FBI serves warrant on senator in investigation of
stock sales linked to coronavirus
The FBI seized Sen.
Richard Burr’s cellphone as part of Justice Department investigation into stock
trades he made just before the novel coronavirus sent stock prices plunging.
(J. Scott Applewhite / Associated Press)
MAY 13, 2020
6:54 PM
WASHINGTON —
Federal agents seized a cellphone belonging to a prominent Republican
senator on Wednesday night as part of the Justice Department’s investigation
into controversial stock trades he made as the novel coronavirus first struck
the U.S., a law enforcement official said.
Sen. Richard
Burr of North Carolina, the chairman of the Senate Intelligence Committee,
turned over his phone to agents after they served a search warrant on the
lawmaker at his residence in the Washington area, the official said, speaking
on condition of anonymity to discuss a law enforcement action.
The seizure
represents a significant escalation in the investigation into whether Burr
violated a law preventing members of Congress from trading on insider
information they have gleaned from their official work.
To obtain a
search warrant, federal agents and prosecutors must persuade a judge they have
probable cause to believe a crime has been committed. The law enforcement
official said the Justice Department is examining Burr’s communications with
his broker.
Such a warrant
being served on a sitting U.S. senator would require approval from the highest
ranks of the Justice Department and is a step that would not be taken lightly.
Kerri Kupec, a Justice Department spokeswoman, declined to comment.
A second law
enforcement official said FBI agents served a warrant in recent days on Apple
to obtain information from Burr’s iCloud account and said agents used data
obtained from the California-based company as part of the evidence used to
obtain the warrant for the senator’s phone.
Burr sold a
significant percentage of his stock portfolio in 33 different transactions on
Feb. 13, just as his committee was receiving daily coronavirus briefings and a
week before the stock market declined sharply. Much of the stock was invested
in businesses that in subsequent weeks were hit hard by the plunging market.
Burr and other
senators received briefings from U.S. public health officials before the stock
sales.
A spokesperson
for the FBI did not return phone messages seeking comment. A spokeswoman for
Burr declined to comment. Burr has said he does not plan to run for reelection
in 2022.
Burr’s sell-off
— which was publicly disclosed in ranges — amounted to between $628,000 and
$1.72 million. The stock trades were first reported by
ProPublica.
After the sales
became public, Burr said that he would ask the Senate Ethics Committee to
review them.
Burr is not the
only senator who has come under fire for dumping stock as the virus neared the
United States.
In late February
and early March, Sen. Kelly Loeffler (R-Ga.) sold stocks valued at between
$1.25 million and $3.1 million in companies that later dropped significantly,
including ExxonMobil. She also bought shares in Citrix, which makes telework
software.
Loeffler, who
was appointed to her seat to fill a vacancy and faces an election later this
year, said after the sales became public that she and her husband would divest
all individual stocks.
Burr, a longtime
supporter of federal programs responsible for dealing with a pandemic, sits on
two Senate committees that got early briefings on the coronavirus — the
Intelligence Committee and the Senate committee that handles health issues.
The health
committee received a briefing on the virus on Feb. 12, one day before his stock
trades.
The same day
Burr sold his stocks, Burr’s brother-in-law, Gerald Fauth, sold between $97,000
and $280,000 worth of six stocks, according to documents filed with the Office
of Government Ethics. Fauth serves on the National Mediation Board, which
provides mediation for labor disputes in the aviation and rail industries.
Burr has denied
coordinating trading with his brother-in-law.
In 2012,
Congress prohibited lawmakers from acting on intelligence they learn because of
their privileged position, such as briefings with high-level federal officials.
Under the STOCK
Act, lawmakers are required to disclose their stock market activity but are
still allowed to own stock, even in industries they might oversee.
The law passed the
Senate in 2012 in a 96-3 vote. Among the three senators to oppose the bill was
Burr.