The GOP chairman of the Senate Intelligence Committee said Thursday he would temporarily step down from his committee post after the FBI seized his cellphone in its investigation into whether he sold a significant portion of his stock portfolio because of information he learned in the course of his Senate work.
Sen. Richard M. Burr (R-N.C.) said the investigation 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.”
Senate Majority Leader Mitch McConnell (R-Ky.) said he and Burr agreed that his decision to step aside “would be in the best interests of the committee” and would take effect Friday evening.
The move marks a significant escalation of law enforcement’s investigation into potentially millions of dollars’ worth of stock trades that Burr made as the coronavirus first struck the United States.
The Times reported Wednesday that Burr turned his phone over to agents after they served a search warrant on him at his residence in the Washington area.
Burr sold a significant portion of his stock portfolio in 33 separate transactions on Feb. 13, just as his committee was receiving coronavirus briefings from U.S. public health officials and a week before the stock market declined sharply. Much of the stock was invested in businesses that in subsequent weeks were hit hard by the plunging market.
Burr has previously denied any wrongdoing, saying he made the trades based solely on public information. He said Thursday that he is complying with the FBI’s investigation and that he plans to serve out his term, which ends in 2022.
“From the outset, Sen. Burr has been focused on an appropriate and thorough review of the facts in this matter, which will establish that his actions were appropriate,” said attorney Alice Fisher, who is advising him.
Several other senators from both parties also sold and bought stock ahead of the market downturn. It’s not clear who else might by under examination by the Justice Department.
Sen. Dianne Feinstein (D-Calif.) was questioned last month by law enforcement about stock transactions by her husband, Richard Blum, shortly before stocks tumbled.
Feinstein was asked “basic factual” questions, according to her spokesman, Tom Mentzer.
“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,” Mentzer said. “There have been no follow-up actions on this issue.”
Feinstein’s personal stocks have been in a blind trust since she came to the Senate, Mentzer said. The stocks traded in February were owned by her husband. Senators are required to disclose their spouses’ financial holdings.
While walking into the Capitol on Thursday, Sen. Kelly Loeffler (R-Ga.), who sold stocks valued at between $1.25 million and $3.1 million in late February and early March in companies that later dropped significantly, ignored questions about whether she had been questioned.
CNN reported that Feinstein received written questions from the FBI. That is a sign the investigation into her was not a serious one, according to a former federal prosecutor.
“That is the sort of action you take — submitting written questions — when you need to check a box,” said Steven Levin, a former federal prosecutor who specialized in public corruption cases. “On the totem pole of seriousness, anytime law enforcement submits written questions, it means it’s not a high priority. It suggests they don’t have much, if any, evidence there was illegal activity.”
But the search warrant in Burr’s case is a much more serious sign. Prosecutors and agents would have needed high-level approval from the Justice Department to seek a warrant on a sitting U.S. senator. And such a warrant would certainly be scrutinized by any judge to ensure it exceeds the necessary threshold of proof, or probable cause.
“In my experience, when a public official is served with a search warrant, it does not end well,” Levin said. “Law enforcement officials are hesitant to take such bold action, knowing it will make the news, unless they are confident that they have more than probable cause that the target has engaged in criminal conduct.”
Burr has often found himself crosswise with more-conservative Republicans because his work as chairman of the Senate Intelligence Committee has put him at odds with President Trump.
Last month, Republicans and Democrats on the panel released a report based on three years of investigation that backed the U.S. intelligence community’s conclusion that Russia interfered with the 2016 presidential election at Russian President Vladimir Putin’s behest.
The report rejected Trump’s claim that the intelligence community was biased against him when it made its own conclusion to the same effect. The committee is still expected to release a final report on whether Trump’s campaign conspired with Russia.
The Intelligence Committee has also long praised the intelligence community, which Trump has questioned.
In 2017, Burr said he would “make it a habit” to no longer go to the White House while his committee’s investigation into the president was underway, he told the Hill newspaper.
Sean Davis, co-founder of the conservative online magazine the Federalist, tied the FBI raid to the panel’s Russia investigation, echoing the anger among some conservative Trump backers about the lengthy Senate investigation.
“As chairman of Senate Intel, Richard Burr ran interference for the corrupt intelligence and law enforcement bureaucracy behind the attempted coup against Trump. With the FBI raid of his home and seizure of his phone, I wonder if Burr regrets his refusal to do actual oversight,” Davis said in a tweet.
Burr has the public support of his fellow Senate Republicans, who repeatedly said Thursday in the sparsely populated Capitol that there is a presumption of innocence. Still, they supported his decision to step down from the high-profile position.
“I respect his decision to step down,” said Sen. John Cornyn (R-Texas). “Obviously, he’s entitled to a presumption of innocence, just like anybody else, and I know he’s asked the Ethics Committee to conduct an investigation as well. So, the best I can tell, he is trying to do the right thing by the Senate, and I appreciate it.”
Others suggested that Burr likely was closely watching the virus developments in China, as Burr himself has suggested.
“I don’t believe he did anything criminally wrong; maybe used poor judgment, I guess,” said Sen. Lindsey Graham (R-S.C.). “But I know Richard and he’s the one guy I can tell you who actually does watch CNBC Hong Kong.”
Republicans expressed hope that the cloud of the investigation would clear soon.
“My assumption is this move by the FBI hopefully means they’re getting close to winding things up, and we’ll see where it goes. Obviously they’ve got to follow the facts,” said Sen. John Thune (R-S.D.), the majority whip.
The FBI investigation focuses on whether Burr violated a law preventing members of Congress from trading on insider information they have gleaned from their official work. Burr was one of three senators who voted against the law, the STOCK Act, in 2012.
Congress passed the bill amid public outrage over members of Congress making legal trades using nonpublic information they obtained during their official duties.
Members of Congress are legally barred by the act from buying and selling based on classified, nonpublic information they get through their official duties, but prosecuting cases of insider trading can be difficult because it is hard to prove that the information they used came from nonpublic sources alone.
The Senate Ethics Committee cites those difficulties in its guidance on the STOCK Act, noting that “a great deal of Congressional work is conducted on the public record or in the public realm during committee hearings, and markups, floor activity, and speeches.”
In fact, the most recent case of insider trading by a member of Congress was not brought under the STOCK Act, but rather under a securities law that prohibits anyone with inside information from making trades before the information is publicly available.
Last year, former Rep. Chris Collins (R-N.Y.) pleaded guilty to trading in a pharmacy company stock after receiving information about failed drug trials. He was sentenced to more than two years in jail. Collins did not get the information through his official duties, but because he served on the company’s board.