World / Politics

U.S. senators defend selling shares before coronavirus crash

Reuters

Two Republican senators defended themselves on Friday against heavy criticism, including calls that they resign, for selling substantial amounts of stocks before the coronavirus-induced market meltdown and after closed-door briefings on the outbreak.

Senate Intelligence Committee Chairman Richard Burr sold up to $1.7 million worth of stock on Feb. 13 in 33 separate transactions after offering public assurances the government was ready to battle the virus. His financial filings were first reported by ProPublica.

Sen. Kelly Loeffler also sold millions of dollars in shares in the weeks after lawmakers were first briefed on the virus, according to public filings.

Media reports about Burr and Loeffler, who have denied wrongdoing, prompted calls they leave office and other criticism from people as disparate as a progressive Democratic lawmaker and a conservative commentator.

The controversy came as Republican and Democratic senators worked with officials from President Donald Trump’s administration to try to hash out a massive bill to boost the U.S. economy as it reels from the effects of the coronavirus pandemic.

Burr made public comments in line with fellow Republican Trump’s early assurances that the country could easily deal with the outbreak. Trump’s tone has since become much more serious.

But the senator, whose committee position means he receives regular classified briefings on threats to the United States, told a private Washington luncheon two weeks after the stock sales that the coronavirus was much more aggressive “than anything that we have seen in recent history,” according to a recording obtained by National Public Radio.

The comments predated Wall Street’s series of avalanches.

In a statement Friday, Burr said he relied only on public news reports to guide his decision on the Feb. 13 stock sales.

“Understanding the assumption many could make in hindsight, however, I spoke this morning with the chairman of the Senate Ethics Committee and asked him to open a complete review of the matter with full transparency,” Burr said.

Senate Ethics Committee Chairman James Lankford declined to comment.

Loeffler, who was appointed to the Senate and took her seat in January, sold up to $3.1 million in stocks in 27 transactions from Jan. 24 through mid-February, as first reported by The Daily Beast. The report said the sales began the day her health committee hosted a private coronavirus briefing for senators.

Loeffler said she was informed of the transactions three weeks after they occurred and that she is not involved in investment decisions for her portfolio.

“This is a ridiculous and baseless attack,” she wrote on Twitter.

Trump said the senators should “possibly” be investigated.

“They said they did nothing wrong. I find them, the whole group, very honorable people,” he told reporters.

Critics on both ends of the political spectrum called on Burr and Loeffler to consider resigning or at least explain the sales.

“Senator Burr owes North Carolinians an explanation,” fellow North Carolinian and Republican Sen. Thom Tillis wrote on Twitter. “His self-referral to the Ethics Committee for their review is appropriate, there needs to be a professional and bipartisan inquiry into this matter.”

Democratic Representative Alexandria Ocasio-Cortez tweeted, “It is stomach-churning that the first thoughts these Senators had to a dire & classified #COVID briefing was how to profit off this crisis.” Ocasio-Cortez is a prominent member of the party’s progressive wing.

Conservative Fox News commentator Tucker Carlson told viewers on Thursday: “Maybe there is an honest explanation for what (Burr) did. If there is, he should share it with the rest of us immediately. Otherwise, he must resign from the Senate and face prosecution for insider trading.”

Republican Sen. James Inhofe and Democratic Sen. Dianne Feinstein also sold stock, according to filings, but both said they were not involved in the transactions. Neither has faced the same scrutiny as Burr and Loeffler.

Inhofe said he has divested most of his stock and is not involved in investment decisions. Feinstein’s money is in a blind trust.

Activist groups demanded federal officials and securities regulators investigate all four senators.

The controversy swirled as negotiations continued on a rescue plan for the reeling economy, after Republicans made a $1 trillion opening bid that included payments of up to $1,200 for many Americans.

Senate Majority Leader Mitch McConnell said he wanted a deal by the end of Friday. That would allow for Senate passage on Monday, sending the bill to the House of Representatives and clearing the way for Trump to sign it into law early in the coming week.

However, Senate Democratic Leader Chuck Schumer said Friday evening that the talks could spill into Saturday. The Democratic House leader, Speaker Nancy Pelosi, was involved in the talks on behalf of the House.

Aid to small businesses hard-hit because customers are staying at home appeared to have the broadest level of agreement, according to Republican Sen. Marco Rubio.

But serious disagreements weighed on the talks over issues including Democrats’ demand for a major expansion of the unemployment insurance system and state governors’ call for a $150 billion fund to help them respond to the virus.

Your news needs your support

Since the early stages of the COVID-19 crisis, The Japan Times has been providing free access to crucial news on the impact of the novel coronavirus as well as practical information about how to cope with the pandemic. Please consider subscribing today so we can continue offering you up-to-date, in-depth news about Japan.

Coronavirus banner