WASHINGTON -- The Justice Department is investigating stock trades made by at least one member of Congress as the United States braced for the pandemic threat of coronavirus, according to a person familiar with the matter.
The investigation is being coordinated with the Securities and Exchange Commission. It was not immediately clear how many stock trades, or lawmakers, would come under scrutiny in the probe, but it is looking at the trades of Sen. Richard Burr, R-N.C., chairman of the Senate Intelligence Committee.
As head of the committee, Burr received frequent briefings and reports on the threat of the virus. He also sits on the Senate Health, Education, Labor and Pensions Committee, which received briefings on the pandemic.
In mid-February, Burr sold 33 stocks held by him and his spouse, estimated to be worth between $628,033 and $1.7 million, Senate financial disclosures show. It was the largest number of stocks he had sold in one day since at least 2016, records show.
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A Justice Department spokeswoman declined to comment, as did a spokesman for the SEC. The investigation was first reported by CNN.
Burr's lawyer, Alice Fisher, said in a statement that the law allows any American, including a senator, to "participate in the stock market based on public information, as Senator Burr did. When this issue arose, Senator Burr immediately asked the Senate Ethics Committee to conduct a complete review, and he will cooperate with that review as well as any other appropriate inquiry. Senator Burr welcomes a thorough review of the facts in this matter, which will establish that his actions were appropriate."
A law called the Stock Act prohibits members of Congress, their staffers and other federal officials from trading on insider information obtained from their government work. No one has been charged under the Stock Act since its passage in 2012, and some legal experts consider it a difficult statute under which to file criminal charges.
The investigation is in its early stages, according to the person familiar with the matter, who spoke on condition of anonymity to discuss a sensitive case.
Melanie Sloan, a senior adviser to the watchdog group American Oversight, said that because of the speech and debate clause, Burr "cannot be questioned about what he learned regarding the coming pandemic in his role as chair of the Intelligence Committee, making prosecution improbable." She said the Senate Ethics Committee has jurisdiction over the issue, however, and if it finds Burr traded on inside information, it could recommend his expulsion.
Burr's stock sales included shares in some industries that were later hit hardest by the pandemic's rapid spread throughout the United States, including hotels, restaurants, shipping, drug manufacturing and health care, records show. The senator has said he relied specifically on "CNBC's daily health and science reporting out of its Asia bureaus" to inform his trades. The outbreak originated in China.
Rep. Matt Gaetz, R-Fla., an outspoken ally of President Donald Trump, tweeted Monday that his party should remove Burr from his powerful committee chairman position while the investigation goes on, asking how Senate Majority Leader Mitch McConnell, R-Ky., can justify leaving Burr in that position.
"Republicans need to do a better job cleaning our own house," Gaetz wrote.
A Section on 03/31/2020