WASHINGTON - Sen. Richard Burr, R-N.C., sought an ethics review Friday on his recent sale of upward of $1.7 million in stocks as he and other lawmakers faced a bipartisan uproar over whether they had used information gleaned from private congressional briefings to guide transactions before the market plummeted due to the coronavirus outbreak.
The Senate Intelligence Committee chairman, who had publicly expressed confidence in the country's preparedness for the pandemic, sold a significant share of his stocks last month, according to public disclosures. Burr said he relied solely on public news reports for the sales but asked the Senate Ethics Committee for a review.
"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," Burr said in a statement.
The sales included stocks in some of the industries that were later hardest hit during the pandemic, including those in hotels and restaurants, shipping, drug manufacturing and health care, records show. In his statement, Burr said he had relied specifically on "CNBC's daily health and science reporting out of its Asia bureaus."
Until about a week ago, President Donald Trump and GOP leaders had projected optimism in the country's ability to manage the global outbreak of the coronavirus.
Burr's actions prompted widespread criticism, including from some conservative commentators, as well as calls for his resignation from Democrats in his home state, among others. Even some of his GOP colleagues said scrutiny of his stock sales was appropriate.
Sen. Thom Tillis, Burr's Republican colleague from the Tar Heel State, said in a tweet Friday that "given the circumstances, Senator Burr owes North Carolinians an explanation" and that an ethics committee review could provide a "professional and bipartisan inquiry into this matter."
As head of the powerful Intelligence Committee, Burr was receiving frequent briefings and reports on the threat of the virus. He also sits on the Senate Health, Education, Labor and Pensions Committee, which received briefings on the pandemic.
In mid-February, Burr sold 33 stocks held by him and his spouse, estimated at between $628,033 and $1.72 million, Senate financial disclosures show. It was the largest number of stocks he had sold in one day since at least 2016, records show.
Burr, who spent a decade in the House before his election to the Senate in 2004, has said his current term will be his last and that he will not seek reelection when his seat is up in 2022.
The recent stock sales of several other lawmakers have also drawn scrutiny in light of questions about whether they acted on information that was not broadly available at the time.
Citizens for Responsibility and Ethics in Washington, a federal watchdog group, announced Friday that it was filing complaints with the Senate Ethics Committee against both Burr and Sen. Kelly Loeffler, R-Ga., another lawmaker whose recent stocks sales prompted media scrutiny.
In the weeks following a closed Senate briefing, Loeffler sold holdings valued at between $1.28 million and $3.1 million in companies like ExxonMobil and Auto Zone, which have seen their share price fall significantly, while she purchased shares in a company that sells teleworking software. Loeffler also sits on the Senate Health panel.
Common Cause, another advocacy group, announced it was filing complaints with the Justice Department and Securities and Exchange Commission against Burr and Loeffler, as well as against Sens. James Inhofe, R-Okla., and Dianne Feinstein, D-Calif.
During an appearance Friday on CNBC, Loeffler said sales by her and her husband, Jeffrey Sprecher, the chairman of the New York Stock Exchange, were made "at the decision of our investment managers" and she didn't learn of them until well after the fact.
"Certainly I had no involvement," Loeffler said, adding that she would welcome any scrutiny that is appropriate and has always adhered "to the letter and the spirit of the law."
Loeffer pointed to a nonpublic disclosure made to the Senate Ethics Committee, which stated that her financial transactions are "notified to filer on or after" the date they are made. But the disclosure, a copy of which her staff provided to The Washington Post, does not clarify whether she had any role in directing the transactions.
Inhofe said he did not even attend a closed Senate briefing on coronavirus that could have helped inform stock decisions. He said the sale of stocks worth up to $400,000 on Jan. 27 was carried out by a financial manager and part of a long-term plan to cash out holdings.
Feinstein said she was not at the briefing either and that her husband oversees the portfolio.
Sen. David Perdue, R-Ga., and his wife made dozens of stock sales in January and February, selling up to $165,000 in stock of Caesars Entertainment, the casino company, whose value has been badly hit like those of many other leisure companies. He and his wife also made dozens of purchases, including investing up to $260,000 in Pfizer, the pharmaceuticals corporation, in late February.
Perdue told reporters that he would be "very happy for somebody to take a look at" his transactions.
Federal officials are barred by law from using the nonpublic information they learn in their positions for their private financial gain.
Experts said that given the global fears at the time of these stock sales and purchases, it is not uncommon for people to be making significant decisions on selling or purchasing stocks.
But the question at hand is whether specific information provided to these senators during private briefings informed which industries would fare better or worse as a result of the disease's spread to the United States, said Matthew Nielsen, white-collar defense partner and expert at laws governing insider trading, at the law firm Bracewell LLP.
For example, Burr sold stocks in the hospitality industry and Loeffler purchased stocks in Citrix, which provides remote working technology.
"This comes down to . . . whether there was specific, classified information that would have been something unavailable to the public, that led someone to conclude that there was going to be significantly more impact" on that industry, Nielsen said.
Insider trading prohibitions apply to all members of Congress, congressional staff and other federal officials, under the Stop Trading on Congressional Knowledge (Stock) Act of 2012. Burr was among three senators who voted against the legislation at the time.
Pandemic preparation has been focus for Burr for well over a decade. In 2006, Burr co-authored - along with the late senator Ted Kennedy, D-Mass. - the first Pandemic and All-Hazards Preparedness Act, which has been periodically reauthorized, most recently in June 2019, after it lapsed in late 2018.
Burr trumpeted many of the provisions of it in a Feb. 7 Fox News op-ed that he co-wrote with Sen. Lamar Alexander, R-Tenn., chairman of the Health, Education, Labor and Pensions Committee, striking a tone of calm as he stressed that Congress had already given the administration the tools it needed to combat the virus.
But that editorial has been criticized for not sounding an urgent alarm about the crisis, given the briefings that Burr was receiving.
Burr has argued that he based his decision on publicly available information. People familiar with Burr's expertise have said that if anyone in the Senate would have recognized the potential of the pandemic to spin out of hand, it would have been him - though some also cautioned that the information available to both congressional officials and the public was changing on a day-to-day basis throughout the month.
Burr's fascination with pandemic readiness sits at the nexus of two panels on which he has long served: the Health and Intelligence committees. He has frequently spoken out during global public health crises to remind that administrations have congressionally authorized tools at their disposal to combat pandemics, most recently in 2016, in response to an outbreak of Ebola.
The initial reports and updates the Intelligence Committee received were mostly focused on how coronavirus was playing out in other countries like China and Iran, and whether those governments were reporting their statistics accurately - not on predicting the potential of the coronavirus threat to metastasize in the United States.
It is not entirely clear how frequently the members of the Health committee - on which Burr and Loeffler both sit - were receiving in-person briefings.
But the panel did receive several updates on the situation between Jan. 24, when Loeffler tweeted about the coronavirus briefing she had attended, and March 3, when the panel interviewed National Institute of Allergy and Infectious Diseases director Anthony Fauci and Centers for Disease Control deputy director Anne Schuchat in an open hearing about the threat.
In the hearing, Burr warned against "micromanaging" the administration, or passing legislation that would simply double on what was already authorized in the pandemic response law he authored. But he did not sound happy with the administration's execution of the coronavirus response.
That hearing was five days after Burr delivered dire comments about the impact of the coronavirus outbreak to a North Carolina State Society gathering on Capitol Hill that were first highlighted by NPR, and about three weeks after the stock trades in question.
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The Washington Post's Mike DeBonis and Paul Kane contributed to this report.
This article was written by Erica Werner, Jeff Stein, Paul Kane and Mike DeBonis, reporters for The Washington Post.
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