Four U.S. Senators sold off millions of dollars in stocks just before the market dropped in February amid fears about the coronavirus pandemic, according to Senate records and reports.
Senate Intelligence Committee Chairman Richard Burr, R-N.C. and Sens. Kelly Loeffler, R-Ga., James Inhofe, R-Okla., and Dianne Feinstein, D-Calif., all sold major holdings as early as January as senators began to get non-public information about the growing coronavirus outbreak.
Burr is now asking for an ethics review of his selling off as much as $1.7 million in stocks just before the market dropped in February amid coronavirus fears.
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In a statement Friday morning, Burr said he had asked for the Senate Ethics Committee to investigate the matter, “understanding the assumption many could make in hindsight.”
Burr said he relied “solely on public news reports,” specifically CNBC's daily health and science reporting out of its Asia bureaus, to make the financial decisions.
There is no indication that Burr, who is not running for reelection when his terms ends in 2022, had inside information as he sold the stocks. The intelligence panel he leads did not have any briefings on the pandemic the week when most of the stocks were sold, according to a person familiar with the matter. The person declined to be identified to discuss confidential committee activity.
Senators did receive a closed-door briefing on the virus on Jan. 24, which was public knowledge. A separate briefing was held Feb. 12 by the Senate Health, Education, Labor and Pensions Committee, which Burr is a member of. It's unclear if he attended either session.
Loeffler, Inhofe and Feinstein are also on the Intelligence Committee and, according to Senate aides, received a number of briefings and intelligence reports in January and February, NBC News reports. The intelligence remains classified, and it's not clear what warnings the senators were given and exactly when.
The stock sales were first reported by ProPublica and The Center for Responsive Politics. Most of them came on Feb. 13, just before Burr made a speech in Washington, D.C., in which he predicted severe consequences from the virus, including closed schools and cutbacks in company travel, according to audio obtained by National Public Radio and released Thursday.
Burr told the small North Carolina State Society audience that the virus was “much more aggressive in its transmission than anything that we have seen in recent history” and “probably more akin to the 1918 pandemic."
Burr’s remarks were much more dire than remarks he had made publicly, and came as President Donald Trump was still downplaying the severity of the virus.
In a tweet on Thursday, Burr said that Americans were already being warned about the effects of the virus when he made the speech to the North Carolina State Society.
“The message I shared with my constituents is the one public health officials urged all of us to heed as coronavirus spread increased,” Burr wrote. “Be prepared.”
Burr's North Carolina colleague, Republican Sen. Thom Tillis, tweeted Friday that Burr “owes North Carolinians an explanation" and that his referral to the ethics panel is appropriate. Tillis is up for re-election this year.
Senate Majority Leader Mitch McConnell did not answer questions about Burr's stock sales when asked in the Capitol on Thursday.
Burr was not the only lawmaker to sell off stocks just before the steep decline spurred by he global pandemic. Georgia Sen. Kelly Loeffler, a new senator who is up for reelection this year, sold off hundreds of thousands of dollars worth of stock in late January, as senators began to get briefings on the virus, also according to Senate records.
In the weeks that followed, Loeffler urged constituents to have faith in the Trump administration's efforts to prepare the nation. She also sits on the Senate HELP panel.
“@realDonaldTrump & his administration are doing a great job working to keep Americans healthy & safe,” Loeffler tweeted Feb. 27.
The Daily Beast first reported that Loeffler dropped the stock in late January. The senator is married to Jeffrey Sprecher, the chairman and CEO of Intercontinental Exchange, which owns the New York Stock Exchange.
In a tweet early Friday morning, Loeffler said the report was a “ridiculous & baseless attack."
“Investment decisions are made by multiple third-party advisors without my or my husband's knowledge or involvement,” she tweeted. She said she was informed of the decisions three weeks after they were made.
Loeffler and her husband offloaded anywhere between about $1.1 million and $2.8 million in stock in January and February from their extensive investment portfolio. They dumped between $250,000 and $500,000 in stock in Exxon, as well as between $100,000 and $250,000 holdings on Feb. 5 in Honeywell International, a multinational aerospace conglomerate. The also sold off stocks in the retail store chain Ross, auto parts seller Autozone, manufacturer Catepillar Inc. and Delta Airlines.
But they plunged between $315,000 and $650,000 into real estate investment firm Blackstone, tech company Oracle and Citrix Systems – a company that develops workplace and telecommuting software.
California Sen. Dianne Feinstein, a Democrat, also reported that her husband sold off between $1.1 million and $5.5 million worth of stock in Allogene Therapeutics more than a month ago. The San Francisco-based biotech company researches and develops cures for cancer.
Feinstein, who also sits on the intelligence panel, said in a statement that she didn't attend the Jan. 24 briefing and had no input in her husband's decisions.
“This company is unrelated to any work on the coronavirus and the sale was unrelated to the situation,” she said.
Oklahoma Sen. James Inhofe also sold of anywhere between roughly $395,000 and $850,000 worth of stock he held in multiple companies in late January and early February, according to a disclosure. One of his biggest sell offs, valued somewhere between $100,000 and $200,000, was of stock he held in Brookfield Asset Management, a company that invests in real estate, renewable energy and global commerce.
Inhofe tweeted that he has no involvement in his investment decisions after asking his financial adviser to move him out of stocks and into mutual funds "to avoid any appearance of controversy." He said he made that move in December 2018, shortly after becoming chairman of the Senate Armed Services Committee.
“My advisor has been doing so faithfully since that time and I am not aware of or consulted about any transactions,” Inhofe wrote.
Asked if the senators should be investigated, Trump said at a daily coronavirus briefing that “I don't know because I'd have to look at it.” He said of the senators: “I find them to be honorable people.”
Also Friday, the group Citizens for Responsibility and Ethics in Washington filed a Senate ethics complaint against Burr and Loeffler.
“It appears that in a time of crisis, these senators chose instead to serve themselves, violating the public trust and abdicating their duty,” said Noah Bookbinder, the director of that group. "They must be immediately investigated.”
A spokeswoman for Loeffler told CNBC the senator “does not make investment decisions for her portfolio. Investment decisions are made by multiple third-party advisors without her or her husband’s knowledge or involvement.”
The New York Times reports Feinstein and her husband sold $1.5 million to $6 million worth of stock in a California-based biotech company. A spokesman for Feinstein told the Times her assets are in a blind trust and Feinstein didn't played a role in the decision to sell the stock.
Disclosure reports show Inhofe sold major holdings valued at as much as $400,000 on Jan. 27, according to the Times.
Burr sent out the tweets before reports of his stock sales. A spokesperson for the senator said in a statement that Burr "has been deeply concerned by the steep and sudden toll this pandemic is taking on our economy" and supports congressional efforts to help the economy. The spokesperson declined to be identified in order to share the senator’s thinking.
Rep. Alexandria Ocasio-Cortez, D-N.Y., tweeted Thursday night calling on Burr to resign amid the allegations. She wrote, "As Intel chairman, @SenatorBurr got private briefings about Coronavirus weeks ago. Burr knew how bad it would be. He told the truth to his wealthy donors, while assuring the public that we were fine."
Rep. Joaquin Castro, D-Texas, said Burr should resign as chairman of the committee.