By: Laura Bassett
3/21/2020
With a new world order shaped by the novel coronavirus pandemic, many of us are stuck inside our homes trying not to go insane from lack of human interaction, while helplessly waiting for a deadly disease to potentially ravage ourselves, our loved ones, and our livelihoods. People who have lost their jobs can’t even hug their older parents for comfort right now, lest they risk infection as a potential asymptomatic carrier; restaurants are shut down; grocery store shelves are empty. And now we’ve just learned that a couple senators who knew all of this was going to happen weeks before we did preemptively sold massive parts of their stock portfolio and then deliberately kept the rest of us in the dark.
The Americans that didn’t receive Senate briefings on the coronavirus are doing very badly financially. Small businesses are shutting down. A whopping 70,000 Americans applied for unemployment benefits last week due to coronavirus-related layoffs—the highest number since September 2017. And stocks fell into the red, once again, on Friday after New York governor Andrew Cuomo announced on his daily press briefing that the state’s workforce, except for essential personnel, must stay at home. But Republican senators Richard Burr of North Carolina and Kelly Loeffler of Georgia are sitting on fresh piles of money, having sold off six and seven figures worth of stocks, respectively, after the Senate received briefings on the approaching pandemic and right before those stocks started to tumble.
On January 24, the day of the Senate Health Committee’s coronavirus briefing, Loeffler, who is the wealthiest member of Congress with an estimated $500 million net worth, even bought some new stocks in teleworking software—one of the only industries, conveniently, that has seen a bump from the crisis as everyone is being forced to work and socialize remotely. (A few other senators, including Democrat Diane Feinstein, sold stocks around the same time, but those transactions appear less suspicious, as Daily Beast reporter Lachlan Markay details in this thread.)
Insider trading in Congress is not a new phenomenon. Several members have been accused of the practice even since 2012 when President Barack Obama signed the Stop Trading On Congressional Knowledge (STOCK) Act, which banned it. (Burr, incidentally, voted against that legislation.) In 2018, senator Jim Inhofe, Chairman of the Senate Armed Services Committee, raised eyebrows when he bought tens of thousands of dollars of stock in Raytheon, a massive defense contractor, right after successfully lobbying the Trump administration to raise military spending. He used the same dubious defense at the time that Burr and Loeffler are using now, which is that a third-party advisor was managing his investments and so he hadn’t made the purchases himself. It’s difficult to prove otherwise, without tracking a member’s every move, text, and phone call, which is why they almost always get away with it.
There’s something far more insidious, though, about lawmakers using a deadly viral outbreak for self-gain. Trump bailed out the hotel industry as a current hotel owner and Jared Kushner’s brother’s health technology company is getting in the testing kit game. And senators are hoarding vital information about the pandemic that could really benefit the public at large and using it to game the stock market. Perhaps it took this level of cravenness to lay bare the reality that it’s not enough to ban insider trading; politicians should have no skin in the game at all. New York representative Alexandria Ocasio-Cortez was right when she tweeted Friday that members of Congress “should not be allowed to own individual stock. We are here to serve the public, not to profiteer. It’s shocking that it’s even been allowed up to this point.”
For some public servants, there’s almost an incentive to keep this information from the public until their finances are safe: Burr and Loeffler were able to act before the markets tumbled. Loeffler then deliberately hid what she knew to be the seriousness of the outbreak, tweeting as recently as February 28 that “Democrats have dangerously and intentionally misled the American people on #Coronavirus readiness.” Burr wrote a sunny opinion piece for Fox News saying the United States was “better prepared than ever before” to confront the pandemic, just days before selling his own stocks and warning some of his friends privately about what was really going to happen. He told a North Carolina social club something more ominous than his public declarations: that the novel coronavirus was akin to the 1918 flu pandemic that infected a quarter of the world’s population. Burr and Loeffler deliberately misled the public—and stayed quiet while Trump did so—while dumping massive amounts of stock.
Congress is generally not inclined to impose new rules on itself, but it’s time for both chambers to take up the HUMBLE Act, introduced by Minnesota congresswoman Angie Craig last summer, which would ban individual stock ownership for members. And in the meantime, Loeffler and Burr should be investigated and indicted. Nearly 250 Americans have already died from the coronavirus as of Friday afternoon, and the future looks much worse. Some of these deaths and the impending battering of American hospitals could have been preventable with cohesive messaging and bolder action from public health officials, as South Korea has demonstrated. What Burr and Loeffler did is an abject betrayal of the American people during a dire calamity, when we are most desperately in need of honest, transparent, and selfless leadership.