So how much trouble could he be in, both legally and politically? Let’s explore.
It’s significant that FBI agents got a search warrant for his phone: That means that agents were able to go to a neutral judge and say they had probable cause that this phone could provide evidence of insider trading. And the judge agreed.
That’s more significant than, say, issuing a subpoena to get documents and records, said Jack Sharman, a white-collar defense lawyer who was also special counsel to the House Financial Services Committee for the Whitewater investigation of President Bill Clinton. Sharman said the latter is more like an investigation into potential wrongdoing; it doesn’t mean there’s evidence of a crime. The search warrant issued against Burr suggests something more serious.
And the sensitive nature of the FBI investigating a sitting senator — one who heads the Intelligence Committee no less — probably means top officials signed off on the necessity of this search warrant. Indeed, The Washington Post talked to a senior official in the Justice Department who said the warrant for Burr’s cellphone was approved “at the highest levels.”
There is a lot in Burr’s phone that agents now have access to: The FBI retrieved the phone at Burr’s home and has a warrant to look at data stored in the cloud, reports The Post. Sharman said that probably means agents are looking for texts and calls from Burr to his brokers and financial advisers, as well as the exact timing of those communications. The timing is important. As chair of the intelligence committee, Burr was one of a handful of senators probably receiving daily coronavirus briefings in the weeks leading up to his sell-off of as much as $1.7 million in stocks, including in hotel, restaurant and shipping industries that got hit hard by the coronavirus.
“That’s pretty standard insider-trading stuff you want to look at,” Sharman said. “But it’s going to produce a significant amount of data, and that can’t be a positive sign for Burr.”
There’s a law that says what Burr is alleged to have done is illegal: The 2012 Stock Act was designed to prevent members of Congress from trading on information only they have. As The Post’s Timothy Bella notes, before that law passed, lawmakers’ investments were performing statistically better than the market average.
Burr voted against it, saying an additional law wasn’t necessary when there were existing federal regulations.
That being said, if Burr is charged with a crime under the Stock Act, he would be the first. And he could try to argue a nuanced but important distinction in insider trading law, Sharman said: that information he was learning in private also leaked out into the public sphere and eventually became all mixed together.
Burr isn’t arguing that now: He has said he made his trades based on CNBC reporting.
But if investigators allege that he traded on material information only a senator would have known, then could Burr argue that that information somehow got muddied by what’s public and private? “It may be in this confidential context,” Sharman said, “but it’s identical to what journalists are writing about, so does it really have that confidential nature?”
Also, this is a good time to ask why other senators who sold stocks before the market tanked because of coronavirus — Republicans and Democrats alike — aren’t getting looked at by the FBI (at least that we know of). Burr appears to have ordered the stocks sold himself; Sen. Kelly Loeffler (R-Ga.), whose husband is chairman of the New York Stock Exchange, said an independent financial adviser made those decisions for her. Sen. Dianne Feinstein (D-Calif.) said her husband sold stocks. Feinstein and others said they weren’t in coronavirus briefings that Burr received.
Update: The Post now reports that Feinstein was questioned by authorities over her husband’s trades. Her office said nothing more came of it.
Burr doesn’t seem to have the backing of Republican leadership: Burr stepped down from chairing the Intelligence Committee during the investigation, Senate Majority Leader Mitch McConnell (R-Ky.) announced Thursday. What’s more, Trump has tweeted unrelated criticism of Burr, suggesting that Burr might be falling from his graces. And Burr’s fellow senator from North Carolina, Thom Tillis (R), distanced himself from Burr almost immediately after news of Burr’s stock sales broke, saying he thinks Burr owes “North Carolinians an explanation.” Tillis has embraced Trump and his base to win a tight reelection, so that’s telling.
Burr has said his term, which ends in 2022, will probably be his last. So the political fallout may matter less than the legal scrutiny he faces. But both are significant.