UPDATE, Friday 11:00 am ET: Senator Burr released a statement on Twitter that said he used news reports as the only basis of his stock sales.
“I relied solely on public news reports to guide my decision regarding the sale of stocks on February 13,” the statement said.
Amid intense public scrutiny over his financial positions and his private messaging, Burr asked the Senate Ethics committee for an investigation into the matter.
Original report below:
Senator Richard Burr (R-N.C.) is under intense scrutiny after an NPR report showed that he revealed the severity of the impending coronavirus crisis to a group of North Carolinians in private and warned of major life disruptions weeks before the federal government did the same.
According to NPR’s Investigative Correspondent Tim Mak, Burr, who chairs the Senate Intelligence Committee, spoke on February 27 at a members-only luncheon with the North Carolina State Society’s Tar Heel Circle, where membership fees range from $500 to $10,000.
In a secret recording of his remarks obtained exclusively by NPR, Burr expressed grave concern about the impending COVID-19 pandemic several weeks before he ramped up his rhetoric in Washington.
“It is much more aggressive in its transmission than anything that we have seen in recent history," Burr said privately. “It is probably more akin to the 1918 pandemic."
For context, the 1918 Spanish flu pandemic infected 500 million people and killed 50 million.
He went on to warn of major life disruptions including changes in business life and school closures.
"There will be, I'm sure, times that communities, probably some in North Carolina, have a transmission rate where they say, 'Let's close schools for two weeks. Everybody stay home,'" Burr said on February 27. Schools did not close in North Carolina until March 16.
As recently as March 5, the senator released a statement praising the passage of the first round of coronavirus relief funding: “Luckily, we have a framework in place that has put us in a better position than any other country to respond to a public health threat, like the coronavirus.”
The framework he mentions is one he knows well. As an architect of the Pandemic and All-Hazards Preparedness Act, Burr is well-versed in the American response to pandemics and biothreats.
But as the coronavirus outbreak continues to wreak havoc on supply chains, hospitals and markets, new financial disclosures show that Burr made big money moves before the indices showed the historic declines seen in recent weeks.
According to a recent financial disclosure, both Burr and his wife sold between $500 thousand and $1.5 million in stocks on February 13, before the market experienced its major losses in the month of March. He did not purchase any additional stocks.
He closed positions in hotel chains like Extended Stay America ($STAY) which dropped from $13.05/share on Feb. 13 to $6.50/share on Mar. 19, and Park Hotels & Resorts ($PK) which traded at $23.35/share on Feb. 13 and closed at $6.09/share on Mar. 19. While it is unclear whether Burr made those trades as a result of information he had as the head of the Senate Intelligence Committee or as a member of the U.S. Senate, he managed to avoid significant losses as the market dropped sharply in the following weeks.
Members of Congress are required to abide by the STOCK Act. The STOCK Act prohibited lawmakers and their staffers “from using nonpublic information derived from their official positions for personal benefit, and for other purposes.”
The bill passed in 2012 with sweeping bipartisan support. Only three senators voted against it - Richard Burr was one of them.
The bill was amended in 2013 to alter some of its provisions and weaken the public’s access to financial disclosures. But, insider trading is still illegal.
The senator responded late Tuesday on Twitter, calling the original NPR report a “tabloid style hit piece” and defended his speech.
“Meeting constituents and talking to them about the work we’re doing in D.C. is an important part of our job, especially in times of uncertainty,” Burr tweeted.
