DOJ investigating lawmakers’ stock dumps ahead of coronavirus market crash

At least one lawmaker affected by the probe is Republican Sen. Richard Bur, who unloaded up to $1.7 million in stocks.

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SOURCECommon Dreams

The Justice Department is investigating at least one federal lawmaker over suspiciously timed stock transactions ahead of the market crash triggered by the coronavirus crisis.

The probe ensnares, at minimum, Sen. Richard Burr (R-N.C.), chair of the Senate Intelligence Committee, CNN reported Monday.

Burr and his wife unloaded between $628,000 and $1.7 million in publicly traded stocks on Feb. 13. Around the same time, as Common Dreams reported, Burr warned big-dollar donors about the severity of deadly virus but expressed a different message publicly. The “United States today is better prepared than ever before to face emerging public health threats, like the coronavirus,” he wrote in February.

CNN noted that “the sales have come under fire after senators received closed-door briefings about the virus over the past several weeks—before the market began trending downward.”

Burr has claimed he made the transactions based on publicly available information. Making the transactions based on information not publicly available would be a violation of the STOCK Act—2012 legislation he joined just two other senators in voting against

From CNN:

The inquiry, which is still in its early stages and being done in coordination with the Securities and Exchange Commission, has so far included outreach from the FBI to at least one lawmaker, Sen. Richard Burr, seeking information about the trades, according to one of the sources. […] 

it’s not clear who else the Justice Department is looking at and no other senator said they have been contacted by law enforcement. Burr is the only lawmaker to have asked for an Ethics Committee review.

Burr’s transactions are not the only ones to have raised eyebrows. 

Sen. Kelly Loeffler (R-Ga.) —whose husband is chairman and CEO of the New York Stock Exchange—sold off millions of dollars worth of stock holdings ahead of the market demise. The first sale occurred the same day she attended a private briefing on the coronavirus from officials including CDC director Robert Redfield and Anthony Fauci, the head of the National Institute of Allergy and Infectious Diseases. Loeffler has rejected criticism of the stock sales she made in January and February, saying that the decisions were made by third-party advisors.

For Noah Bookbinder, executive director of watchdog group CREW, Burr’s and Loeffler’s defenses don’t hold water.

“The job of a U.S. senator is to serve the American people,” Bookbinder said last month. “It appears that in a time of crisis, these senators chose instead to serve themselves, violating the public trust and abdicating their duty. They must be immediately investigated.”

Dylan Hedtler-Gaudette, a policy analyst at the Project on Government Oversight, pointed also to transactions made on by Sens. Dianne Feinstein (D-Calif.) and James Inhofe (R-Okla.)—though he said those were “far less suspicious.” Nevertheless, said Hedtler-Gaudette, the transactions by all the lawmakers in question make clear the need to beef up regulations. 

“Suspiciously timed stock sales by multiple members of Congress across both chambers and both parties illustrate the weaknesses in the current legal framework regulating how high-ranking government officials manage their finances while privy to information most Americans don’t have,” he wrote Friday. “Those rules should be strengthened so the public has faith that our leaders are using their positions to help us, not themselves.”

News of the Justice Department probe comes a week after three House Democrats—Reps. Alexandria Ocasio-Cortez (N.Y.), Raja Krishnamoorthi (Ill.), and Joe Neguse (Colo.)—announced their plan to introduce legislation that would prevent members of Congress from trading individual stocks and investments while in office.

“Members of Congress should not be allowed to buy and sell individual stock,” Ocasio-Cortez said in a statement on the legislation, the Ban Conflicted Trading Act. “We are here to serve the public, not to profiteer.”

Sen. Jeff Merkley (D-Ore.) who introduced similar legislation in the Senate last year, applauded the Democrats’ bill.

“We need to know that elected leaders are making decisions based on the nation’s interest, not their own,” said Merkley.

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