This morning I woke up with the words ‘Insider Trading’ in my mind. I Googled Insider Trading and Covid-19 and low and behold there were several newspaper articles about this. This journal is about bringing awareness to the level of self interest that purveys United States politics, which is being witnessed by the tragic handling by the U.S. Government in their response to the coronavirus crisis.
Nathan Robinson, the founding editor of Current Affairs and Guardian US columnist reporting the following in March 2020.
There’s something deeply disturbing about seeing someone profit from a disaster. It has come to light that several US senators may have acted on inside information about the coronavirus pandemic, selling stocks in anticipation of a crash, even as they failed to warn the public about the danger posed by the virus.
ProPublica reports that North Carolina Republican Richard Burr, who was receiving daily coronavirus briefings as chairman of the Senate Intelligence Committee, “sold off a significant percentage of his stocks, unloading between $628,000 and $1.72m of his holdings,” a week before the stock market tanked. And while in public he was insisting that the government was capable of handling the virus, to well-connected constituents at the Capitol Hill Club he was warning that the virus was “much more aggressive in its transmission than anything that we have seen in recent history.” Then there was Georgia Republican Kelly Loeffler, who according to the Daily Beast also sold a substantial amount of stock in the leadup to the crash, as well as buying shares in the teleworking company Citrix. Other senators also sold stock around the same time, though the evidence of insider trading is less clear in the other cases.
Elected officials whose first response to a pandemic is to cash in are indeed monstrous. But it’s not especially surprising in the Trump Era, when the pathological pursuit of financial self-interest is widely seen as unobjectionable. Burr and Loeffler were just doing what they learned in Economics 101: rationally maximize your returns, regardless of the consequences for other people. It’s a little surprising to see Shapiro condemning this behavior instead of defending it as an example of the glorious free market at work. After all, you frequently see defenses of price-gouging among free market types, which is no less sociopathic of a behavior during a time of need. It’s strange to see those who are generally fine with those who profit off human misery – like, for example, health insurance companies – get so worked up about insider trading.
The alleged behavior of Burr and Loeffler is indeed despicable, and there is a reasonable discussion to be had about whether senators ought to own stock in the first place. Can we trust people to make laws neutrally if they are significantly financially invested in the outcome of those laws? But we should also make sure not to over-focus on insider trading and corruption as being what’s wrong with our politics. They are one part of what is wrong, to be sure, but more important than self-enrichment is the fact that US senators are allowing people to suffer and die needlessly by failing to push through the measures needed to deal with the coronavirus crisis.
Unethical and selfish behavior becomes especially disgusting in a time of a deadly pandemic, but we must keep our focus on giving people the healthcare and economic relief they will need to get through this. The inadequacy of current measures is a crime in which many elected officials in both parties are complicit, and we should be just as angry at the legislators who kill people through inaction as the few who jumped at the opportunity to make a buck. [1]
The Sydney Morning Herald reported this week from Washington:
Senator Richard Burr has temporarily stepped aside as chairman of the Senate Intelligence Committee after the FBI served a search warrant for his mobile phone as part of an ongoing insider-trading investigation tied to the coronavirus pandemic. Senate Majority Leader Mitch McConnell announced the move, saying he and Burr had agreed that it was in the committee’s best interests.
The search warrant was served on Burr’s lawyers, and FBI agents went to Burr’s home in the Washington area to retrieve the mobile phone, a senior Justice Department official said. The decision to obtain the warrant, which must be authorised by a judge, was approved at the highest levels of the department, the official said. The official could not discuss the ongoing investigation publicly and spoke on the condition of anonymity.
The Justice Department declined to comment. His attorney did not respond to phone and email messages, but said in a statement last month that the law is clear that any senator can participate in stock market trading based on public information “as Senator Burr did”. The attorney, Alice Fisher, said that Burr welcomed a review of the stock sales, “which will establish that his actions were appropriate.”
Senate records show that Burr and his wife sold between roughly $US600,000 and $US1.7 million ($933,000 and $2.6 million) in more than 30 transactions in late January and mid-February, just before the market began to nosedive and government health officials began to sound alarms about the virus. Several of the stocks were in companies that own hotels.
Burr has acknowledged selling the stocks because of the coronavirus but said he relied “solely on public news reports,” specifically CNBC’s daily health and science reporting out of Asia, to make the financial decisions.
Senator Kelly Loeffler, a new senator from Georgia up for re-election this year, sold hundreds of thousands of dollars worth of stock in late January and February, as senators began to get briefings on the virus, according to records. So did fellow Georgia Senator David Perdue, another Republican lawmaker running for re-election, and also Republican Senator James Inhofe of Oklahoma and Democratic Senator Dianne Feinstein of California.
Senators did receive a closed-door briefing on the virus on January 24, which was public knowledge. A separate briefing was held on February 12 by the Senate Health, Education, Labour and Pensions Committee, which Burr is a member of. It’s unclear if he attended either session.
Burr’s six-year term ends in 2023 and he does not plan to run for re-election.
He was first elected to the Senate in 2004 and chaired the Senate Intelligence Committee as the panel conducted its own investigation into Russian election interference in the 2016 presidential election. The committee recently issued a report supporting the intelligence community’s conclusion that Russia had interfered on Trump’s behalf.