FILE – In this March 29, 2017 file photo, Senate Intelligence Committee Chairman Sen. Richard Burr, R-N.C. speaks to reporters about his panel’s investigation of Russian interference in the 2016 election, on Capitol Hill in Washington. In an exclusive interview with The Associated Press, the North Carolina Republican opened up about the investigation that has now consumed 19 months of his life. (AP Photo/J. Scott Applewhite)
On March 13th, a story broke about North Carolina Senator Richard Burr apparently dumping a lot of stock just as the market was starting to nosedive. To see how the “controversy” came about, let’s recap the story.
According to a financial disclosure form, some time in mid-February, Burr sold stock whose value was in the range of $600,000 to $1.6 million. Before selling the stock, he received at least one government briefing on the global Chinese virus situation. We do not know the details of what was discussed in that briefing.
Before that briefing, two other events happened having nothing to do with that meeting. On January 30th, the WHO had issued a global health warning. The following day, President Trump restricted travel to the United States from China. Both of these were well-documented and public knowledge. Thus, the threat of the Wuhan virus was known before the mid-February briefing. Near the end of February, the stock market began to decline and the outbreak situation worsened sending it into a 30% free-fall.
To understand the scandal, one must understand “insider trading.” It is when you have specific knowledge of non-public information about a particular company. There is no such thing as insider trading about the whole economy.
The breaking of the story, which left out the fact that Diane Feinstein (D-CA) also sold up to $6 million in stock in the same time period, led to a feeding frenzy on the Left and the Right. On March 19, the New York Times ran a headline that read: “Senator Richard Burr Sold a Fortune in Stocks as GOP Downplayed Coronavirus Threat.” The same newspaper ran an opinion piece that said: “They. Sold. Their. Stock” with the subtitle, “They Could Have Made a Difference But They Made a Profit.” The Washington Post jumped on the story the next day with this headline: “Sen. Richard Burr, Head of Powerful Committee, Sold Large Amount of Stocks Before Sharp Declines in Market.” More of the usual suspects followed suit.
But it was not just the Left media this time. Rich Moran of PJ Media had this to say on March 20th:
The issue is [Burr’s] dumping $1.6 million in stock after receiving several congressional briefings on the virus, trading on his inside information about how bad things were likely to get. It doesn’t get any more corrupt than that.
Suddenly it goes from a briefing to “several congressional briefings on the virus.” There were two. Over at Fox News, Tucker Carlson had this to say:
He had inside information about what could happen to our country, which is now happening, but he didn’t warn the public. . . . Instead he dumped his shares in hotel stocks so he wouldn’t lose money. There is no greater moral crime than betraying your country in a time of crisis. [Emphasis mine]
Richard Burr had gone from an inside trader to a traitor in less than 48 hours. In mid-February, there was no talk of quarantines, self-isolation, or shutting down an economy.
However, some objective facts are in order here. First, by the beginning of February- before one of the congressional briefings- there was talk that the Chinese virus could and likely would cause some disruption and instability in the markets. This was very public knowledge. Second, many people have, in the past, sold stock before a market decline and likely did this time also without the benefit of a government briefing.
Third, it makes no sense. It is virtually impossible to come out ahead (make a profit) before a market decline even if you know a market decline is imminent through public knowledge or a government briefing. When you sell stock, you have to pay a capital gains tax. That siphons anywhere from 10-20% off your investment into the coffers of Uncle Sam. Only in the most rarest of instances can you guess that (1) an overall decline is imminent and (2) that it will be greater than 20% so that it makes your decision a wise one.
No one knows what was said during those briefings, but it is doubtful that whoever briefed Congress predicted anything near the 30% decline we witnessed. And what is also interesting is that we do not know who did the briefing, what- other than generally it was about Wuhan virus- was discussed, and whether anything about the economy or the stock market was discussed at all. By all accounts, one was about preparedness in the face of a pandemic.
It should also be considered that there are 535 members of Congress, many holding stock portfolios and many who regularly receive government briefings and many who sell stock on a daily basis. What the press did here is looked at that 30% decline in the market, checked out Congressional disclosure forms, see who sold stock in the past 30 days and presto!- a scandal.
It is true that Burr addressed the Tar Heel Club which consisted of representatives from the Governor’s office in North Carolina as well as Democrat and Republican members of Congress from North Carolina. In that meeting, he noted the threat caused by the virus and there was talk it could reach 1918 pandemic proportions. However, put in context, some officials and experts were saying the same thing before Burr received any briefing on February 12. We do know he received one briefing at the Intelligence Committee of which he is Chairman. Using this same logic, Diane Feinstein- the ranking Democrat on that Committee- also engaged in greater “insider trading” since she sold $6 million in stock.
Admittedly, the optics are not that great. But it certainly is not “insider trading” under any definition of the term, nor is it traitorous, with all due respect to Tucker Carlson. And could they have really “made a difference” instead of a “profit” as the WaPo headline suggests? Were Burr, Feinstein and others (James Inhofe and Kelly Loefller are also mentioned in these articles) supposed to leave a government briefing the contents of which no one knows and warn the nation (making a difference) that the stock market was about to decline 30%?
This is a classic case of the media taking a non-story and turning it into a scandal. They will ignore other newsworthy stories- has anyone covered the Andrew Gillum arrest lately? Where are the front page stories about Ilhan Omar’s recent marriage to her campaign manager whose consulting company receives money from the Omar campaign? Hell- did the New York Times or Washington Post even run a story in bold headlines with periods after every word for emphasis about Omar likely marrying her brother to perpetuate some fraud of some kind? Clearly, there is more documented evidence of that fact than there is of “insider trading” by Richard Burr.
There is an FBI investigation now and Burr is fully cooperating with it. He (Burr) also requested the Senate Ethics Committee investigate the matter, something a “guilty” person is unlikely to do. When eventually cleared, will there be a retraction or apology? One doubts it.