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Defying the Odds

Defying the Odds
New book about the 2016 election.

Friday, March 20, 2020

Senators, Coronavirus, and Stock Trades

In Defying the Odds, we discuss state and congressional elections as well as the presidential race. The update looks at political and demographic trends through the 2018 midterm.  Our next book will explain 2020.  Coronavirus has suddenly become a major part of the story.  

The chairman of the Senate Intelligence Committee warned a small group of well-connected constituents three weeks ago to prepare for dire economic and societal effects of the coronavirus, according to a secret recording obtained by NPR.
The remarks from U.S. Sen. Richard Burr were more stark than any he had delivered in more public forums.
On Feb. 27, when the United States had 15 confirmed cases of COVID-19, President Trump was tamping down fears and suggesting that the virus could be seasonal.
"It's going to disappear. One day, it's like a miracle. It will disappear," the president said then, before adding, "it could get worse before it gets better. It could maybe go away. We'll see what happens."
On that same day, Burr attended a luncheon held at a social club called the Capitol Hill Club. And he delivered a much more alarming message.
"There's one thing that I can tell you about this: It is much more aggressive in its transmission than anything that we have seen in recent history," he said, according to a secret recording of the remarks obtained by NPR. "It is probably more akin to the 1918 pandemic."
Burr did not give a similar warning to the general public in his home state.

Robert Faturechi and Derek Willis at ProPublica:
Soon after he offered public assurances that the government was ready to battle the coronavirus, the powerful chairman of the Senate Intelligence Committee, Richard Burr, sold off a significant percentage of his stocks, unloading between $628,000 and $1.72 million of his holdings on Feb. 13 in 33 separate transactions.
As the head of the intelligence committee, Burr, a North Carolina Republican, has access to the government’s most highly classified information about threats to America’s security. His committee was receiving daily coronavirus briefings around this time, according to a Reuters story.
A week after Burr’s sales, the stock market began a sharp decline and has lost about 30% since.
Lachlan Markay,  William Bredderman, and Sam Brodey at The Daily Beast:
 The Senate’s newest member sold off seven figures’ worth of stock holdings in the days and weeks after a private, all-senators meeting on the novel coronavirus that subsequently hammered U.S. equities.
Sen. Kelly Loeffler (R-GA) reported the first sale of stock jointly owned by her and her husband on Jan. 24, the very day that her committee, the Senate Health Committee, hosted a private, all-senators briefing from administration officials, including the CDC director and Anthony Fauci, the head of the National Institute of Allergy and Infectious Diseases, on the coronavirus. 
“Appreciate today’s briefing from the President’s top health officials on the novel coronavirus outbreak,” she tweeted about the briefing at the time.
That first transaction was a sale of stock in the company Resideo Technologies valued at between $50,001 and $100,000. The company’s stock price has fallen by more than half since then, and the Dow Jones Industrial Average overall has shed approximately 10,000 points, dropping about a third of its value.
...
Loeffler’s office did not respond to a request for comment from The Daily Beast on the transactions and whether they were prompted or informed by information shared at that late January briefing. It’s illegal for members of Congress to trade on non-public information gleaned through their official duties. 
Late Thursday night, she did offer a statement, tweeting: “This is a ridiculous and baseless attack. I do not make investment decisions for my portfolio. Investment decisions are made by multiple third-party advisors without my or my husband’s knowledge or involvement.
“As confirmed in the periodic transaction report to Senate Ethics, I was informed of these purchases and sales on February 16, 2020—three weeks after they were made.”