What Next: How Much Trouble Is Senator Richard Burr In?
When senators in DC one avoid tough questions from reporters in the halls of the Capitol? They've got a trick. You might have used this one too. They simply pretend to be on a cell phone. Call Rush. By with an era of distraction duck into an elevator but as of last week at least one senator was not able to deploy this trick anymore. Senator Richard Burr planning to participate in cooperate with you can find video of Senator Burr last week. Getting peppered with questions. He's wearing a university of North Carolina. Tar Heel mask and he's got nothing in his hands and nowhere to hide. Have you turned your phone over to? Investigators are the news had just leaked. The FBI had confiscated Burr cellphone. We don't know a lot. We just know that there was a warrant. It was executed and the cell phone was seized. Tim Bac is an investigative reporter. Npr and he has been following how. Burt reached the point where his personal communications were being seized. This all revolves an investigation into alleged insider trading. The allegations go something like this while Senator Burr was telling his constituents that the US response to this novel. Corona virus was under control. He was actually selling more than a million dollars worth of stock and he did it all just before the market crashed. What are the challenges of investigating? Senator like this because imagine proving that there's some kind of insider trading here it would be difficult. I mean the Senate Intelligence Committee the briefings he got about the Krona Virus Maven confidential. So it's hard to know. What did he know? And who can know what he knew and then how that might have changed his mind about where to move his money. That's true but you know there are ways for investigators to get around that issue for example. He's communications with his family. His communications with his broker are not classified. They're not confidential the they can be obtained by investigators and he if he explained his reasoning behind his transactions to anyone. It may be an indication of what happened here. What kind of information? He was basing his transactions on Tim. Mack was one of the first reporters on this story. I don't think that there was an expectation that this would balloon in this way there was no telling at the beginning of this that it would become what is essentially become a criminal investigation today on the show. Tim is going to talk about the secret. Audio recording that he unearthed which helped launched this investigation. And how much trouble? The senator is really in. I'm Mary Harris. You're listening to what next stick with us. This episode is brought to you by Casper. You've probably heard of Casper. From award-winning mattresses. 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The reason Burr is under suspicion for insider trading is because around the same time. He cashed out that stock. He was saying remarkably different things about the krona virus in public and in private in public. He wrote not bad for Fox. News said the trump administration's corona virus response was going smoothly. But if you later when he was privately speaking to donors and lobbyists he warned them to date krona virus threat seriously. And that's where Tim. Mack comes in part of the reason. Why senator bursts stock sales seemed suspicious is the context that we learned about them in. You uncovered this audio. Can we talk about it a little bit? This is audio from back on February. Twenty seventh right. Where's it from and what's happening? I mean I think in order to really understand that audio we have to put ourselves back in the mindset of the world was like in February right and it's hard to kind of think back to pre corona crisis era. But that's what where we were. On February twenty seventh. The stock market had crashed. We hadn't had all these stay at home orders. The first person had not died in the United States from the cord virus but on February twenty. Seventh senator. Burr went to a luncheon with a group of well connected constituents These are people who are business leaders North Carolina Who have lobbying Firms representing them in Washington. Dc. He goes to this luncheon and he says that he's worried that this crisis will be calm probably as bad as possibly as bad as the nineteen eighteen pandemic. One thing I can tell you. This is much more recipe seen in recent. It's probably working to the and he says it in this kind of like offhand way almost like just yeah might happen which it now. We see differently but at the time. I don't think people were really making that comparison as much. No he seemed to really have dug into this question of what the prices would mean for America and he seemed to have some sort of information. About how bad it would be. He warned about schools shutting down. He warned about travel being. Shut down all of these things before. Most of the public had any inkling. The vast majority of public had any inkling that this would happen. Only be sure unity's obviously North Long. Have a transmission rate where they say a close schools for two weeks relate stay home. He warned that military hospitals would need to be set up in order to create beds and provide treatment to people who were sick now. Senator Byrd never came to the Mike and warn the public of his view on this despite his expertise on bio threats and And he's spent many years working on this issue. He never decided to warn the public. Put out a press release. Go to a television. A camera go to any the mics of many reporters who stand in front. I'm in front of him every day. He never warns the public. He warns this private group of individuals. And that's pretty much. Yeah and a few weeks earlier he'd written an op Ed for Fox News where he basically said were. You're in great hands. The trump administration is going to really handle this corona virus. Well right his message was. We've got all the tools necessary to deal with this coming crisis and then as soon as you reported about this meeting other information starts to come out about these stock trades. Tell me about that right. So there's this piece of legislation called the Stock Act in the Stock Act requires lawmakers to periodically disclosed their stock transactions. And what PROPUBLICA did was that. They went through his stock transactions and realized something that I hadn't found. Which is that senator. Burr had in series of very unusual transactions on February thirteenth made thirty three stock transactions and sold up to one point. Seven million dollars worth of stock A single day. And that's remember just a few days after that op ED. You mentioned where he says. Don't worry everything's GonNa be okay so a couple of days after the op-ed he sells off a bunch of stocks and then a few days after that. He makes the speech where he says. Listen this corona virus is going to be bad now. You said he sold off. I think one point. Seven million dollars worth of stock. How big of a deal is that for? Someone like Senator Bar that that that probably is a very significant portion of his net worth senator. Burr is not a wealthy senator. Relatively speaking I mean one point. Seven million dollars is a of money to me. But for a senator And someone of his age his net worth is not particularly high among his colleagues so this would represent a pretty substantial portion of his assets and remember. He has said that he is not going to run for reelection when his term ends in twenty twenty two so he's presumably thinking about retirement and he makes a move here. It appears to secure his future. Npr teamed up with Dartmouth College analyze. Senator bursts transactions. They were looking at birth stock sales on this one day February thirteenth to see how they compared to trades made in the past so typically between two thousand twelve to about twenty eighteen. Twenty nineteen senator. Burr is a very bad stock picker on average if you look at his stocks six months after he purchases a stock. They're down point eight percent relative to other stocks in the same industry and after a year. They're typically down about six percent compared with that same benchmark and we should be clear here. Which is this is senator. Burr buying these stocks himself. Right we don't know about his history but we do know that on February thirteenth senator. Burr has said that he transmitted those decisions to his broker. Personally I don't know about his history but it may be safe to say if he did it in this case he's typically been doing. He is kind of lousy about stock. Picks he doesn't trade in high frequencies he would on average in a quarter. Every quarter would make an average of three point two stock sale but on February thirteenth. He makes more than thirty stock sales on a single day so ten times ten times what he would normally do in a quarter and not only that these stock sales are amazing. Stock picks incredibly well-timed incredibly well chosen because the stocks were sold the underperformed the market by eight percent Right that means that the stocks performed worse than comparable stocks in that same sector between the sale and the end of March six weeks later. I mean the stock market began the crash. Maybe a week later ten days later I was looking through your reporting and I saw that you wrote to the senator spokesperson and said Hey. Do you WanNa talk about these stocks hills and that prison back just L. O. L. Let's crack true that happened. I can't I can't speculate about why that person would do that but that that did happen. So how does the senator defend himself here? How does he explain the SOCK sales? What the defense for an allegation of insider trading is to say. Well No. I didn't use non public information. I only relied on public information information. That you or I or anyone else would have. And so. He's argument is that he made these very well. Timed very precise very successful sales based only on reporting on the coronavirus that he saw on. Cnbc. That's his argument. And we should say that this opened up interest in other lawmakers to and how they were dealing with their own stocks but it seems like burs cases different. And I wonder if you can articulate. Why well there are a number of reasons why his transactions are more suspicious than some of the other names that we've heard put out there like Senator Leffler of Georgia and Senator Feinstein of California. Those are two names of people who either themselves or their spouses made some. Interestingly timed transactions but Senator Burr. I feel remains a focus of investigators for a number of reasons. He had this enormous number of transactions on a single day that volume of transactions was very unusual for him. He sold a lot of stocks of to two hundred and fifty thousand dollars worth of stocks in the hospitality sector. Which as we know has really been hit by the coronavirus crisis. He is private comments. This audio that. You've mentioned that we had from that meeting with well-connected constituents show his state of mind that his personal view contradicted his public his personal and private view show that he was deeply deeply concerned about how bad the corner virus crisis would become and finally he was personally behind the sales. His statement in response to some of this reporting was that he personally directed the sales. Senator Leffler for example has said that she used a third party and didn't personally direct any of her stock sales. So if you look at the tally of those circumstances you realize these circumstances are far more suspicious than the other. The other circumstances that have been pointed to in all of this reporting. It seems strange to me. That senators are even allowed to do this. Because even if you're not the chairman of the Senate Intelligence Committee you are going to have information on a confidential basis important information about the country. So I guess I feel like we're setting these lawmakers up for failure by saying you can trade stocks and serve rather than say. Put your money in a trust or you know. Everything is executed by third party. Why are senators even allowed to do this? It's an interesting question I mean. They've never been prohibited from doing so but there is a groundswell of lawmakers proposing legislation. Now that prohibits personal stock transactions that some lawmakers are now coming around the idea that lawmakers should not be allowed to make these individual stock transactions mutual funds okay. Etf's fine but individual stocks should individual stock trading should be prohibited by members of Congress. So let's talk about where we are now. Senator Burr is no longer the head of the Senate Intelligence Committee for the time being. Can you talk about the significance of that senator? Burr has been a mainstay on the Senate Intelligence Committee. I mean if you talk to Democrats on the Senate Intelligence Committee. You'll you'll find that many of them have a lot of respect for Senator Burr and that he's worked in generally bipartisan. Way when it comes to matters of intelligence in fact since the twenty sixteen And the kind of fallout in two thousand seventeen. He's been working across the aisle on a series of reports on Russian interference in the two thousand sixteen election and afterwards as chairman. Senator Burr has just not been super public Not particularly accessible to the press but I think generally speaking as a chairman a lot of folks have praised for the work is done. I was surprised to see this investigation. Move forward against a Republican senator. And maybe that's just the cynic in me but I'm curious if you can kind of tease out here The decision making because there has been speculation that senator he was among one of the more. Bipartisan senators. You mentioned how he was. You know looking into Russia interference in the election. And I wonder if you think that speculation is fair. I think the answer to the question really depends on whether you think. The Justice Department maintains its independence in the kind of Burr era. Right the attorney general is working as the Attorney General of the United States or as president. Trump's attorney general. So you think that the Justice Department has become hopelessly politicized than you might have a fair question to raise about whether or not Senator. Burr was targeted here. Because you look at the history those close to the trump White House are not fans of Senator Burr. Because if you'll recall part of the Russian investigation senator. Burr helped approve a subpoena of Donald Trump. Junior to bring him before the Committee. That was a surprising move by Senator Burr and really angered a lot of folks in the trump orbit. If you think that the Justice Department maintains a level of independence here you can look at the evidence and see that. There's a fair amount of evidence to suggest wrongdoing it and at least enough evidence to investigate which has been happening. I wonder if you can talk a little bit about the differences you saw in. How different news organizations handled the story because it looked really different if you went over to Fox News versus say NPR. Well I don't think you can Understate the influence of Fox News commentary in Primetime Right. And if you what was really remarkable to me during this period was how quickly Tucker Carlson a very prominent Fox News host turned on Senator Burr and targeted senator in particular on these issues of stock traits and it really kind of set the tone for the conservative response to the scandal which is no one was lining up to defend. Senator Burr at any point and in fact Tucker Carlson explicitly asked for Senator Byrd to resign. Which is a remarkable demand from Fox News host to a Republican a sitting Republican senator? That was a very important moment. I think that set the tone for how focused on the right with responses. And maybe. There's an honest explanation for what he 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. And I guess Senator Burs defense could be well. The insider information I was getting as the Intel Chair. Wasn't the hotel. Industry is going to tank and yet he sold a lot of hospitality stock. You don't need to have specific information that says you know Marriott's GonNa go down it just needs to be material and non-public meaning if you are I as a stock buyer stock seller were to have that information it would be meaningful to you or me. So if he received for example I I'm not saying that he did but for if if he did receive this briefing that outlined the number of deaths the number of cases of chronic virus. That were to come in America. That would have been non public information and it would have been material and if you may transactions based on that information then there is real possibility. He could be charged with insider trading back. Thank you so much for joining me. They thought Tim Mac is. Npr's Washington investigative correspondent. And that's the show. What next is produced by Mary? Wilson Jason De Leon and Daniel Hewitt. We are collecting your stories. About what your new normal looks like. Give us a call. Tell us what it's like where you are. You can reach us at two zero two eight eight eight two five eight eight all right. Thanks for listening. I'm Mary Harris. I'll talk to you tomorrow.