Burr steps aside amid stock probe
FBI seized his cellphone for investigation of trades following virus briefings
Sen. Richard M. Burr of North Carolina temporarily stepped down Thursday as chairman of the Senate Intelligence Committee, a day after FBI agents seized his cellphone as part of an investigation into whether he sold hundreds of thousands of dollars’ worth of stocks using nonpublic information about the coronavirus.
The seizure and an accompanying search for his electronic storage accounts, confirmed by an investigator briefed on the case, represented a significant escalation of the inquiry by the Justice Department and the Securities and Exchange Commission. They suggest that Burr, a Republican and one of the most influential members of Congress, may be in serious legal jeopardy.
Given the sensitivity surrounding the decision to obtain a search warrant on a sitting senator, the move was approved at the highest levels of the department, a senior Justice Department official said, meaning that Attorney General William Barr signed off on it. The warrant to obtain Burr’s phone was served to his lawyer, and investigators took Burr’s phone from him at his home, according to the official who, like the investigator, spoke on the condition of anonymity to publicly discuss the case.
Burr has denied he did anything wrong. With the investigation progressing, he said Thursday that he wanted to limit distraction to the Senate and informed Sen. Mitch McConnell, the majority leader, that he would step aside. Burr will remain a member of the committee, however, and continue serving in the Senate.
“This is a distraction to the hard work of the committee, and the members and I think that the security of the country is too important to have a distraction,” Burr told reporters in the Capitol. He declined to discuss the case but said he was co-operating with authorities.
McConnell, who had yet to pick a temporary successor for Burr as chairman, said that he agreed “this decision would be in the best interests of the committee and will be effective at the end of the day tomorrow.”
Burr sold the stock Feb. 12 before the market cratered and as President Donald Trump and some supporters were downplaying the threat of the virus. At the time, Burr was receiving briefings and involved in senators-only conversations suggesting the country faced a growing health crisis that could hurt the economy.
The Justice Department declined to comment on the warrant, which The Los Angeles Times first reported.
The senator has insisted that he based his trading decisions exclusively on publicly reported information that he read in financial media accounts out of Asia. Burr’s legal adviser, Alice Fisher, said the facts of the case would ultimately “establish that his actions were appropriate.”
It is not illegal for politicians to make investment decisions based on public information. But insider trading laws, including the Stock Act that governs Congress, prohibit officials from making decisions based on specific, nonpublic information they receive in the course of their work.
Paul Shumaker, a longtime adviser to Burr, said the senator was adamant that he had done nothing wrong and would not resign. “He has no choice but to fight this. He has to clear his name,” said Shumaker, adding that for Burr to quit would amount to “an admission of guilt” and that would not halt the inquiry.
Federal investigators have also scrutinized stock trades by other senators around the same time, including Sens. James Inhofe, Kelly Loeffler, and Dianne Feinstein, according to a person briefed on those cases. All three have said they did nothing wrong.
But Burr is the primary target of the investigation, and his case is more advanced, according one of the investigators. Unlike other senators under scrutiny, Burr has not denied that he initiated the sales himself or that they were related to concerns about the coronavirus. He has asked the Senate Ethics Committee to investigate.
The scrutiny of Burr stems from his decision to sell 33 stock holdings collectively worth $628,000 to $1.7 million.