Senator Burr was one of several senators accused of insider trading at the start of the coronavirus pandemic early in 2020. The FBI began a criminal investigation into the reports and even confiscated Burr’s phone. However, in early 2021, Burr said charges were not being pursued against him.
The SEC’s new filing is part of a civil case that suggests, for the first time, that Burr made his stock trades with nonpublic information and then passed along that info to his brother-in-law who also sold key stocks upon learning what Burr knew.
The SEC claims Burr, then Chairman of the Senate Intelligence Committee, called his broker early in the morning on February 13th, 2020 and sold over $1.6 million. Later in the morning, he made another phone call, this one to his brother-in-law, Gerald Fauth. After the call, Fauth immediately informed his broker and “sold between $97,000 and $280,000 worth of shares,” according to ProPublica.
Burr’s decision to dump his stocks came barely a week after penning an op-ed he wrote with a fellow senator that tried to instill confidence in the economy as the coronavirus continued its spread out of China.
We have written previously on the epidemic of insider trading by federal officials, beginning with Peter Schweizer’s best-selling book Throw Them All Out. Schweizer’s book helped spur Congress to pass the STOCK Act which not only forbid lawmakers from using nonpublic information to make stock trades, but also required officials to produce searchable and online public disclosures. Sadly, the disclosure provisions were gutted a year after the bill’s passage.
With Burr now the subject of a civil investigation, and the criminal investigation seemingly over, one is left to wonder: What will come of this?
Burr resigned from his committee chair position after the allegations surfaced last year and he later announced he would also not seek re-election in 2022 (although he’d previously said as much following his 2016 victory). Calls for his immediate resignation may resume, but unless GOP leadership joins that effort, that seems an unlikely outcome.
Some Senators are pushing for sweeping ethics legislation, but political pressure may be just effective as a deterrent force. The Democratic and Republican Parties can step up the pressure on their members to play by the rules or face being sidelined. Both parties are beset by stock trade allegations that implicate dozens of members this year alone, which could suggest a growing normalization among lawmakers of making dubious trades and happily amending their disclosures once called out.
Regardless of what solutions get enacted, Senator Burr’s story serves as a reminder that this epidemic is not going away.
