A group of senators became embroiled in controversy over their sale of stocks after it was reported they made the maneuvers right before the stock market plunged while the country and the rest of the world grappled with the coronavirus crisis.
The lawmakers, who come from both the Republican Party and Democratic Party, are facing allegations of insider trading, spurred by reports, some of which appear to be unfounded, that some of them were receiving secret congressional briefings on the COVID-19 virus outbreak around the time they sold major holdings.
It all started with an NPR report Thursday featuring a recording of Senate Intelligence Committee Chairman Richard Burr during a luncheon, where the Republican warned about the growing threat. ProPublica then published a report about Burr’s February stock dumps, implying the sales flowed from daily intelligence community briefings he had been receiving about the COVID-19 virus.
Another senator, Georgia Republican Kelly Loeffler, got roped into the controversy when the Daily Beast published a report about her financial disclosures showing large stock sales, hinting these sales happened due to information gleaned from a Health Committee briefing the same day last month.
Ensuing reports of seemingly suspiciously timed sell-offs ensnared Democratic Sen. Dianne Feinstein of California and Republicans such as Sen. Jim Inhofe of Oklahoma, Sen. David Perdue of Georgia, and Sen. Ron Johnson of Wisconsin, leading to concerns about improper stock trading. The Democratic Senatorial Campaign Committee even launched attacks based on some claims against GOP lawmakers.
All the senators have denied wrongdoing, and President Trump said during a coronavirus briefing at the White House on Friday, “I find the whole group very honorable people.”
Richard Burr
The crux of the NPR story was that Burr downplayed the coronavirus threat in public while warning people at a Tar Heel Circle luncheon about COVID-19’s potential impact.
“It is probably more akin to the 1918 pandemic,” Burr said at the Feb. 27 luncheon.
NPR reported, “Burr did not warn the public of the government actions he thought might become necessary, as he did at the luncheon.”
But Burr spokeswoman Caitlin Carroll said, “Since early February … he has worked to educate the public about the tools and resources our government has to confront the spread of coronavirus” and that he “has urged public officials to fully utilize every tool at their disposal.”
Burr called the NPR story a “tabloid-style hit piece” and said luncheon attendees “also included many non-members, bipartisan congressional staff, and representatives from the governor’s office.” He said that back on Feb. 26, Trump and health officials urged the country “to begin making plans for potential closures, social distancing, and telework.”
The ProPublica piece on his financial activity said that “soon after he offered public assurances that the government was ready to battle the coronavirus,” Burr “sold off a significant percentage of his stocks, unloading between $628,000 and $1.72 million of his holdings on Feb. 13 in 33 separate transactions.”
Burr said Friday that he “relied solely on public news reports to guide my decision regarding the sale of stocks” and “closely followed CNBC’s daily health and science reporting out of its Asia bureaus.” He asked the Senate Ethics Committee to look into it.
Kelly Loeffler
The Daily Beast story tied a private all-senators Senate Health Committee coronavirus briefing on Jan. 24 to stock sales noted in Loeffler’s financial disclosures, noting that between Jan. 24 and Feb. 14, “Loeffler reported selling stock jointly owned with her husband worth between $1,275,000 and $3,100,000.” It also noted that on Feb. 14, her disclosures show $100,000 to $250,000 in stock purchases for Citrix, a company that does telework.
Loeffler called this “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,” Loeffler said. “I was informed of these purchases and sales on February 16, 2020 — three weeks after they were made.”
Loeffler’s Senate primary rival, Rep. Doug Collins, wasted no time attacking her, tweeting that he was “sickened” by Loeffler “profiting” off of pain.
Loeffler told Fox News the idea that she sold stocks based on congressional briefings “could not be true” because “I’m not involved in the decisions around buying and selling.”
“I have adhered to the letter and the spirit of these ethics rules,” Loeffler said.
Loeffler’s husband, Jeffrey Sprecher, is the chairman of the New York Stock Exchange, and she said they put rules in place so neither one could do discretionary trades.
Numerous reports say Loeffler is worth an estimated $500 million, and the Wall Street Journal reported her husband’s 1.1% stake in the Intercontinental Exchange alone was worth almost $600 million.
The senator said she would “absolutely” be open to answering questions from the Securities and Exchange Commission or the Senate Ethics Committee.
Dianne Feinstein
Financial disclosure forms for Feinstein show two sales on Jan. 31 of $500,001 to $1 million, then another sale of $1-5 million in stock for Allogene Therapeutics, a cancer research biotech company.
Feinstein told the Washington Examiner that “during my Senate career, I’ve held all assets in a blind trust of which I have no control” and “reports that I sold any assets are incorrect, as are reports that I was at a Jan. 24 briefing on coronavirus, which I was unable to attend.”
“Under Senate rules, I report my husband’s financial transactions,” Feinstein said. “I have no input into his decisions. My husband in January and February sold shares of a cancer therapy company. This company is unrelated to any work on the coronavirus, and the sale was unrelated to the situation.”
James Inhofe
Financial disclosures for Inhofe showed sales of stock in PayPal, Intuit, Apple, and others totaling $180,000 to $400,000 on Jan. 27, but he also sold between $150,000 to $350,000 in January before the Senate Health briefing.
Inhofe called allegations of wrongdoing “completely baseless and 100 percent false.”
“I was not at the briefing on Jan. 24,” Inhofe said. “I do not have any involvement in my investment decisions. In December 2018, shortly after becoming chairman of the Senate Armed Services Committee, I instructed my financial advisor to move me out of all stocks and into mutual funds to avoid any appearance of controversy.”
David Perdue
Financial disclosures for Perdue show 25 transactions buying and selling stock throughout January and 82 transactions buying and selling stock in late February.
Perdue spokeswoman Casey Black said the senator “has always had an outside advisor managing his investments, and he goes above and beyond to fully comply with the law.” She continued that “the senator is not involved in any day-to-day investment decisions.”
A review of the transactions shows that Perdue’s outside adviser bought and sold roughly equal amounts of stock, and some have taken a big hit during the downturn.
Ron Johnson
Left-leaning outlets such as Raw Story, along with left-leaning reporters, pundits, and various Twitter users, attempted to rope Johnson into the controversy too, although a number backed away as more details came to light.
Johnson’s financial disclosures showed the sale of his stake in Pacur, LLC (a company he’d previously run) to Gryphon Investors for $5 million to $25 million earlier in March. Johnson’s office told the Milwaukee Journal Sentinel the deal had been in the works since 2018 and had nothing to do with the coronavirus.
“This transaction is the result of an investment by a private firm in Pacur, and Gryphon was excited enough about it that they sent out a press release,” Johnson’s spokesperson said. “Any attempts to make this seem like anything else are just sad partisan smear tactics and proactive spreading of misinformation.”
