Trading Stocks Before the World Burns: Burr And Loeffler Are Not The Only Ones

Richard Burr and Loeffler are not the only examples embroiled in controversy for engaging in stock trades ahead of the market’s crash. Other senators including California’s Diane Feinstein and Wisconsin’s Ron Johnson also attracted scrutiny for stock deals made at the same time. 

Coronavirus presents the greatest public health and economic emergency of a generation. But for this very reason, the pandemic has brought people together unlike anything else in recent years.

Politicians have made it a top priority. Ideas that were once unthinkable in the United States, like direct cash payments to all Americans, have now gained bipartisan support. But they have yet to come to an absolute consensus. A recent attempt at an emergency rescue package fell apart due to partisan bickering.

Even worse, some politicians seem disinterested in the pandemic altogether. Recent revelations show that they are more concerned about their personal wealth, having adjusted their stock portfolios in anticipation of the crisis.

Few are particularly surprised that politicians are involved in dubious dealings. It is the type of thing that we have accepted as inevitable. But an outrageous example like this may just be what is needed to spur action. The pandemic has forced us to reevaluate our standards of what is possible. While this is happening, it may be time to fix our broken political system.

Burr and Loeffler are not the only examples. Other senators including California’s Diane Feinstein and Wisconsin’s Ron Johnson also attracted scrutiny for stock deals made at the same time. 

It began when NPR reported on a speech by North Carolina Senator Richard Burr. During a late February luncheon of the Tar Heel Circle, a business group that includes wealthy donors, Burr gave dire warnings about the coronavirus, saying that it is unlike “anything that we have seen in recent history.” Despite this, his public statements at the time mirrored the Trump administration’s attempts to downplay the virus’s threat.

Soon after, ProPublica discovered that Burr had sold between $628,000 and $1.72 million in stocks while he was receiving classified information about the coronavirus as Senate Intelligence Committee chairman.

Meanwhile, the Daily Beast found that a similar series of trades were made by Georgia Senator Kelly Loeffler and her husband, New York Stock Exchange chairman Jeffrey Sprecher.

There is no definitive evidence of wrongdoing on either side, but the incidents have obviously drawn heavy criticism, including calls for the two to be investigated under the 2012 Stop Trading on Congressional Knowledge Act.

Burr and Loeffler are not the only examples. Other senators including California’s Diane Feinstein and Wisconsin’s Ron Johnson also attracted scrutiny for stock deals made at the same time. 

However, analysts like attorney and political correspondent Jeff Blehar believe that there is little evidence that these were inspired by the coronavirus.

In the meantime, Politico has reported another series of trades by House members and Senate aides. In some of the most blatant instances, they sold stock in industries like airlines and cruises before the market crashed, while buying shares in pharmaceutical and biomedical companies. 

While it is likely that many of these trades were based on public knowledge rather than insider information, they show a disturbing tendency on the part of public servants facing a global crisis to put their financial interests first.

The pushback has been fierce. Calls for the resignation of Burr, whose dealings have attracted the most suspicion, have even come from Fox News pundit Tucker Carlson and Peter Schweizer of the far-right Breitbart.

Everyone agrees that this is wrong. The question now is whether they will band together to actually do something about it.

Making Politics Trustworthy

The influence of money in Washington is legendary. It is accepted as a fact of life that politicians will vote for special interests in return for campaign contributions or a cushy private-sector job after retirement.

Selling stocks while denying an oncoming pandemic is a somewhat different issue, but it is all a symptom of a culture where personal interests come before the public good.

For years, there have been calls on the left to get big money out of politics and on the right to drain the swamp. But this rarely translates into actual action. In part, this is because there is a legitimate debate over the best course of action to fight corruption. But mostly, politicians are unwilling to change a system that works so well for them.

But anything can change in the face of public outrage. A crisis like this shows exactly why politicians must put the good of the people first and foremost.

In particular, this incident has drawn attention to Elizabeth Warren’s proposed Anti-Corruption and Public Integrity Act. Among other provisions, it would prevent many federal officials from owning or trading individual stocks.

Ideally, politics should be a realm where the public interest comes first, rather than being a game for the vain and ambitious. Obviously, this goal will never fully be realized. But that should not be taken as an excuse to give up completely. We will never achieve perfection, but we can still inch closer to a better system.