Congressional members and their aides are barred from making stock trades based on knowledge other than that available to the general public.
Recent transactions, most notably the up to $1.7 million in sales by Sen. Richard Burr, R-N.C., in mid-February, show this is a rule that needs tightening.
In fact, given their access to public and private briefings, and the perspective this provides, members of Congress and their top aides should probably be barred from owning individual stocks at all.
That’s the recommendation of a recent tweet by Preet Bharara, a former U.S. attorney for New York’s Southern District, and it makes sense.
The 33 transactions by Sen. Burr, chairman of the Senate Intelligence Committee, on Feb. 13, are the most troubling, so much so that Burr asked the Senate Ethics Committee to take a look.
According to a filing required of federal lawmakers and their aides, Burr sold between $628,000 and $1.7 million in stocks. Those trades came four weeks after a senators-only briefing on the coronavirus and six days after Burr put his name on a column saying the United States “today is better prepared than ever before to face emerging public health threats, like the coronavirus.”
That those trades came a day after the Dow Jones Industrial Average closed at a high of 29,551.42 and only a week before the start of an unprecedented stock market slide greatly contributes to the American public’s feeling of betrayal.
Burr says he made his trades based on news reports — a claim that deserves a look by both the U.S. Department of Justice and the Securities and Exchange Commission.
Other trades, while perhaps less troubling, also emit more than a whiff of taint.
Rep. Susan Davis, D-Calif., sold thousands of dollars of stock in Alaska Air and Royal Caribbean cruises; an aide told Politico that Davis has a “third party handling her portfolio and does not play a role in the purchase or sale of her stocks.”
A top aide to Senate Majority Leader Mitch McConnell, R-Ky., made a mid-January purchase of stock in a biotechnology company a week after the company said it began work on a coronavirus vaccine; the aide reportedly saw a business report that led to the purchase.
And then there’s Sen. Kelly Loeffler, R-Ga., who sold up to $3.1 million in stocks in 27 transactions from Jan. 24 through mid-February, soon after her appointment to the seat. Like Burr, Loeffler’s sales began soon after senators got a private briefing on the coronavirus. Loeffler said she does not handle her stock transactions and was informed three weeks after they occurred.
While some explanations of recent stock trades by federal lawmakers and their aides are better than others, the whiff of insider trading is deeply troubling for two reasons: first because they are receiving good salaries and excellent benefits paid for by the public as they appear to be profiting on information gained through their taxpayer-funded jobs; and second, and more important, because in this time of crisis, we need to trust our public officials. Now more than ever we need to believe that they’re acting in the public interest, not their own.
Appearances matter. Members of Congress and their aides should halt all stock trades and think about taking themselves out of the market for good for the sake of restoring and maintaining the public’s trust.
— Pittsburgh Post-Gazette