At least four senators are under fire for selling significant amounts of stock weeks before the coronavirus pandemic sent the market into freefall.
Senators are facing backlash for selling in some cases millions of dollars in personal stocks shortly before the coronavirus pandemic sent markets into a freefall earlier this month.
Based on publicly available financial transaction disclosures, Sen. Richard Burr, R-N.C., Sen. Jim Inhofe, R-Okla., Sen. Kelly Loeffler, R-Ga., and Sen. Dianne Feinstein, D-Calif., all appear to have sold stock earlier this year. The question is whether the senators were aware, based on briefings, that the coronavirus scare was evolving into a worse situation than the public was aware.
The financial disclosures indicate that they, or their spouses, sold large chunks of stock around the time senators were receiving behind-the-scenes briefings about the severity of the virus, which in a period of weeks has infected more than 10,000 people and killed more than 200 in the United States while devastating the economy.
Here’s what we know about the senators who sold their stocks, and how they explained their actions:
Sen. Richard Burr
In numbers first reported by ProPublica, Burr and his wife sold anywhere between about $598,000 and $1.62 million in stocks in February, according to his financial disclosures. Lawmakers are not required to disclose exact transaction values, and instead, report ranges for the transaction whenever it exceeds $1,000.
On February 13, Burr sold anywhere between $50,001 and $100,000 worth of stock in firms like Complete Extended Stay and Wyndham Hotels that have been pummeled by the coronavirus.
The day before, senators were given a closed-door briefing by Trump administration officials about the potential extended cost and risks to public health posed by the coronavirus.
Burr said in a statement released Friday morning he had made his sales of stocks on February 13 based on “public news reports” including CNBC.
Burr asks for a Senate Ethics Committee review
Burr on Friday also requested a review by the Senate Ethics Committee Chairman, Sen. James Lankford, R-Okla., of his stock sales.
“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,” Burr said.
The guidance from the Senate Ethics Committee on trading cites the STOCK Act of 2012, which lays out an explicit prohibition on insider trading. Lawmakers and their staff “are not exempt from the insider trading prohibitions arising under the securities laws.
It also says every lawmaker and staff member “owes a duty” to their “relationship of trust and confidence” to the government and the American people “with respect to material, nonpublic information.”
Burr’s fellow North Carolinian Sen. Thom Tillis, a Republican, lauded the move in a tweet but said Burr “owes North Carolinians an explanation.”
Given the circumstances, Senator Burr owes North Carolinians an explanation. His self-referral to the Ethics Committee for their review is appropriate, there needs to be a professional and bipartisan inquiry into this matter, which the Ethics Committee can provide. (1/2)
— Senator Thom Tillis (@SenThomTillis) March 20, 2020
Sen. Kelly Loeffler
In sales first reported by the Daily Beast, Loeffler and her husband sold anywhere between $1 million and $2.49 million in stock in February, as coronavirus briefings ramped up for members of Congress, according to her financial disclosures.
On Feb. 14, she sold between $250,001 and $500,000 worth of stock in Exxon Mobil from an account owned jointly with her husband. The value of Exxon stock has also been affected by the virus and has seen its value at least halved since the beginning of the year.
Loeffler, one of the wealthiest members of Congress, with an estimated net worth of over $500 million, is also married to Jeffrey Sprecher, the chair of the New York Stock Exchange.
Loeffler responded to the accusations of insider trading by calling them a “ridiculous and baseless attack” and saying the investment decisions were made by third-party advisers.
This is a ridiculous and baseless attack. I do not make investment decisions for my portfolio. Investment decisions are made by multiple third-party advisors without my or my husband’s knowledge or involvement.
— Senator Kelly Loeffler (@SenatorLoeffler) March 20, 2020
In a Friday interview with CNBC, Loeffler said she would submit to “whatever review is needed.”
“I’m happy to answer any and all questions and would submit to whatever review is needed,” she said. “We have to make sure that all the rules and laws are followed. I think they are being followed. At least in my case, I know they are.”
Sen. Jim Inhofe
On Feb. 20, Inhofe’s disclosure says he sold between $50,001 and $100,000 in stock in asset management company Brookfield Asset Management that has seen its stock value fall by close to a third since the beginning of the year.
“I do not have any involvement in my investment decisions,” Inhofe said in a statement, noting his financial adviser had been instructed in December 2018 to move his holdings out of stocks and into mutual funds to “avoid any appearance of controversy.”
Sen. Dianne Feinstein
Feinstein’s disclosure shows her selling between $1,000,001 and $5,000,000 of stock in Allogene Therapeutics on February 18, 2020.
The biopharmaceutical company’s stock is down more than 20% since the beginning of the year.
Feinstein spokesman Tom Mentzer told Fox News Feinstein’s assets are in a blind trust and, “She has no involvement in her husband’s financial decisions.”
Senators face backlash, some calls to resign
Following the reporting on the senators’ stock trades, the senators faced a backlash and some calls to resign.
North Carolina Democratic Party Chairman Wayne Goodwin said, “Senator Burr has betrayed the trust of every North Carolinian in a time of crisis and should resign immediately.”
Kyle Herrig, the president of progressive group Accountable.us, said “Senator Burr and any other member of Congress who profited off of advance knowledge of the crisis while they told the public not to worry should immediately resign in disgrace and face the full consequences of the law.”
The crticism did not just come from the left.
Fox News host Tucker Carlson slammed Sen. Burr and said he should resign if there was no “honest explanation for what he did.”
“Maybe there’s an honest explanation for what he did. If there is, he should share it with the rest of us immediately,” Carlson said on his show Thursday evening. “Otherwise, he must resign from the Senate and face prosecution for insider trading. There is no greater moral crime than betraying your country in a time of crisis, and that appears to be what happened.”
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