Connect with us

NEWS

Justice Dept. Ends Stock Trade Inquiry Into Richard Burr Without Charges

WASHINGTON — The Justice Department informed Senator Richard M. Burr, Republican of North Carolina, on Tuesday that it would not pursue …

WASHINGTON — The Justice Department informed Senator Richard M. Burr, Republican of North Carolina, on Tuesday that it would not pursue insider trading charges against him, according to his lawyer and another person briefed on the decision, quietly ending a monthslong investigation into his dumping of hundreds of thousands of dollars in stock in the turbulent early days of the coronavirus pandemic.

The decision by the department and the Securities and Exchange Commission effectively cleared a cloud of legal jeopardy that has loomed over Mr. Burr since the sales were first disclosed in March. At the crux of the case was whether Mr. Burr, then the chairman of the Senate Intelligence Committee, had acted based on nonpublic information about the contagion that he received at senators-only briefings.

A handful of other senators drew similar scrutiny for their trades over the same period and were cleared in the spring and summer. Mr. Burr’s case proved far more complicated and included grand jury subpoenas and a search of his electronic storage accounts. At one point, the F.B.I. seized his cellphone — a highly invasive tactic for a sitting member of Congress that required signoff by Attorney General William P. Barr.

Mr. Burr, 65, insisted throughout that he had acted within the law, but preemptively stepped down from his Intelligence Committee post to avoid distractions and adopted a low profile in the Senate. He had already planned to retire when his term ends in 2022.

Mr. Burr’s lawyer, Alice Fisher, declined to immediately comment beyond confirming that case had been closed without charges.

The conclusion of the case also brings to a close a remarkable and painful period for the Senate itself. Criminal investigations into lawmakers crop up from time to time, but rarely have so many been under scrutiny at once.

Though no one was ultimately charged, media accounts of senators’ rush of money-saving stock transactions at a time when many Americans were badly hurting set off a debate in the halls of Congress and the campaign trail about conflicts of interest and the efficacy of lawmakers holding financial stakes in companies affected by their work. For an institution that already suffers dismally low public approval, the saga certainly did not help Congress.

With his name cleared, Mr. Burr is now free to reclaim his intelligence post, should he want it. But he will also likely have the choice to instead take over the top Republican slot on the Senate’s health committee after Senator Lamar Alexander of Tennessee retired.

Either choice could have a cascading effect on other committee assignments and shift the panels’ directions. If Mr. Burr moves to the health committee, it would leave the Senator Marco Rubio of Florida, a conservative with national political ambitions and less of an appetite for bucking his party, as the top Republican on the intelligence committee. If Mr. Burr returns to that post, Senator Rand Paul of Kentucky, whose clashes with government health officials overseeing the pandemic response has alarmed many of his colleagues, would be next in line at the health committee.

Mr. Burr was one of five senators known to have been investigated by the Justice Department and Securities and Exchange Commission for possible insider trading around the pandemic’s onset in the United States. Senators Kelly Loeffler, Republican of Georgia; James Inhofe, Republican of Oklahoma; and Dianne Feinstein, Democrat of California, were all cleared in May. An investigation into Senator David Perdue, Republican of Georgia, expanded to include transactions worth more than $1 million in a financial firm, where he once sat on the board, before it was closed in August.

Mr. Burr’s remained open months longer.

Though he did not contest that he sold much of his portfolio out of concern for the spreading pandemic, he insisted that his trades were based entirely on information reported by financial news outlets in Asia, not special briefings he received as a senator.

Insider trading cases — particularly those involving lawmakers — are notoriously difficult to prove. Lawmakers, like any other citizen, are allowed to make investment decisions based on public information. Under the 2012 Stock Act, they are prohibited from making decisions based on specific, nonpublic information they access as senators.

The challenge for investigators is teasing out public from nonpublic information with enough confidence to prove that a lawmaker like Mr. Burr acted with an unfair advantage over other investors. That is made even more difficult by the Constitution’s speech or debate clause, which gives members of Congress unusual protections from investigators.

In this case, Mr. Burr’s sales came just days after a series of briefings he received as a member of the Senate’s intelligence and health committees in late January and early February focused on the coronavirus threat. At the time, Mr. Trump and members of his party were downplaying the virus threat and, though it has spread widely in Asia, the pandemic had yet to greatly affect American life or its financial markets.

Mr. Burr, who had long trained his eye on public health and warned about the threat of pandemics, clearly took it more seriously. On Feb. 13, he sold 33 stock holdings, worth a collective $628,000 to $1.7 million, a large share of his portfolio.

The timing allowed him to avoid losses other investors incurred when the stock market sharply contracted in February and March. The financial markets have since recovered and are scraping record highs.

There were other costs for Mr. Burr along the way. He stood on the sidelines, for instance, when the Intelligence Committee delivered this summer the final results of its yearslong inquiry into Russian election interference in 2016 and ties to the Trump campaign. He had overseen the politically sensitive investigation from its outset, working closely with the panel’s top Democrat, Senator Mark Warner of Virginia, in the face of sharp objections by President Trump , winning respect from colleagues in both parties.

Click to comment

Leave a Reply

Your email address will not be published.

17 − sixteen =