Senators under fire over virus ‘insider trading’

Senators under fire over virus ‘insider trading’
Richard Burr and Kelly LoefflerImage copyright Getty Images
Image caption Richard Burr is chairman of the Senate Intelligence Committee while Kelly Loeffler sits on the Senate Health Committee

Two US Republican Senators are facing calls to resign over allegations they used insider knowledge to sell shares before prices fell due to coronavirus fears.

Richard Burr reportedly dumped up to $1.7m (£1.45m) of stocks last month.

Kelly Loeffler is reported to have sold holdings worth up to $3m in a series of transactions beginning the same day as a Senate briefing on the virus.

Both Senators have denied any impropriety.

Under US law, it is illegal for members of Congress to trade based on non-public information gathered during their official duties.

Mr Burr, chairman of the Senate Intelligence Committee, has also come under fire after US outlet NPR obtained a recording of him warning a group of wealthy constituents last month about the dire economic impact of the coronavirus, at a time when the Trump administration was publicly downplaying the threat. He also told the group to curtail their travel.

In response, Mr Burr has accused NPR of “misrepresenting” his speech.

The latest revelations come after an investigation by ProPublica into his financial filings.

As chairman of the Senate Intelligence Committee, Mr Burr receives nearly daily briefings on threats to US national security,

On 7 February, shortly after the first case of coronavirus was reported, Mr Burr wrote on Fox News that the US government was “better prepared than ever” to tackle an outbreak.

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Media captionCoronavirus: Trump blames media for virus spread

But a week later, when President Donald Trump assured the public that the virus would not hit America hard, Mr Burr and his wife sold at least $628,000 and as much as $1.72 million in stocks. Two weeks after that, he gave the speech obtained by NPR.

Among those calling for his resignation and investigation are Fox News host Tucker Carlson, who has historically been a vocal supporter of the Trump administration

Several of the stocks that Mr Burr sold, including in the hotel and travel industry, have since lost value.

On Friday, Mr Burr again responded, tweeting that his decision to sell stock was made "solely based on public news reports". He specifically cited the Asia coverage provided by the CNBC network.

"Understanding the assumption many could make in hindsight however," he said in a short statement, "I spoke with the chairman of the Senate Ethics Committee this morning and asked him to open a complete view of the matter with full transparency".

A recipe for political upheaval

In these early days of the coronavirus crisis, the American people have shown a significant capacity to endure hardships to slow the spread of the virus. They've stayed in their homes and watched as the economy crumbled around them. Many have confronted the loss of income and wealth with no guarantee these setbacks are only temporary.

What they may not abide, however, is the prospect that the rich and influential have used their positions of power to avoid the worst consequences of this financial collapse - particularly as their leaders were telling them to hold fast.

That's why the stories of senators selling stock portfolios in anticipation of a market drop are so toxic. It's a controversy that cuts across normally impervious partisan lines and has even conservatives and those "close to the president" sharply criticising the Republicans, like North Carolina Senator Burr, at the centre of the fury.

This story comes on the heels of grumbling over how some of the well-connected were getting virus tests while most Americans had to wait. It's a sign that this pandemic could lay bare the sharp divides in the US between the haves and the have-nots and make more than a few realise that - perhaps to their surprise - they are among the latter, not the former.

That's a recipe for political upheaval.

Separately, an investigation by The Daily Beast found Mrs Loeffler, who sits on the Senate Health Committee, and her husband sold millions of dollars in stocks, beginning the day her Senate committee hosted a private, all-senators briefing on coronavirus by administration officials.

In the weeks after the sale, she sought to downplay the virus’ impact on the economy and public health in a series of tweets.

“Democrats have dangerously and intentionally misled the American people on #Coronavirus readiness,” she tweeted on 28 February.

“Here’s the truth: @realDonaldTrump & his administration are doing a great job working to keep Americans healthy & safe.”

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Media captionStudents on spring break defy Covid-19 warnings

Mrs Loefller has called The Daily Beast's investigation a “ridiculous and baseless attack”. In a statement she added that decisions about her investments were made by “multiple third party advisors without [her or her husband’s] knowledge or consent”.

The US government has come under criticism for its early response to the outbreak - testing and tracing for the virus has lagged far behind that of other countries, and the president initially downplayed the threat caused by the virus.

More than 14,000 cases of coronavirus have been reported in the US, along with 205 virus-related deaths, according to Johns Hopkins University.

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