not available to the general public on the threat posed by the virus, were able to avoid such losses, simply smells wrong.
Especially when you consider that Burr co-authored an op-ed the week before he began his stock sell-off reassuring the public that the “United States today is better prepared than ever before to face emerging public health threats, like the coronavirus, in large part due to the work of the Senate Health Committee, Congress, and the Trump Administration.”
And that Loeffler sent out this tweet on February 28, 12 days after the day she said she was aware of the stock sales:
“Democrats have dangerously and intentionally misled the American people on #Coronavirus readiness.
“Here’s the truth: @realDonaldTrump & his administration are doing a great job working to keep Americans healthy & safe.”
The revelations about the stock sales — and the timing of them — has already led to widespread condemnation of the two senators including by some people within their party.
On Thursday night, conservative Fox News anchor Tucker Carlson called on Burr to explain his transaction more fully or resign. “Now maybe there’s an honest explanation for what he did. If there is, then he should share it with the rest of us immediately,” Carlson said. “Otherwise, he must resign from the Senate and face prosecution for insider trading.”
Now, again — there’s no evidence that anything illegal happened here — but the optics of these moves, as regular Americans watch their own financial situations grow more dire, are NOT good.
Georgia Rep. Doug Collins, who is challenging Loeffler in a primary later this year, tweeted this Friday morning: “People are losing their jobs, their businesses, their retirements, and even their lives and Kelly Loeffler is profiting off their pain? I’m sickened just thinking about it.”
The key thing to understand here is this: Politics is not a court of law. Whether or not Burr and Loeffler committed any actual crime — and, again, there’s no current evidence they did — is in some ways beside the point. In the court of public opinion, two senators (or their designees) selling off stock on the eve of a historic market drop looks really, really bad.
Burr’s argument that he simply is a savvy stock market watcher or Loeffler’s that she was unaware of until it was too late are unlikely to be enough to satisfy those who look at what happened and see the DC swamp they hate so much in action.
This story isn’t going anywhere. And Burr and Loeffler need to understand how this all looks to the average person if they want to get through it.