Patterico's Pontifications

5/14/2020

Sen. Richard Burr To Step Aside As Chairman of Intelligence Committee While Stock Sales Investigated

Filed under: General — Dana @ 2:19 pm



[guest post by Dana]

As part of an inquiry into the coincidental timing of North Carolina’s Sen. Burr unloading stocks a week ahead of the market’s downward slide because of the pandemic, the FBI served his lawyer a with a search warrant, resulting in Burr handing over his cell phone:

Federal law enforcement has seized Republican North Carolina Sen. Richard Burr’s cellphone in a probe of his stock sales…Burr, the head of the Senate Intelligence Committee, has already complied with an associated warrant for his cellphone records as the Justice Department investigates whether his actions constitute insider trading. The senator, along with his brother-in-law, dumped millions of dollars in stock after a closed-door Senate briefing on the coronavirus in February. Though he told the public the virus would not cause much harm, privately he warned audiences that the effects would be disastrous. The sales shielded him from millions of dollars in potential losses.

Details:

The seizure of Burr’s phone on Wednesday represents a new phase in a federal investigation into Burr’s sale on Feb. 13 of stock worth $630,000 to $1.7 million, a sizable portion of the senator’s portfolio.

The one-day sale involved 33 individual trades, and occurred just a day after the Dow Jones Industrial Average reached a historic all-time closing high of 29,551.42.

One week later, on Feb. 20 markets began a steep slide over fears that the coronavirus would paralyze the global economy. In the weeks following Burr’s sale, the Dow lost 30% of its value, but it has since recovered some of those losses.

As chairman of the Senate Intelligence Committee, Burr was given access to classified intelligence reports in January and early February that contained dire warnings about the coronavirus, according to The Washington Post, which reported on the intelligence assessments.

After years of work, Burr is still finalizing his committee’s bipartisan report on the investigation of Russia’s meddling in the 2016 election.

This morning, it was announced that Burr will step down as Intelligence Committee Chairman, effective this Friday:

Senate Majority Leader Mitch McConnell said in a statement Thursday that Burr “contacted me this morning to inform me of his decision to step aside as Chairman of the Intelligence Committee during the pendency of the investigation.”

After McConnell made his announcement, Burr spoke to reporters, saying that he was stepping away from his position as intelligence chair because:

“this is a distraction to the hard work of the committee and the members and I think the security of the country is too important to have any distractions.”

Burr said he has been cooperating with investigators “since the beginning” and will let the investigation play out. Burr has given no thought to resigning from the Senate, he said, and he does not believe he exercised poor judgment with his stock trades. He’ll remain a member of the Intelligence Committee.

Burr also told McClatchy today:

You have to go with what they’ve said publicly. I don’t talk about the investigation. I’m going to let it play out.

When it had been revealed that Burr had given a blunt warning about COVID-19 on Feb. 27 at a private event and did not issue a similar warning to the public, and when the revelation about his stock transaction was made known, polling showed that a majority of South Carolinians wanted him to step down at the time:

50% of voters in the state think Burr should resign to 24% who think he should remain in office. Democrats (63/15) and independents (53/18) both think he should resign by wide margins but what might be most surprising is that even Republicans (31/38) only narrowly say Burr doesn’t need to resign.

Only 22% of voters approve of the job Burr’s doing to 54% who disapprove. When PPP last polled on him in June he had a 32/36 approval spread- since then his disapproval is up 18 points and his approval has dropped by 10 points.

When voters are informed later in the poll about his 1.7 million dollars in stock sales, 69% say that gives them ‘very serious’ concerns about him and support for his resignation goes up to 60%, with 22% opposed.

Additionally, other senators involved in coincidentally-timed stock transactions have also been approached by law enforcement. Sen. Diane Feinstein was recently questioned about her husband’s stock transactions at the end of January:

The senior California senator reported some stock sales of a biotech company on Jan. 31, when COVID-19 was waging in China and other countries but had not yet hit the United States or its economy in force. Her office said at the time that her husband made the sales and that her assets have been in a blind trust since she first came to the Senate in 1992.

Tom Mentzer, Feinstein’s communications director, said Feinstein last month “was asked some basic questions by law enforcement about her husband’s stock transactions,” and that he believes all the senators who were reported to have engaged in suspicious stock transactions related to coronavirus were approached to do the same…“She was happy to voluntarily answer those questions to set the record straight and provided additional documents to show she had no involvement in her husband’s transactions. There have been no follow up actions on this issue.”

45 Responses to “Sen. Richard Burr To Step Aside As Chairman of Intelligence Committee While Stock Sales Investigated”

  1. Hello.

    Dana (0feb77)

  2. Burr’s in trouble.

    What about Loeffer? Didn’t she do the same thing or did she have a blind trust? I don’t remember…

    whembly (c30c83)

  3. I hope Burr uses his fiduciary proceeds for a good lawyer. He’s going to need it.

    Hoi Polloi (dc4124)

  4. Burr and any other politicians alleged to have used insider info should be investigated and pay the price, if allegations are true.

    Colonel Haiku (167903)

  5. MSNBC when reporting this remarked on a couple of things

    Unlike the other senators, Burr was directly involved in the trades. The other trades were done by family members like Feinstein, or trustees.

    Also, the insider trading laws don’t really cover this sort of situation. Those laws are meant to focus on corporate insiders trading their own company’s stock. Politicians trading the general market would be stretching it.

    Kishnevi (ebf823)

  6. The last I read, Loeffler had claimed that the stock sales were made by a third party adviser, and that she would liquidate all of her individual stock holdings.

    Dana (0feb77)

  7. An Oklahoma senator is now being criticized for selling off stocks after a Senate novel coronavirus briefing during the end of January.

    However, U.S. Sen. Jim Inhofe said, he wasn’t at the meeting in question and the entire sale was a part of year-long effort to sell his stocks.

    “I was not at the meeting because we had all the Pro-life people up, I was participating in the Pro-life march at that time. So, the ones that are being confused of maybe having a conflict of interest or inside information were at a meeting that I did not attend,” said Inhofe.

    Dana (0feb77)

  8. Absent a smoking gun, it seems like a tough case to make.

    It didn’t really take Top Secret/SCI briefings to realize in mid-February that a huge economic dislocation was not just possible, but likely. Maybe not the full scale of the disaster, but clearly enough to put a serious dent in the Dow.

    Anyone not drinking the Kool-Aid could have also discerned early on that our government was headed for epic failure thanks to Trump’s fathomless idiocy.

    Dave (1bb933)

  9. Does Burr have the goods on any of the crooked 8?

    mg (8cbc69)

  10. Unlike the other senators, Burr was directly involved in the trades. The other trades were done by family members like Feinstein, or trustees.

    If one person passes on inside information to a relative or friend, and the second person then trades off that information, BOTH are guilty of insider trading.

    Not saying that means Feinstein in fact passed on such information, but in principle both scenarios are wrong.

    Bored Lawyer (56c962)

  11. OT, but great news on the higher education front… https://campusreform.org/?ID=14865

    Colonel Haiku (2601c0)

  12. # 11 — That is heartening. Someone finally realizes that authoritarianism and censorship are not things universities should be promoting.

    BTW, I watched a video about the first emperor of China, who unified the country. His prime minister (Li Si) was scholar who advocated and implemented a totalitarian form of government, where everything was controlled from the top, and the government could dictate every detail of the life of its subjects.

    Sound familiar?

    Bored Lawyer (56c962)

  13. I think the material inside information that is used has to be about an actual security and not about the market generally – so putting aside the probable idiocy of what happened, he was assessing the overall market – not individual stocks with information specific to those stocks. Those of you who know insider trading better than I do, I’d be interested in your perspective. Also are there other laws or Senate ethics rules that would leave Burr open to a charge, rather than accusation of repellent but not illegal behavior?

    Lazlo Toth (cbb623)

  14. Which is the more likely pillow talk (considering Feinstein’s age), sex or stocks?

    norcal (a5428a)

  15. #13

    I am not a securities lawyer, but I would think that under the “misappropriation” theory it would be considered insider trading. See here: https://www.investopedia.com/terms/m/misappropriation_theory.asp

    Bored Lawyer (56c962)

  16. 12… it certainly does.

    Colonel Haiku (2601c0)

  17. 12. Bored Lawyer (56c962) — 5/14/2020 @ 4:01 pm

    BTW, I watched a video about the first emperor of China, who unified the country. His prime minister (Li Si) was scholar who advocated and implemented a totalitarian form of government, where everything was controlled from the top, and the government could dictate every detail of the life of its subjects.

    That’s the least of it.

    He ordered the biurning of the books, making contraband any book except on a few subject maters (agriculture, divination?astrology. medicine I think) Copies were retained in the palace but they were later destroyed in a rebellion.

    The Prime Minister also changed the Chinese method of writing and made it more complicated, so in case any book was found later, nobody would know how to read it. The dynasty did not last long enough for that to matter, but the system of writing stayed changed.

    He basically destroyed Chinese history. Some of Confucius; books survive in altered form.

    And if something survived and was found during the Han dynasty, things hinged on one copy. Not a good prospect for survival.

    Sound familiar?

    No.

    Nothing in western history resembles that.

    Sammy Finkelman (20d02d)

  18. 4. Colonel Haiku (167903) — 5/14/2020 @ 2:30 pm

    Burr and any other politicians alleged to have used insider info should be investigated and pay the price, if allegations are true.

    Nobody had any real inside information about the virus, let alone the effect it was going to hav on the economy.

    The one piece of inside (but not classified) information he might have had would be knowledge that if the virus was loose in the United States, what the experts would recommend is shutdowns like they had in China. And he could guess what would happen then

    Before that it the ideas did not mandatory business closures.

    https://www.cdc.gov/mmwr/volumes/66/rr/rr6601a1.htm

    Community Mitigation Guidelines to Prevent Pandemic Influenza — United States, 2017

    Recommendations and Reports April 21, 2017

    …Several elements remain unchanged from the 2007 guidance….community measures aimed at increasing social distancing (e.g., school closures and dismissals, social distancing in workplaces, and postponing or cancelling mass gatherings); and environmental measures (e.g., routine cleaning of frequently touched surfaces).

    They called these things nonpharmaceutical interventions or NPIs.

    I can’t even find mandatory business shutdowns here, on Feb 6, 2020:

    https://wwwnc.cdc.gov/eid/article/26/5/19-0995_article

    Original Publication Date: February 06, 2020

    Sammy Finkelman (20d02d)

  19. “ Sound familiar?”

    – Bored Lawyer

    Like “I have an Article II where I can do whatever I want as President”? Yeah, kinda.

    Leviticus (b3a900)

  20. Gee, I hope none of them lied to investigators.

    Kevin M (ab1c11)

  21. Gee, I hope none of them lied to investigators.

    Or if they did, they’d better hope they’re Trump friends.

    Patterico (115b1f)

  22. Which is the more likely pillow talk (considering Feinstein’s age), sex or stocks?

    Who gets to be in which house when?

    Kevin M (ab1c11)

  23. Or if they did, they’d better hope they’re Trump friends.

    Trump would probably burn a GOP Senator or two if it was to his advantage.

    Kevin M (ab1c11)

  24. But, to dial back the snark a bit, THIS is an actual investigation and lying to the investigators ought to have consequences.

    Kevin M (ab1c11)

  25. I always liked Burr and thought him an independent thinker and actor. I stopped thinking that when he voted to acquit on the articles of impeachment.

    JRH (14e837)

  26. WTF is wrong with Cocaine Mitch, deviating from The Narrative?!

    McConnell admits he was wrong to say Obama administration failed to leave pandemic playbook

    Senate Majority Leader Mitch McConnell conceded Thursday night that he was wrong to claim that the Obama administration had not left behind a plan to deal with a pandemic in the US.

    “I was wrong. They did leave behind a plan, so I clearly made a mistake in that regard,” McConnell said during an interview with Fox News’ Bret Baier.

    The concession comes days after he falsely accused the Obama administration of failing to leave the Trump administration “any kind of game plan” for something like the coronavirus pandemic during a Trump campaign online chat with Lara Trump, the President’s daughter-in-law.

    “They claim pandemics only happen once every hundred years but what if that’s no longer true? We want to be early, ready for the next one, because clearly the Obama administration did not leave to this administration any kind of game plan for something like this,” McConnell had said Monday.

    In reality, former President Barrack Obama’s White House National Security Council left the Trump administration a detailed document on how to respond to a pandemic.

    The document, whose existence was publicly revealed by Politico in March, is called the Playbook for Early Response to High-Consequence Emerging Infectious Disease Threats and Biological Incidents.

    Dave (1bb933)

  27. Nothing is wrong with float my boat to china mitch, he clearly and dearly wants to be minority leader.

    mg (8cbc69)

  28. he clearly and dearly wants to be minority leader

    Agreed.

    There’s no other explanation for the way he whitewashed Trump’s corruption during the impeachment trial.

    Dave (1bb933)

  29. It’s easier to be minority leader, you don’t have to produce results or follow through on the rhetoric you know is idiocy, but the people loooooovvvvvveeeeee.

    Nic (896fdf)

  30. float my boat to china mitch will spend all he can to keep Trump republicans from winning any upcoming election. He is a bought and paid for lap dog for china, he must lose the senate.

    mg (8cbc69)

  31. He is a bought and paid for lap dog for china, he must lose the senate.

    Because China doesn’t want their “bought and paid for lap dog” to be majority leader?

    Diabolical!

    Dave (1bb933)

  32. He is a bought and paid for lap dog for china, he must lose the senate.

    To be fair, it’s his wife that is bought and paid for. The Turtle is just a kept man.

    Colonel Klink (Ret) (305827)

  33. Pelosi runs the country.

    mg (8cbc69)

  34. Casablanca Dave!

    Colonel Haiku (2601c0)

  35. @33 With Rs in charge of the Executive branch and the Senate? How weak they must be, then.

    Nic (896fdf)

  36. The Turtle is just a kept man.

    You have to respect that.

    Dave (1bb933)

  37. You’re just realizing that about Mitch and his better half, aka America’s Most Prolific Beard?

    urbanleftbehind (b651fe)

  38. “I was wrong. They did leave behind a plan,

    Actually, it was Bush [W] who left behind a plan.

    In February 2007:

    https://stacks.cdc.gov/view/cdc/11425

    It was replaced in April, 2017, after Trump had already become president:

    https://stacks.cdc.gov/view/cdc/45220

    Now a lot of the work on updating it had been done when Obama was president. The Oama administation had worked five years on it, and never came to a decision to do anything about it.

    Here’s the story:

    https://www.nytimes.com/2020/04/22/us/politics/social-distancing-coronavirus.html

    The effort began in the summer of 2005 when Mr. Bush, already concerned with bioterrorism after the Sept. 11, 2001, attacks, read a forthcoming book, “The Great Influenza,” by John M. Barry, about the Spanish flu outbreak of 1918….

    Sammy Finkelman (20d02d)

  39. Pelosi runs the country.

    When she should be in jail for ripping up Trump’s SOTU!

    How weak they must be, then.

    Yeah, about that:

    China has been working very hard to contain the Coronavirus. The United States greatly appreciates their efforts and transparency. It will all work out well. In particular, on behalf of the American People, I want to thank President Xi!

    Dave (1bb933)

  40. Politicians using insider information to enrich themselves? Gee, imagine that. But then they passed legislation making themselves immune from prosecution for it, so . . .

    Gawain's Ghost (b25cd1)

  41. I dunno about all this “insider trading” talk or even if there was highly super-duper info provided to the congress-critters. Sophisticated investors pay for good information, and there are some remarkably good vendors out there in response to that market demand. I’m thinking that there were several of these outfits who saw the spit and the fan converging, and they are available to anyone with the price.

    Ragspierre (d9bec9)

  42. with Burr, there is also he issue of trying to keep his opinion to himself, or a limited number of people, while also selling stock. (somebody is leaking this spin)

    On Feb, 7 he made a statement for the general public, He later told (donors?) that travel could be restricted, schools closed, and that it could be like the 1918 pandemic. None of the things done in 1918 which severely damaged the economy though. (perhaps because of World War I related massive federal government spending? There was a depression – the word recession was only nvented in 1937 ti distinguish that from the Great Depression and the Great Deflation in 1920 after this was largely over, In the Geat Deflation prices dropped by 35% to 45% – commodity prices in May, 100 years ago, ad consumer prices around November)

    On Fwbruary 13, he made 33 separate stock trades.

    Sammy Finkelman (20d02d)

  43. https://www.wsj.com/articles/fbi-seizes-sen-burrs-cellphone-in-probe-of-stock-trades-11589472055

    An analysis of all of Mr. Burr’s trades by the WSJ determined that the February trades were his best timed—in terms of both losses avoided and beating the results of his previous trades—since joining Congress.

    Previously, when Mr. Burr sold stock, his returns roughly matched the overall market over the next 20 trading days. But this year, Mr. Burr’s stock picks were much more successful, helping him avoid losses of nearly 13% against the market. In prior years, Mr. Burr routinely bought more stock than he sold. But this year he and his wife only purchased between $16,000 and $65,000 worth of stock, all before their Feb. 13 sales.

    Congressional rules require that trades be reported in ranges, not precise figures.

    Mr. Burr has said he based those decisions on public information, including CNBC’s reports out of Asia at the time….

    The only “inside information” Burr could have had was on possible pandemic responses. He had a front row seat. Even then, he’d have to reason the economic effects, or some of them.

    They are suspicious that he was saying different things to different people, and didn’t want there to be a general selloff before he get out. That’s not the same thing as trading on the basis of what he learned in Congress tat was not public.

    Sammy Finkelman (20d02d)

  44. Previously, when Mr. Burr sold stock, his returns roughly matched the overall market over the next 20 trading days.

    If that’s what they got, they got nutin’.

    Ragspierre (d9bec9)

  45. Pelosi runs the country.

    8 ball pool (0ae33b)


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