A terrible crisis can reveal many things, and such is the case with the coronavirus pandemic. It’s already laid bare how many of the rules that govern American life are pointless and arbitrary, that it’s not pragmatism but the bulging eyes of a true believer that fuels the Democrats’ economic conservatism, and the true, pitiful state of the US health care “system,” demolished by decades of budget-cutting. Now it’s revealed just how venal those who run the country really are.
Washington, DC has been rocked in the last day by revelations of possible coronavirus-related insider trading by members of Congress. Though several senators have been accused, it’s two in particular that the charges have focused on.
First, there’s Georgia’s Kelly Loeffler, spouse to the chairman of the New York Stock Exchange and, with an estimated net worth of half a billion dollars, quite possibly the richest member of Congress. That particular fact had already made Loeffler a walking, talking conflict of interest, plonked onto a committee where she would be in charge of regulating her own husband’s business enterprises.
On January 24, Loeffler sat in on a private, senators-only briefing about the virus, which included the director of the Centers for Disease Control and Prevention and National Institute of Allergy and Infectious Diseases director Dr Anthony Fauci. Over the next three weeks, until February 14, Loeffler and her husband sold off between $1.275 to $3.1 million of stocks, while buying stocks in Citrix, a company that makes software for remote work. Bear in mind that by February 12, a booming Dow Jones Industrial Average had hit a record high, with no signs of slowing down.
Loeffler is defending herself by saying investment decisions are made by third-party advisers without her or her husband’s involvement, and that disclosure forms show she wasn’t told about any of this until February 16 this year. Let’s say that’s true.
What’s less explicable is the fact that, for weeks after, Loeffler was publicly assuring Americans about the government’s readiness to tackle the virus, and claiming that the economy was strong enough to handle the crisis. She even put out a February 28 statement with her counterpart David Perdue, saying: “My number one priority is to protect the people of Georgia and keep them informed.” If the January 24 briefing didn’t tip her off, are we really supposed to believe Loeffler, a successful businesswoman, found out her advisers had sold millions in stocks and blindly assumed everything was hunky-dory?
But even this is nothing compared to North Carolina’s Richard Burr, who has justifiably been thrust into the eye of the hurricane over congressional stock sell-offs. As ProPublica reported, Burr not only attended the same January 24 briefing as Loeffler, but, as chair of the Senate Intelligence Committee, was getting daily briefings about the virus’s spread. A day after the Dow Jones Average hit its all-time high, Burr made his largest stock sell-off in fourteen months, selling up to $1.72 million in shares, including as much as $150,000 invested in several hotel chains whose value tanked not long after. Burr didn’t buy any shares, either. As icing on the cake, Burr was one of only three senators to vote against the 2012 STOCK Act, which banned insider trading by members of Congress.
What makes Burr’s case particularly outrageous is that, unlike with Loeffler, we have evidence he was lying to the public about the threat of the virus. Despite authoring a February 7 op-ed assuring people the government was well-prepared to prevent a pandemic, twenty days later, in a meeting with his real constituents — a group of wealthy local industrialists who had donated more than $100,000 to his last campaign — Burr gave a very different message: that the virus was “much more aggressive in its transmission than anything that we have seen in recent history”; that “you may have to alter your travel” and that of their employees; that there would be school closures; that the military would be tasked with grappling with the health crisis.
Though other senators have been accused of similar wrongdoing, as the Daily Beast’s Lachlan Markay reported, these are not in the same league. They were either selling before the coronavirus briefing or sold it after the public was well aware of the scale of the crisis. But these cases alone expose some uncomfortable realities.
One is the way that today’s historic wealth inequality has manifested itself in this crisis. Why is it that Burr was giving false assurances to the public while telling his state’s business leaders the harsh truth about the virus? The simple answer is because, as a pair of professors determined six years ago, the United States has become a society where political leaders listen to and enact the wishes of the rich and generous, and systematically ignore those of the poor and middle class. Burr was straight with those few donors at a luncheon because it is they, not the voting public, whose opinions truly matter to members of Congress. One can’t help but wonder what other nuggets of honesty are being offered by the nation’s politicians behind similarly closed doors.
Secondly, why is it that sitting members of Congress are allowed to buy and sell millions in stocks at all, or even sit on powerful committees that may or may not impact their partners’ business dealings? On the one hand, it points to the need for stricter rules around conflicts of interest, including simply barring congresspeople and their spouses from gallivanting through the stock market as they help run the country.
On the other, it points to something much deeper: just as the Democratic Party requires its candidates to be able to raise at least $250,000 from just the contacts in their phones, the political process is closed off to anyone who isn’t already outrageously wealthy, or at least runs in circles that are. And a system like that will inherently create its own conflicts of interest, stocks or no stocks.