The Chairman of the Senate Intelligence Committee, Senator Richard Burr, sold off between $628,000 and $1.72 million of his stock holdings on February 13 in 33 separate transactions. At the time, Burr had received the government’s most highly classified Wuhan virus briefings. About a week after Burr unloaded stocks that figured to be affected, the stock market began its dive and has lost about 30% of its value since
Today NPR revealed a secret recording from February 27 in which the Senator gave a GOP group at an exclusive social club a gloomy preview of the economic impact of the approaching pandemic. According to the NPR report, Burr told attendees of a business executives group luncheon held at the Capitol Hill Club:
“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.”
Yet in an op-ed that he co-authored with another Senator earlier in the month, he said that “the United States today is better prepared than ever before to face emerging public health threats, like the coronavirus….No matter the outbreak or threat, Congress and the federal government have been vigilant in identifying gaps in its readiness efforts and improving its response capabilities.” That was his last public statement on the matter before he dumped his stocks.
The sell-off was no coincidence. Burr’s biggest sales included holdings in companies among the most vulnerable to a pandemic situation, including about $150,000 worth of shares in Wyndham Hotels and Resorts, a company that has now lost two-thirds of its value. He sold up to $100,000 of shares of Extended Stay America, an economy hospitality chain whose value has been halved by the Wuhan virus.
Well, maybe, if the public indignation over this unusually egregious and blatant example of Congressional conduct that is anything but unusual, Senators and Representatives will have to finally do something meaningful to prevent it.
I wrote about Congressional insider trading just last December, and the conclusion hasn’t changed, nor have there been significantly tightened reins (or enforcement) on the kind of desperate self-help Burr engaged in. It is the epitome of, at very least, the appearance of impropriety, which is supposed to be an ethics violation for any member of Congress:
Nothing but ethics alarms stops members of Congress from voting for or against measures based on their financial interests rather than the public interest. There are still loopholes that make insider trading impossible to prove and very profitable. …
[A New York Times] editorial concludes, “The most comprehensive solution would be to require people who are elected to Congress to divest holdings in public companies within a reasonable period following their election. But such a requirement could impose significant costs on people entering public service. It would be nearly as effective, and less burdensome, to bar members from buying or selling shares.”
…Members of the Senate and Houses are both permitted to hold stock in companies that they may help by passing legislation. Incredibly, they don’t even have to recuse themselves from a vote or other action that might affect their own holdings. This is unethical (and ridiculous) of course, and essentially an institutionally-sanctioned conflict of interest that proves Congress isn’t serious about limiting the ability of elected officials to illicitly profit from their elected post.
A pending bill was introduced [in 2019] that would require members to either put their holdings in blind trusts [or] to refrain from any trading until they leave Congress.
Senator Burr did not support that legislation.