Congressional Insider Trading: FBI Investigates Senators Burr and Feinstein
Last week the Federal Bureau of Investigations (FBI) seized the cellphone of Senator Richard Burr (R-NC) and questioned Senator Dianne Feinstein (D-CA) in connection with stock sell offs prior to the stock market sell off resulting from the COVID-19 pandemic. Both Senator Burr and Senator Feinstein had access to Congressional briefings on the severity of COVID-19 prior to that information becoming public. It is alleged that this information led the Senators to sell their stocks saving them thousands in losses that were about to occur.
Senator Burr has temporarily stepped down as the chair of the Senate Intelligence Committee as a result of FBI investigation. While it is still not known whether this is an incident of insider trading, in violation of the STOCK Act, it optics are not good for either Senator Burr or Senator Feinstein. Regardless of guilt or innocence it is a good sign that the FBI is investigating allegations of STOCK Act violations. Congress is composed of the representatives of the people. By holding a position in Congress, Senators and Representatives should not be using their positions for private financial gain.
Our Founders never intended for there to be career politicians. The Congress was to be made up of individuals from the private sector doing a, "tour of duty," in the Congress. It was supposed to be a civic duty, one where you completed a term or two and then returned to the private sector. In today's career politic, there is ample opportunity for corruption and private financial gain. The main goal of most politicians is simply to be reelected. The reelection rate for Congress is between 80% - 90%. With the Congressional approval rating hovering around 30%, its difficult to understand the reelection rate, but, in any case, the average time spent in Congress is around 10 years.
There are currently 14 members of Congress who have served longer than 37 years. A full military career, with full retirement only requires 20 years of service. This is so far from the intentions of our Founding. The longer Congressional members stay in Washington, the more distant they become from the realities of private life. Instead of taking positions on politically sensitive topics, they pass bills turning over the decisions to Executive Branch bureaucrats, who then legislate through regulation. The members of Congress get wrapped up in campaign fund raising, book deals, television appearances, and money making. After all, the base salary of Congressional members is only $174,000 a year. Which means those 14 members who have served more than 37 years have each accrued at least $6.438 million in tax payer funded salary.
Senator Burr has a net worth of ~$3.1 million and Senator Feinstein has a net worth of ~$58.5 million. If anyone could afford to take a loss in the stock market, it is certainly those two. If they did use Congressional briefings to avoid losses in the stock market, I hope that they do not escape punishment. Congressional members are our representatives in Washington working on our behalf, to use private data to make market moves is a criminal abuse of power.
At the very least, we should look up how long our Representatives and Senators have been in office and think hard about how long is too long. Senator Burr has been in Congress since 1994 and Senator Feinstein has been in Congress since 1992. Is it time to recycle some Congressional members?
