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Four senators were accused of insider trading, three are in the clear

When the FBI effectively says,"Four senators faced serious allegations, and three have nothing to worry about," it focuses attention on the other one.
Image: Senator Richard Burr
Sen. Richard Burr, R-N.C., talks with reporters in the Capitol on Jan. 30, 2020.Tom Williams / CQ-Roll Call, Inc via Getty Images file

A couple of months ago, with Wall Street's major indexes tanking in response to the coronavirus crisis, four senators faced accusations of insider trading. The FBI began scrutinizing the lawmakers' investments soon after.

Yesterday, the Wall Street Journal reported that three of the four appear to be in the clear -- but one isn't.

The Justice Department is closing investigations into three U.S. senators for stocks trades made shortly before the coronavirus market turmoil, but is continuing a related investigation into GOP Sen. Richard Burr, according to people familiar with the matter. Prosecutors on Tuesday alerted defense attorneys for Republicans Kelly Loeffler of Georgia and James Inhofe of Oklahoma as well as Democrat Dianne Feinstein of California that they are closing investigations into their trading, the people said.

NBC News had a related report last night.

Even as the initial reporting came to light in March, there appeared to be qualitative differences between the allegations against Inhofe and Feinstein, whose trades seemed rather benign, and those against Burr, who faced questions that lacked easy answers.

With this in mind, yesterday's reporting doesn't come as too big of a surprise. It's especially welcome news for appointed Sen. Kelly Loeffler (R), who's facing a tough race in Georgia this year, and who appears to have been adversely affected by the stock controversy.

But these latest developments reinforce just how much trouble Richard Burr appears to be facing. When federal law enforcement sources say, in effect, "Four senators faced serious allegations, and three have nothing to worry about," it necessarily focuses attention on the senator who does have something to worry about.

For those who may need a refresher, the first sign of trouble came to light a couple of months ago. NPR obtained a secret recording of remarks Burr, at the time the chairman of the Senate Intelligence Committee, made on Feb. 27 in which he issued a dire warning about the coronavirus threat. At least at first, the North Carolina Republican was pressed to explain why he didn't offer similar warnings at the time to the public at large.

But as regular readers may recall, the story quickly evolved into a very different kind of controversy. In March, the public learned that around the time of Burr's private warnings to well-connected constituents, he also sold off some of his stock investments. Among the investments the senator sold off were shares of hotel stocks -- which, not surprisingly, were heavily affected by the pandemic.

Two months later, a senior law enforcement official confirmed to NBC News that the FBI obtained Burr's cellphone "pursuant to a search warrant, as part of an investigation of possible insider trading."

Earlier this month, Burr stepped aside as chair of the Senate Intelligence Committee.

Yesterday's Wall Street Journal report added, "Investigators have obtained evidence that shows Mr. Burr was talking to people with specific insight about the threats posed by Covid-19 whose thinking wasn't available to the public, according to people familiar with the investigation. Prosecutors are now examining whether the wide latitude granted to lawmakers under the speech and debate clause of the U.S. Constitution would limit their ability to win any insider-trading trial against Mr. Burr, the people said."

In terms of the political implications, Burr had already announced plans to retire from Congress in 2022. The more salient question is whether the senator's career will be brought to a premature end. There have been several calls for the North Carolinian's resignation -- including some blistering editorials from the Charlotte Observer -- and those calls are unlikely to go away in light of the latest reporting.