Wednesday, May 27, 2020

Sen. Richard Burr and The Shroud of Inside Information on Capitol Hill

Senator Richard Burr-NC
There is a persistent urban legend that elected officials are somehow privy to “inside information” that makes them all “very rich.”

If that is the case, I have never worked for one, or knew anyone, who did. I certainly never figured out how to use any inside information I was privy to as chief of staff to a US senator and a US congressman to get filthy rich quickly.

There are three problems with this urban legend. First, it is illegal for anyone in government, business or on Wall Street to use inside information not generally available to the public to enrich themselves and any trade over $1,000 is reported to congressional ethics. Second, much of what appears to be obvious inside information to the public later turns out to be incorrect. Finally, the private market seems to be more efficient at uncovering information — and reacting to it — than politicians, staffers and bureaucrats.

If you had to report publicly every stock trade you made over $1,000 (buy or sell), would you take any chances on it being illegal or unethical?

Only one member of Congress has been sent to prison for using inside information to buy or sell stocks, former Congressman Chris Collins of New York in January 2020. If any elected official, including Sen. Burr, is found to have abused any confidential information for stock trades, they deserve the same fate as Mr. Collins.

No one yet knows all the details behind Burr’s stock sales on February 13 of this year. Anyone who knows Richard or has worked with him over the years knows he keeps his own counsel and marches to the beat of his own drummer — many times to the exasperation of his staff and campaign consultants.

If he had asked for my advice when first elected in 1994, which he didn’t, I would have suggested that he place his stock portfolio in a blind trust to eliminate any appearance of impropriety since so much of politics is perception anyway.

Maybe he didn’t have a sufficiently large enough portfolio at age 38 to justify placing it in a blind trust then.

He does have a history of being very skittish about financial markets which makes me wish I had been as cautious as he was before the market crashed in 2008 and 2020.

In October 2008, Senator Burr told his wife to take money out of the ATM over the weekend in anticipation of the financial collapse that was about to unfold. He was not the chairman of the Senate Intelligence Committee at the time nor was he on any relevant commerce or financial services committee that had any oversight of the stock market.

He had a bad feeling about what was going on. The pending collapse was all over cable news on a second-by-breathless-second basis during what should be called “Black October.”

This year, Burr said in a Feb. 7 Fox News op-ed that “Americans are rightfully concerned about the coronavirus” and that the situation “is alarming.” That was a week before he initiated the stock trades that have drawn scrutiny.

Any one of us could have done the same thing based on the daily news we all were watching.  Perhaps Sen. Burr should become a financial manager when he retires and help people avoid having their portfolios sliced in half when something bad is about to happen.

Some partisan media and opponents speculated that Sen. Burr sold his DC house in a sweet deal in 2017. The Senate Ethics Committee reviewed all relevant documents before the sale and determined it was done in line with all Senate rules and ethical guidelines.

One ethics committee lawyer told me after calling their office almost weekly in 1985: “Let me give you some guidelines; if you think something may be unethical, it usually is. Don’t ask us to approve something unethical or illegal, because we won’t”.

Senate Ethics would have declined his house sale if it was not done properly in an arms-length transaction.

I have known Richard Burr for 28 years. He is one of the least pretentious and preening of any U.S. senator who has ever served. He drove himself to meetings around the state in a 1998 Honda Accord without an entourage in a black Escalade following him around. He is not fabulously wealthy like many other senators either through inheritance or marriage, or due to business or real estate success.

In short, Burr is like most of the rest of us. Except he chose to run for public office and serve his state and country to the best of his ability for the past 26 years. I hope his stock trades were based on his past practices, public information and the information he shared publicly.

(first published in North State Journal 5/27/20)
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