$1.7M selloff pol quits big seat
FBI grabs GOPer’s phone in probe of insider trading
North Carolina Sen. Richard Burr stepped aside as chairman of the powerful Senate Intelligence Committee on Thursday amid revelations that the FBI has seized his cell phone as part of an insidertrading investigation into his pre-coronavirus stock dump.
Burr, who sold off upward of $1.7 million in stocks after his committee received classified briefings about the virus through January and early February, will give up the chairmanship for the “pendency of the investigation,” Senate Majority Leader Mitch McConnell said in a statement.
“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,” McConnell (R-Ky.) said.
Burr’s abrupt move came one day after the FBI served the Republican with a search warrant for his cell phone at his Washington area home.
The Los Angeles Times first reported the warrant.
It’s illegal for members of Congress to base investment decisions on nonpublic information, and the FBI appears to be looking into whether Burr’s stock selloff was motivated by the classified COVID-19 briefings he received at the beginning of the year.
Several of the stocks Burr sold were in hotel companies.
Roughly a week after Burr’s selloff, the U.S. stock market began to plummet sharply, as the coronavirus pandemic put the U.S. economy into a stranglehold. Hotels, in particular, have suffered massive losses because of the virus.
A spokeswoman for Burr declined to comment Thursday.
The senator has previously denied basing his investment decisions on classified information, saying the selloff was squarely influenced by “public news reports.”
Last week, ProPublica reported that Burr’s brother-inlaw, Trump appointee Gerald Fauth, sold of tens of thousands of dollars around the same time as the senator.
The Fauth connection contained echoes of the scandal that brought down former upstate New York Rep. Chris Collins, who was recently sentenced to 26 months in prison for giving his son a stock tip based on nonpublic information about a pharmaceutical company.
Former prosecutors said the FBI’s cell phone warrant marked a major escalation in its investigation of Burr.
“This is a very, very big deal,” tweeted Preet Bharara, the former U.S. attorney for the Southern District of New York. “This is not something the FBI or DOJ [Justice Department] does lightly. It requires layers of review, the blessing of a judge, and consideration of severe reputational harm to a sitting U.S. senator.”
Burr isn’t the only member of Congress who has come under scrutiny over eyebrowraising investment moves during the pandemic.
Arizona Sen. Kelly Loeffler also sold off hundreds of thousands of dollars worth of stock in January and early February after sitting in on classified coronavirus briefings.
Loeffler, a Republican, refused to answer questions from reporters on Capitol Hill Thursday about whether she had been interviewed by the FBI.
Sen. Dianne Feinstein, who also attended the briefings, said she has been interviewed by the FBI over her husband’s stock sales.
“Sen. Feinstein was asked some basic questions by law enforcement about her husband’s stock transactions,” the California Democrat’s office said in a statement. “She was happy to voluntarily answer those questions to set the record straight and provided additional documents to show she had no involvement in her husband’s transactions. There have been no followup actions on this issue.”