There was some big news published by a pair of California-based newspapers this week related to allegations that members of congress (and their spouses) bought and sold stock on the basis of confidential briefings detailing the potential severity of the coronavirus pandemic.
First, The Los Angeles Times reported late Wednesday that U.S. senator Richard Burr of North Carolina had his cell phone seized by federal agents who served a search warrant at his Washington, D.C. residence.
“The seizure represents a significant escalation in the investigation into whether Burr violated a law preventing members of Congress from trading on insider information they have gleaned from their official work,” reporters Del Quentin Wilber and Jennifer Haberkorn noted.
On Thursday, Burr stepped down as chairman of the U.S. Senate intelligence committee pending the outcome of the investigation.
First elected in 2004, Burr won a third six-year term in 2016 with 51.5 percent of the vote. During that campaign, he pledged not to run for reelection in 2022.
Meanwhile, on Thursday afternoon The San Francisco Chronicle reported that U.S. senator Dianne Feinstein – the ranking Democrat on the intelligence committee – “was questioned by federal law enforcement agents about stock trades her husband made.”
“Feinstein and Burr were two of four senators who made large stock trades as they were being told of the pandemic’s seriousness in briefings, but before the American public was largely aware of the severity of the situation,” reporter Tal Kopan noted.
Feinstein won a special election to the U.S. Senate in 1992 and has been reelected five times since then. She is not up for reelection again until 2024.
The other two senators linked to controversial stock trades? James Inhofe of Oklahoma and Kelly Loeffler of Georgia.
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Loeffler (above) and her husband – New York Stock Exchange chairman Jeffrey Sprecher – allegedly made 27 transactions to sell stocks valued as high as $3 million shortly after Loeffler received a closed door briefing on the pandemic on January 24, 2020 in Washington, D.C.
The 49-year-old Illinois native – who had been in office less than three weeks at the time the briefing was held – attended the meeting in her capacity as a member of the U.S. Senate health committee.
Loeffler was appointed to the U.S. Senate by Georgia governor Brian Kemp as a temporary replacement for Johnny Isakson, who resigned due to health concerns. She is running in an open primary in November for the final two years of Isakson’s term – and has said she will spend as much as $20 million of her own money on that race.
Inhofe is currently seeking a fifth six-year term in Oklahoma. He faces GOP primary voters on June 30, 2020 and – if victorious in that race – will stand for office against a Democratic opponent in November.
Not surprisingly, all four senators have denied any wrongdoing in connection with the insider trading allegations – offering a variety of explanations for the stock trades.
Also worth noting, Burr voted against a 2012 law dubbed the “Stop Trading on Congressional Knowledge” – or STOCK Act.
Our view? Obviously, we will await the outcome of the U.S. Department of Justice (DOJ) investigation into these allegations, but the bottom line here is pretty simple: Any member of congress who bought or sold stocks – or shared/ signaled information to family members/ those responsible for their portfolios – based on knowledge obtained in their role as an elected official should spend time behind bars.
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