US senators defend selling shares before markets' coronavirus crash

WASHINGTON • Two US Republican senators have defended themselves against heavy criticism, including calls that they resign, for selling large amounts of stock before the coronavirus-induced market meltdown and after closed-door briefings on the outbreak.

Senate Intelligence Committee chairman Richard Burr sold up to US$1.7 million (S$2.5 million) worth of stock on Feb 13 in 33 separate transactions after offering public assurances that the government was ready to battle the virus. His financial filings were first reported by ProPublica.

Senator Kelly Loeffler sold millions of dollars in shares in the weeks after lawmakers were first briefed on the virus, according to public filings.

The Daily Beast first reported that she sold up to US$3.1 million (S$4.5 million) in stocks in 27 transactions from Jan 24 till mid-February. It said the sales began after she attended a private coronavirus briefing held for senators.

Media reports on Mr Burr and Ms Loeffler, who have denied any wrongdoing, prompted calls that they leave office.

The controversy came as Republican and Democratic senators worked with President Donald Trump's administration to try to hash out a massive Bill to boost the economy as it reels from the effects of the coronavirus pandemic.

After negotiating all day, they told reporters late on Friday that they had not yet reached a deal, but would resume their talks yesterday.

Mr Burr had made public comments in line with early assurances by Mr Trump, a fellow Republican, that the United States could easily deal with the outbreak.

Mr Trump's tone has since become much more serious.

But the senator, whose committee position means that he receives regular classified briefings on threats to the country, told a private Washington luncheon two weeks after the stock sales that the coronavirus was much more aggressive "than anything that we have seen in recent history," according to a recording obtained by National Public Radio.

The comments predated Wall Street's series of avalanches.

Value of stock Senate Intelligence Committee chairman Richard Burr sold last month in 33 transactions.

Estimated value of what Senator Kelly Loeffler offloaded.

But Mr Burr said he relied only on public news reports to guide his decision on the Feb 13 stock sales. "Understanding the assumption many could make in hindsight, however, I spoke...with the chairman of the Senate Ethics Committee and asked him to open a complete review of the matter with full transparency," Mr Burr said on Friday.

Senate Ethics Committee chairman James Lankford declined comment on the matter.

Ms Loeffler said she was informed of the transactions three weeks after they occurred and that she was not involved in investment decisions for her portfolio. "This is a ridiculous and baseless attack," she wrote on Twitter.

She is vying to keep her seat in a special election in November.

Mr Trump said the two senators should "possibly" be investigated. "They said they did nothing wrong. I find them, the whole group, very honourable people," he told reporters.

Critics across the political spectrum have called on Mr Burr and Ms Loeffler to consider resigning or at least explain the sales.

"Senator Burr owes North Carolinians an explanation," fellow North Carolinian and Republican Senator Thom Tillis wrote on Twitter. "His self-referral to the Ethics Committee for their review is appropriate; there needs to be a professional and bipartisan inquiry into this matter."

Democratic Representative Alexandria Ocasio-Cortez tweeted: "It is stomach-churning that the first thoughts these Senators had to a dire & classified #COVID briefing was how to profit off this crisis."

Conservative Fox News commentator Tucker Carlson told viewers last Thursday: "Maybe there is an honest explanation for what (Mr Burr) did.

"If there is, he should share it with the rest of us immediately. Otherwise, he must resign from the Senate and face prosecution for insider trading."

REUTERS