As head of the powerful committee, Burr received 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 to be worth between $628,033 and $1.7 million, Senate financial disclosures show. It was the largest number of stocks he had sold in one day since at least 2016, records show.
A Justice Department spokeswoman declined to comment, as did a spokesman for the SEC. The investigation was first reported by CNN.
Burr’s attorney, Alice Fisher, said in a statement that the law allows any American, including a senator, to “participate in the stock market based on public information, as Senator Burr did. When this issue arose, Senator Burr immediately asked the Senate Ethics Committee to conduct a complete review, and he will cooperate with that review as well as any other appropriate inquiry. Senator Burr welcomes a thorough review of the facts in this matter, which will establish that his actions were appropriate.”
A law called the Stock Act prohibits members of Congress, their staffers and other federal officials from trading on insider information obtained from their government work. No one has been charged under the Stock Act since its passage in 2012, and some legal experts consider it a difficult statute under which to file criminal charges.
The investigation is in its early stages, according to the person familiar with the matter, who spoke on the condition of anonymity to discuss a sensitive case. It was not immediately clear how many stock trades, or lawmakers, would come under scrutiny in the probe.
A past investigation suggests it would be difficult to build a chargeable case based on the Stock Act.
The Justice Department and the SEC launched an investigation into a House Ways and Means Committee staffer’s 2013 communications with a law firm shortly before federal health officials announced a decision affecting reimbursement rates for medical care. Investigators wanted to know if the staffer had tipped off a lobbyist, who in turn told his clients, allowing them to trade on the not-yet-public decision that significantly affected the value of health-care stocks.
The SEC issued a subpoena for congressional records, and in 2015 a federal judge ruled that Congress had to comply in part but did not have to turn over records related to “legislative activity.” The judge found the Constitution’s “speech and debate” clause prevented investigators from seizing such records.
Ultimately, no charges were filed against the former congressional staffer.
Melanie Sloan, a senior adviser to the watchdog group American Oversight, said that because of the speech and debate clause, Burr “cannot be questioned about what he learned regarding the coming pandemic in his role as chair of the Intelligence Committee, making prosecution improbable.” She said the Senate Ethics Committee, however, has jurisdiction over the issue and if it finds Burr traded on inside information, could recommend his expulsion.
Burr’s stock sales included shares in some industries that were later hit hardest by the pandemic’s rapid spread throughout the United States, including hotels, restaurants, shipping, drug manufacturing and health care, records show. The senator has said he relied specifically on “CNBC’s daily health and science reporting out of its Asia bureaus” to inform his trades. The outbreak originated in China.
Rep. Matt Gaetz (R-Fla.), an outspoken ally of President Trump’s, tweeted Monday that his party should remove Burr from his powerful committee chairman position while the investigation goes on, asking how Senate Majority Leader Mitch McConnell (R-Ky.) can justify leaving Burr in that position.
“Republicans need to do a better job cleaning our own house,” Gaetz wrote.
Sen. Kelly Loeffler (R-Ga.) has also come under fire for her recent stock trades. In the weeks after a closed Senate briefing, Loeffler sold holdings valued between $1.25 million and $3.1 million in companies including ExxonMobil and AutoZone, which have seen their stock prices fall significantly. She also purchased shares in a company that sells teleworking software.
Loeffler has said that 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 that she learned of them only after they’d occurred. “Certainly I had no involvement,” Loeffler told CNBC earlier this month.
A Loeffler spokeswoman said the senator had not been contacted by the FBI.