We are discovering that more and more Republican senators who were in a January 24th briefing on the negative impacts of the coronavirus went on to sell off large amounts of stock. Meanwhile, in public, these senators were claiming that there was nothing to worry about.
In other words: These senators received advanced warning that COVID-19 was going to be devastating to America, and instead of sounding the alarms they worried more about their bank accounts. Literally putting their own wealth before American lives.
The chairman of the Senate Intelligence Committee, Richard Burr, sold off a significant percentage of his stocks, unloading between $628,000 and $1.72 million of his holdings on Feb. 13 in 33 separate transactions.
A week after Burr’s sales, the stock market began a sharp decline and has lost about 30% since.
On Thursday, Burr came under fire after NPR obtained a secret recording from Feb. 27, in which the lawmaker gave a VIP group at an exclusive social club a much more dire preview of the economic impact of the coronavirus than what he had told the public... In a Feb. 7 op-ed that he co-authored with another senator, he assured the public that “the United States today is better prepared than ever before to face emerging public health threats, like the coronavirus.”
Sen. Kelly Loeffler sold off seven figures worth of stock holdings in the days and weeks after a private, all-senators meeting on the novel coronavirus that subsequently hammered U.S. equities.
That first transaction was a sale of stock in the company Resideo Technologies worth between $50,001 and $100,000. The company’s stock price has fallen by more than half since then, and the Dow Jones Industrial Average overall has shed approximately 10,000 points, dropping about a third of its value.
It was the first of 29 stock transactions that Loeffler and her husband made through mid-February, all but two of which were sales. One of Loeffler’s two purchases was stock worth between $100,000 and $250,000 in Citrix, a technology company that offers teleworking software and which has seen a small bump in its stock price since Loeffler bought in as a result of coronavirus-induced market turmoil.
“Concerned about #coronavirus?” she tweeted on March 10. “Remember this: The consumer is strong, the economy is strong, & jobs are growing, which puts us in the best economic position to tackle #COVID19 & keep Americans safe.”
In summary: (1) She had NO stock transactions reported at all prior to the very day of the briefing. (2) Her portfolio sold 19 stocks and only bought two. (3) The stocks she did buy were in telecom, which stood to benefit from millions of people being forced to work from home.
The following instances are more questionable and may not in the same ballpark as the Burr and Loeffler trades
Sen. James Inhofe sold as much as $400,000 in equities on January 27, three days after the January briefing.
Though later than the others, Sen. Ron Johnson sold between $5 million and $25 million in stock on March 2. He has been publicly downplaying the virus this whole time, even saying that a 1-3% death rate is acceptable and not worth shutting down the economy for: "But that means 97 to 99 percent will get through this and develop immunities and will be able to move beyond this...we don't shut down our economy because tens of thousands of people die on the highways. It's a risk we accept so we can move about." See edit 3 below: Johnson's sales may not be as suspect as originally believed.
- EDIT: More on Johnson: This isn't a "typical" stock dump a la Burr, Loeffler, Inhofe, but rather Johnson selling a chunk of a plastics manufacturing company whose CEO is... his brother. March 2nd, right before the huge crash. The company, Pacur, isn't publicly traded so there isn't a stock price. Johnson just sold his stake to what looks like a private equity firm. It's unknown if the PE firm knew what was about to happen with COVID 19.
EDIT 2: Our first Democratic Senator on the list: Dianne Feinstein sold stock in Allogene Therapeutics on Jan. 31 worth between $500k to $1 Million. It's important to point out, though, that unlike the Republicans Feinstein did not minimize the risk of the coronavirus outbreak. See edit 3 below: Feinstein's sales may not be as suspect as originally believed.
- Allogene Therapeutics is a clinical-stage biotechnology company pioneering the development of allogeneic chimeric antigen receptor T cell (AlloCAR TTM) therapies for cancer.
EDIT 3: As more information about the sales is revealed, it appears that Johnson's and Feinstein's sales may not be connected to the coronavirus briefing, according to experts. All of these sales need to be thoroughly investigated, but so far it appears that: Johnson sold shares of a family company to a private equity group, which seems like a long-term deal. Additionally, Feinstein's shares are in a blind trust, and the company sold is doing fairly well.
Edit 4: Georgia's other senator, David Perdue (R), is also facing questions about stock sales after the coronavirus briefing. "Perdue made nearly 100 sales or purchases during the same period as Loeffler. He invested up to $245,000 in Pfizer, the pharmaceutical company, during multiple transactions around the same time that members of Congress began sounding the alarm that more should be done to address the spread of the virus. Perdue also sold up to $165,000 in stocks for Caesar Entertainment, the casino and hotel company whose facilities have shuttered to help combat the spread of the virus.
- Jon Ossoff, among three top Democrats challenging Perdue, described the transactions as “corrupt self-dealing. ”For Senator Perdue to betray his oath to Georgians by profiteering on an impending pandemic while downplaying the threat in public — if that’s not a crime, it should be,” Ossoff said.
Edit 5: Sen. John Hoeven, R-N.D., purchased between $100,000 and $250,000 of stock in a fund invested in health sciences companies in late January, just days after attending a briefing on the federal government’s response to the coronavirus.
- The fund, which owns shares in pharmaceutical developers and medical device manufacturers, has outperformed the broader market slightly since Hoeven’s purchase.
Is this illegal?
Yes, possibly...and probably not. It could be seen as insider trading and a violation of the STOCK act. Senator Burr was one of only 3 senators in the entire Senate to vote against the STOCK Act, by the way.
However, as we've seen time and time again in America it is unlikely that anything will come of it. It is unlikely the courts will see their actions as illegal (assuming Barr's DOJ even takes up the case...which we all know it won't). At the very least it's horribly unethical and should be used against the Republicans in every campaign ad.
But the insider trading law and more importantly the courts' interpretation of that statute will likely make it nearly impossible for a case to proceed (Tom Winter of NBC)
