Sens. Kelly Loeffler of Georgia and Richard Burr of North Carolina are accused of using their early knowledge of the severity of the coronavirus outbreak to protect their own finances instead of informing the public.
More than 45,000 residents of North Carolina and Georgia have filed for unemployment this week, as the coronavirus pandemic continues to devastate workers. Another 557 people across the two states have been diagnosed with COVID-19, while 13 have died in Georgia.
While Americans across the country look to their national leaders for help, residents of the two Southern states learned on Thursday that their senators may have engaged in insider trading and used their early knowledge of the severity of the coronavirus outbreak to protect their own finances instead of informing the public.
On Jan. 24, Republican Sens. Kelly Loeffler of Georgia and Richard Burr of North Carolina received a private Senate briefing from government scientists about the seriousness of the coronavirus.
“Appreciate today’s briefing from the President’s top health officials on the novel coronavirus outbreak,” Loeffler tweeted at the time.
Starting that very same day, Loeffler sold off between $1.3 million and $3.1 million in stocks in 27 transactions between Jan. 24 and Feb. 14, according to a report from The Daily Beast. Loeffler, the wealthiest member of Congress who is estimated to be worth $500 million, shared ownership of the stocks with her husband, the chairman and CEO of the New York Stock Exchange. The 15 stocks that Loeffler dumped have lost more than a third of their value, on average, since she sold them.
Even after selling her stocks, Loeffler downplayed the severity of the coronavirus crisis, tweeting on Feb. 28 that Democrats, who had been sounding the alarm about the lack of preparedness for the crisis, had actually “intentionally misled the American people on #Coronavirus readiness.” Loeffler insisted the Trump administration was “doing a great job working to keep Americans healthy & safe.”
Sen. Burr also publicly promised that the United States was prepared for the coronavirus, writing in a Feb. 7 op-ed: “No matter the outbreak or threat, Congress and the federal government have been vigilant in identifying gaps in its readiness efforts and improving its response capabilities.”
Six days later, on Feb. 13, Burr sold off a significant portion of his portfolio, dumping between $628,000 and $1.72 million of his stock holdings in 33 separate transactions. Burr’s sell-off, which was first reported by ProPublica, included shares of companies that are particularly vulnerable to the economic damage being caused by the coronavirus. For example, he sold off as much as $150,000 worth of shares of Wyndham Hotels and Resorts, a U.S.-based company that has lost 63% of its value in the past month.
Members of Congress are legally required to disclose their stock transactions, but they are reported in ranges. In the weeks since the two senators dumped their holdings, the stock market has lost about 30% of its value.
In other words, they each saved hundreds of thousands, if not millions, of dollars.
Burr made no purchases on Feb. 13, and the day’s sell-off represented his largest selling day of the past 14 months, according to a ProPublica review of Senate records.
Loeffler, meanwhile, made only two stock purchases during this period, one of which was between $100,000 and $250,000 of stocks in Citrix, a tech company that offers teleworking software. The company makes it easier for employees to work remotely and has actually seen its stock price rise by 5% since Loeffler bought her shares on Feb. 14.
The revelation that Burr and Loeffler unloaded their stocks triggered immediate outrage and accusations of insider trading. Under The STOCK Act of 2012, members of Congress are banned from insider trading, or using private information obtained from their roles as public servants for personal benefit.
In fact, Burr is the only current senator who voted against it, calling the legislation “ludicrous” at the time.
Both Burr and Loeffler have denied they engaged in any wrongdoing. Burr said he relied only on public news reports to guide his decision to sell stocks, but on Friday asked the Senate Ethics Committee to conduct a review of the matter, acknowledging that his sell-off could lead people to make “assumptions.”
Loeffler, meanwhile, called the story a “ridiculous and baseless attack,” adding that the investment decisions were made by “multiple third-party advisors,” and that she wasn’t informed of the transactions until Feb. 16.
While the two senators avoided financial losses, tens of thousands of their constituents have not been so lucky. Nearly 18,000 North Carolinians have filed for unemployment benefits since Tuesday, while in Georgia, more than 27,000 people have filed for unemployment benefits this week, a 400% increase over the most recently reported week.
The economic toll has been absolutely devastating. Kymm McLean, a self-employed hair stylist and make-up artist in North Carolina, has seen her life turned upside down as 90% of her clients have canceled amid the growing coronavirus pandemic.
She was furious, but unsurprised by the report about Burr, calling it “shameless, but expected.”
“I would have expected no less,” McLean said. “In a corrupt capitalist controlled government, there is an unwavering greed that infects those in power. History has proven throughout time that they will seize any opportunity to rob from the poor and give to the rich.”
In the aftermath of Thursday’s news, many of Burr and Loeffler’s constituents took to Twitter to call for their resignations.
Rep. Alexandria Ocasio-Cortez, Democrat of New York, also called for both lawmakers to resign. Similar calls came from across the aisle as well. Fox News Host Tucker Carlson, whose program aired before the Daily Beast’s story on Loeffler was published, called on Burr to resign on Wednesday, saying “There is no greater moral crime than betraying your country in a time of crisis, and that appears to be what happened.”
Republican Sens. David Perdue of Georgia and James Inhofe of Oklahoma and Democrat Dianne Feinstein of California also sold off stocks, but as Daily Beast reporter Lachlan Markey noted, their transactions appear far less suspect than those of their colleagues.
When asked about the reports on Friday, President Trump—who ran on promises of “draining the swamp”—said he didn’t “know too much about what it’s about.”
“I find them all to be very honorable people,” Trump said. “They said they did nothing wrong. I find them, the whole group, very honorable people.”