Coronavirus: US senators dumped millions in stocks as outbreak loomed

Under-fire lawmakers include head of intelligence committee

Andrew Naughtie
Friday 20 March 2020 10:33 GMT
Fox News host calls for senator's resignation

Several US senators are under fire for dumping millions of dollars in stock holdings just before coronavirus tanked the markets – and after they were briefed on the likely impact of the epidemic.

North Carolina’s Richard Burr, head of the Senate’s Intelligence Committee, and Georgia’s Kelly Loeffler, both Republicans, sold off shares after a closed-door briefing on the epidemic on January 24, well before it became publicly clear how badly coronavirus set to affect the US.

As reported by Open Secrets, Mr Burr unloaded thousands of dollars of stocks along with his wife in mid-February, many of them in companies likely to lose value, including hotel chains.

Mr Burr, who has represented North Carolina in the Senate since 2005, has long been a leader on legislation designed to help the government prepare for pandemics, specifically the Pandemic and All-Hazards Preparedness Act, first enacted in 2006 and then re-authorised in 2019.

This legislative experience makes him one of the Senate’s go-to authorities on the implications of a fast-spreading and lethal pathogen.

At around the same time, he had publicly reassured Americans that the US was “better prepared than ever before” to stop an advancing epidemic from sweeping the country.

However, a recording obtained by NPR reveals that,at a private lunch on February 27, Mr Burr warned members of an elite North Carolina social club that the impact of the virus would be far more dire. Mr Burr called NPR’s report “a tabloid-style hit piece”, saying “the message I shared with my constituents is the one public health officials urged all of us to heed as coronavirus spread increased”.

Mr Burr has also previously voted against insider trading legislation that prohibits members of Congress from using not-yet-public information to inform their stock trading. He was one of only three senators to vote against the 2012 act, dismissing the time spent on it as “ludicrous”.

A spokesperson for Mr Burr told OpenSecrets that “Senator Burr filed a financial disclosure form for personal transactions made several weeks before the U.S. and financial markets showed signs of volatility due to the growing coronavirus outbreak.”

Calls for Mr Burr’s resignation have come from all across the political spectrum, including Fox News, whose Tucker Carlson said “There is no greater moral crime than betraying your country in a time crisis and that appears to be what happened.”

Senator Loeffler, meanwhile, sold off multiple shares in various companies while buying shares in another that produces teleworking software. According to records filed with Senate ethics officials, the sold-off stocks came to a value of between $1.275m and $3.1m.

In a statement, senator Loeffler denied she had a personal role in the transactions or that they were made based on information she received at the closed-door hearings.

“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.

“As confirmed in the periodic transaction report to Senate Ethics, I was informed of these purchases and sales on February 16, 2020 – three weeks after they were made.”

Ms Loeffler is both the youngest member of the Senate and one of its wealthiest, as well as its most recent arrival, having been nominated by her state’s governor at the end of 2019 to fill the seat vacated by Johnny Isakson.

Other Republican senators found for the timing of their stock transactions include Oklahoma’s Jim Inhofe and Wisconsin’s Ron Johnson, both of whom have reported large transactions in their favour in the weeks after the briefing.

On the Democratic side, California’s Dianne Feinstein sold millions of dollars of shares in two transactions after the briefing. Ms Feinstein’s spokesperson told the New York Times that she and her husband kept their stock in a blind trust, meaning they had no role in their multi-million dollar sales.

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