Last spring, a handful of U.S. senators faced awkward questions about their private investments and alleged efforts to profit off the Covid-19 pandemic, though most of the allegations petered out under scrutiny. There was, however, one notable exception.
Republican Sen. Richard Burr of North Carolina actually faced FBI scrutiny following some well-timed stock sales. As it turns out, more than a year later, the GOP senator's troubles aren't over. ProPublica reported yesterday:
After Sen. Richard Burr of North Carolina dumped more than $1.6 million in stocks in February 2020 a week before the coronavirus market crash, he called his brother-in-law, according to a new Securities and Exchange Commission filing. They talked for 50 seconds. Burr, according to the SEC, had material nonpublic information regarding the incoming economic impact of coronavirus. The very next minute, Burr's brother-in-law, Gerald Fauth, called his broker.
For those who may need a refresher on the controversy, let's review how we arrived at this point.
The first sign of trouble came to light early last year. 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 to some well-connected North Carolinians. At least at first, the 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, he also sold off most 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." Not surprisingly, the Republican, who'd already announced that he would not seek re-election in 2022, felt the need to step aside as chair of the Senate Intelligence Committee.
Burr did, however, receive some welcome news in January: On Donald Trump's last full day as president, the senator said the Justice Department had informed him that he would not be prosecuted, following a months-long insider-trading investigation.
And while that seemed to leave Burr in the clear, we now know better: The Securities and Exchange Commission is reportedly moving forward with an investigation of its own.
Indeed, ProPublica's report added, "In its filings, the SEC also alleges, for the first time, that Burr had material nonpublic information about the economic impact of the coming coronavirus crisis, based on his role at the time as chairman of the intelligence committee, as a member of the health committee and through former staffers who were directing key aspects of the government response to the virus."
We know all of this because the SEC is trying to force Fauth — the one who called his broker the literal next minute after a brief call with his powerful brother-in-law — to comply with a subpoena.
Burr has denied any wrongdoing, though there are a handful of lingering questions in need of answers:
- Was it really an amazing coincidence that the then-chairman of the Senate Intelligence Committee and his brother-in-law sold off investments shortly before a market crash?
- Why did Trump's Justice Department, on the Republican's last day in office, conclude that the GOP senator shouldn't be charged?
- If Burr is forced to resign before the end of his term, what will happen to his seat?
On this last question, it's entirely possible, of course, that the SEC probe will amount to nothing, and Burr will quietly enjoy his final year on Capitol Hill. But if the scandal intensifies and the senator is forced to end his term prematurely — a step the editorial board of the Charlotte Observer has already encouraged him to take — things will get even more interesting.
In theory, in the event of a possible Senate vacancy, one might expect North Carolina's Democratic governor, Roy Cooper, to fill the hypothetical vacancy with a member of his own party, slightly expanding the Democratic majority in the chamber.
But that won't happen. Even if Burr were to step down — and there's no reason to think such a development is likely — under a 2018 law approved by North Carolina Republican legislators, the executive committee of the state GOP would provide the governor with a list of three choices, from which Cooper would choose one.
In other words, Democrats wondering whether a possible Burr resignation might shift the balance a bit on Capitol Hill should lower their expectations.