One day after the FBI seized Republican senator Richard Burr’s cell phone as part of its investigation into allegations of unlawful insider trading, Majority Leader Mitch McConnell announced that Burr is stepping down as chairman of the Senate Intelligence Committee.
“Senator Burr contacted me this morning to inform me of his decision to step aside as Chairman of the Intelligence Committee during the pendency of the investigation,” McConnell said Thursday. “We agreed that this decision would be in the best interests of the committee and will be effective at the end of the day tomorrow.”
Prior to this week, the primary repercussions Burr faced over the allegations involved his standing in his home state of North Carolina. According to one poll, half of his constituents encouraged him to resign following his decision on February 13 to trade up to $1.72 million in stock holdings that may have been based on information about the emerging economic threat of the coronavirus that he received during Senate Intelligence Committee hearings. Considering Burr’s stated intention before the scandal to retire from the Senate in 2022, the blowback lacked electoral consequence.
But according to a report from the Los Angeles Times, Burr could soon find himself in legal trouble over his pre-pandemic sale, almost two months after it first became public. The senator has reportedly handed over his phone to FBI agents after he was served a search warrant for an investigation into his stock sales at his residence in Washington, D.C. While the Department of Justice previously announced its intention to probe Burr’s transactions, the paper notes that delivering such a warrant would need approval from the “highest ranks” of the DOJ, and that federal agents and prosecutors had to convince a judge that there was probable cause that the senator committed a crime. “This is a very, very big deal,” tweeted former U.S. Attorney for the Southern District of New York Preet Bharara shortly after the report was published on Wednesday night, noting that a judge would also take into consideration the “severe reputational harm to a sitting U.S. senator.”
The ordeal began on March 20, when ProPublica reported that on February 13, Burr sold between $628,000 and $1.72 million in over 30 transactions. Prior to the sale, he was privy to daily coronavirus briefings as chairman of the Senate Intelligence Committee, which likely informed him of the threat to come. While Burr was publicly espousing confidence that the U.S. was prepared to handle any public-health concern, privately he sold up to $250,000 in hotel stocks and warned donors at a luncheon of the magnitude of the threat. Burr has claimed that he used only publicly available knowledge to inform his decisions on the market. He has also denied coordinating trading with his brother-in-law, who, on February 13, also sold up to $280,000 worth of stocks.
If the investigation concludes that Burr did act on privileged information gleaned from his role on the Senate Intelligence and health committees, his sale would violate the 2012 STOCK Act, which prohibits lawmakers from using intelligence briefings to influence their market choices. Burr was one of three senators who voted against the law, which still allows lawmakers to own stock in industries they oversee.
Though Burr was the only senator named in a reported DOJ prob into lawmakers stock sales prior to the pandemic, Georgia senator Kelly Loeffler is also facing significant criticism — and electoral trouble — for her decision to dump stocks while publicly announcing that “the consumer is strong, the economy is strong.”
This post was updated following McConnell’s announcement.