When Richard Burr, the North Carolina Republican who chairs the Senate Intelligence Committee, and is therefore privy to nearly daily briefings about the possible impact of the deadly coronavirus, dumps as much as $1.7 million in stock before the market crash, well, it seems like more than a coincidence.
So too the sell-off of stock by Senator Kelly Loeffler, Republican of Georgia, and her husband that began on the very day the Senate Health Care Committee on which Loeffler sits heard from a number of administration officials, including the head of the Centers for Disease Control and Prevention and Dr. Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases.
Members of Congress shouldn’t be trading stocks at all, just like they shouldn’t sit on corporate boards. It invariably gives rise to the appearance, if not the reality, of a conflict of interest. It makes no sense, for instance, that federal lawmakers can legally sit on committees and vote to increase defense spending while also buying and selling stock in a company that contracts with the Pentagon.
Burr’s stock sales also point to an even more shocking violation of his public trust. The senator could have told the country what he clearly saw himself: that a storm was coming and we’d better get ready. Instead, he kept quiet while protecting his own finances.
The 2012 STOCK (Stop Trading on Congressional Knowledge) Act, signed into law by President Obama, was supposed to prohibit any member or employee of Congress from using “any nonpublic information derived from the individual’s position . . . or gained from performance of the individual’s duties, for personal benefit.”
Burr’s was one of three Senate votes against the bill.
Today, the early disclosure of those recent stock trades by Burr and Loeffler and several of their colleagues are matters of public record in large part because of provisions of that 2012 law. (Some of the bill’s disclosure provisions, however, were rolled back by Congress and President Obama in 2013.)
In mid-February Burr sold 33 stocks held jointly by him and his wife, estimated at between $628,033 and $1.72 million. Burr has insisted the stock sales were guided only by news reports and has asked the Senate Ethics Committee to investigate.
But in a column Burr coauthored that appeared on the Fox News website on Feb. 7, he wrote, “Thankfully, 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.”
Then, on Feb. 27, he told a private group of local leaders meeting in Washington, “There’s one thing that I can tell you about this: It is much more aggressive in its transmission than anything that we have seen in recent history. It is probably more akin to the 1918 pandemic.”
The remarks were from a secret recording obtained by NPR but not disputed by Burr’s office.
Loeffler, who was appointed to the Senate seat and only took office Jan. 6, is the wife of the chairman and CEO of the New York Stock Exchange.
On the day of the Fauci briefing, she tweeted, “Appreciate today’s briefing from the president’s top health officials on the novel coronavirus outbreak.” Her disclosure form that same day noted the first of 29 stock transactions made jointly with her husband. The sales totaled between $1,275,000 and $3.1 million.
The couple also made a buy of between $100,000 and $250,000 in stock in Citrix, a tech company that offers telecommuting software currently much in demand. After protecting her own financial interests, here’s what Loeffler told the public via tweet: “Democrats have dangerously and intentionally misled the American people on #Coronavirus readiness.”
Loeffler, who has pledged to spend as much as $20 million to keep her Senate seat in the November election, insisted in a statement, “I do not make investment decisions for my portfolio.”
Two other senators, Democrat Dianne Feinstein of California and Republican Jim Inhofe of Oklahoma, have also been caught in untimely stock trades. Feinstein’s office said the transactions were those of her husband and that the senator’s own assets are in a blind trust. Inhofe said he did not attend the Jan. 24 briefing and also does not make his own investment decisions.
Despite the 2012 law, in practice it’s difficult to prosecute lawmakers for insider trading, because of how hard it is to prove whether a given stock trade was made as a result of public or private information. That’s why stronger rules are needed to require serving members of Congress to put their stock holdings into blind trusts.
Ultimately, the implicated senators who are seeking reelection will have to explain themselves to voters. But the whole episode is a reminder of why sitting members of Congress just shouldn’t be playing the stock market in the first place.
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