They could have made a difference, but they made a profit.
On Jan. 24, Richard Burr, a Republican senator from North Carolina, attended a private Senate briefing from senior government scientists about the seriousness of the coronavirus. Kelly Loeffler, a Republican senator from Georgia, received the same briefing.
At the time, many Americans did not yet understand the danger that the virus posed. The same day as the briefing, President Trump — in one of his many attempts over the past two months to make the virus seem like a frivolous matter — tweeted, “It will all work out well.”
Given the disconnect between what they knew and the public’s understanding, Burr and Loeffler had an opportunity to sound the alarm. They could have broken ranks with other congressional Republicans and told the country to take the situation more seriously. They could have criticized Trump for not doing more. Such criticism, coming from Trump’s own party, would have received major attention. It would have had the potential to alter Trump administration policy and, by extension, the course the disease took.
But Burr and Loeffler did virtually nothing to protect the health and safety of their constituents or of Americans in other states. (Burr went so far as to co-write an article for FoxNews.com bragging about the country’s readiness.) Here’s what the two senators did instead: They sold large amounts of their personal stock holdings, cashing in before the market sharply declined, as the severity of the virus became apparent to everyone.
The Daily Beast broke the story of Loeffler’s trades, which added up to between $1.2 million and $3.1 million. She started selling the shares the same day as the briefing. She also bought “between $100,000 and $250,000 in Citrix, a technology company that offers teleworking software” and whose share price has risen since the crisis began, The Daily Beast’s Lachlan Markay, William Bredderman and Sam Brodey write.
The Center for Responsive Politics and ProPublica broke the news of Burr’s trades, which amounted to between $600,000 and $1.8 million. Among the shares that he and his wife sold were those in three hotel companies, all of which have since seen their stock prices hammered, Karl Evers-Hillstrom wrote.
Loeffler was appointed to her senate seat last year by Georgia’s governor, and is running for election this November. Burr is currently in his third term and has said he would not run again.
Their sales are “an immense and outrageous abuse of the public trust,” writes Lawfare’s Susan Hennessey. “It’s an inexcusably terrible thing to have done,” she adds.
Update:Several readers have asked about the other senators who sold stock during the same period, including Dianne Feinstein (a California Democrat), James Inhofe (an Oklahoma Republican) and Ron Johnson (a Wisconsin Republican). But none of their trades look particularly suspicious.
Feinstein has said that she did not attend the Jan. 24 briefing; her stock was in a blind trust, which means she didn’t make the decision to sell; and the transaction lost her money, because the trust was selling shares of a biotechnology stock, the value of which has since risen. Inhofe’s transactions were part of a systematic selling of stocks that he started after he became chairman of the Armed Services Committee. Johnson sold stock in his family’s plastic business, as part of a process that has been occurring for months; his sale also occurred well after stock market began falling.
Jeff Blehar of National Review has a helpful summary on Twitter, in which he argues Burr’s transactions are the worst. Loeffler, who is extremely wealthy and married to the chairman of the New York Stock Exchange, frequently sells stock and has said “multiple third-party advisors” — not her or her husband — made the decision to sell shares in January and in February. The notion that Feinstein or Johnson did something unethical, Belhar wrote, is “flat wrong.” Don Moynihan of Georgetown University agrees.
Burr’s response on Friday morning was not strong. He said that he relied on only “public news reports” about the crisis, like CNBC’s reporting from Asia, a claim that’s impossible to verify. He also said he had asked the Senate Ethics Committee to open “a complete review.”
For more …
Tucker Carlson, Fox News:
[Burr] had inside information about what could happen to our country, which is now happening, but he didn’t warn the public. He didn’t give a prime-time address. He didn’t go on television to sound the alarm. He didn’t even disavow an op-ed he’d written just 10 days before claiming America was ‘better prepared than ever’ for coronavirus. He didn’t do any of those things. Instead, what did he do? He dumped his shares in hotel stocks so he wouldn’t lose money, and then he stayed silent. Now maybe there’s an honest explanation for what he did. If there is, he should share it with the rest of us immediately. Otherwise, he must resign from the Senate …
Molly Knight: “Richard Burr should not hold government office by Monday. He needs to resign today.”
David French, The Dispatch: “The potential insider trading is dreadful and possibly criminal, but what could elevate this to a historic scandal is the idea that senators may have known enough to be alarmed for themselves yet still projected rosy scenarios to the public AND failed to make sure we were ready.”
David Frum of The Atlantic wants to know who else may have sold stock: “What did the Trump family sell, and when did they sell it?”
The Times editorial board argued in December that “members of Congress should not be allowed to buy and sell stocks, or to serve on corporate boards.”
In 2012, Robert Reich notes, Burr was one of only a small number of members to vote against a law that barred them for trading on inside information.