The brother-in-law of U.S. Sen. Richard Burr sold a significant share of stocks on the same day — Feb. 13 — that Burr and his wife conducted 33 sell transactions.
According to a federal Public Financial Disclosure Act filing, Gerald Fauth sold six stocks valued at between $97,006 and $280,000.
U.S. Senate financial-disclosure documents show Burr and his wife, Brooke, sold between $628,000 and $1.72 million of their stock holdings on Feb. 13. The publication Roll Call listed Richard Burr’s net worth at $1.7 million as of 2018.
All of the sales were made a week before the stock market began its sharp coronavirus-related decline Feb. 20 and after Burr attended a joint Jan. 24 Senate Health and Foreign Relations committee briefing on coronavirus that included the director of the Centers of Disease Control and Prevention and Dr. Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases.
CNN reported on March 29 that Burr is facing potential federal investigations by the U.S. Justice Department and the Securities and Exchange Commission into the stock sales.
On March 19, ProPublica was the first to report that the Burrs sold a large portion of their stock portfolio, including shares of three corporations in the hotel and hospitality industry that cratered during the virus’ initial impact on the stock market.
ProPublica was the first to report May 6 on Fauth’s stock sells of Feb. 13.
Fauth’s sells involved:
- Mondelez International Inc., a confectionery, food, holding and beverage company, at between $50,001 and $100,000;
- Altria Group Inc., parent of tobacco manufacturer Philip Morris USA, at between $15,001 and $50,000;
- Chevron Corp., between $15,001 and $50,000.
- Royal Dutch Shell (B stock), between $15,001 and $50,000.
- BP (British Petroleum) PLC, between $1,001 and $15,000; and
- Williams-Sonoma Inc., between $1,001 and $15,000.
There was no overlap of the stocks sold Feb. 13 by the Burrs and Fauth. The Burrs bought stock in Mondelez in 2013 and sold it in 2015.
On Feb. 13, the Winston-Salem Republican senator sold eight stocks valued at between $1,001 and $15,000, and 10 stocks valued at between $15,001 and $50,000.
Brooke Burr sold eight stocks valued at between $15,001 and $50,000, and seven stocks valued at between $50,001 and $100,000.
'Closely followed CNBC'
On March 20, Burr spokeswoman Caitlin Carroll released a statement from Burr about the stock sale.
“I relied solely on public news reports to guide my decision regarding the sale of stocks on Feb. 13,” Burr wrote. “Specifically, I closely followed CNBC’s daily health and science reporting out of its Asia bureaus at the time.
“Understanding the assumption many could make in hindsight however, I spoke this morning with the chairman of the Senate Ethics Committee and asked him to open a complete review of the matter with full transparency.”
On May 6, attorney Alice Fisher of the Washington law firm Latham & Watkins LLP said in a statement that “Senator Burr participated in the stock market based on public information, and he did not coordinate his decision to trade on Feb. 13 with Mr. Fauth.”
ProPublica said Fisher did not respond when asked whether Burr discussed anything he learned as a senator with Fauth or any other relatives.
President Donald Trump appointed Fauth in 2017 to the three-person National Mediation Board, a federal agency that facilitates labor-management relations within the nation’s railroad and airline industries.
ProPublica reported that Federal Election Commission records show that Burr’s leadership PAC, Next Century Fund, has paid $120,348 since 2002 to his sister-in-law, Mary Fauth, Gerald’s wife, who serves as treasurer.
The PAC has paid $104,850 in rent and utilities over the same period to 116 S. Royal St. Partners, in which Gerald Fauth is a partner.
Warned private group
According to a secret recording obtained by NPR, on Feb. 27, Burr told members of the well-connected private Tar Heel Circle that the novel coronavirus would have dire effects on the U.S. economy and population. He likened it to the 1918 flu pandemic that killed millions of people.
Burr warned the private group on the same day that Trump publicly downplayed the virus.
Burr’s comments carry significant weight in part because he is author of the federal Pandemic All-Hazards Preparedness Act of 2006.
The Feb. 13 stock sales by Burr and his wife occurred six days after Burr co-wrote an op-ed piece saying America had tools in place to combat COVID-19.
Bipartisan criticism
Burr is facing intense bipartisan criticism for the stock trades, the private warning and the sale of a townhouse in 2017 to a high-profile pharmaceutical lobbyist.
U.S. Rep. Matt Gaetz, R-Fla., has been a fierce critic of Burr, particularly during Burr’s time in co-leading the Senate Intelligence Committee’s investigation into Russia’s involvement in influencing the 2016 presidential election. Gaetz also is one of Trump’s most vocal supporters in Congress.
Gaetz has launched social-media salvos at Burr, including demanding his resignation as head of the committee.
Calls for Burr to resign as senator were supported by half of North Carolinians, according to a Public Policy Polling poll released March 24.
Among Democrats, 63% think Burr should resign compared with 15% who said he should stay, while 38% of Republicans said stay and 31% resign, and 53% of independents/unaffiliated said resign and 18% said stay.
“As an unprecedented crisis loomed, a leading Republican senator used privileged information to protect his family’s wealth instead of his constituents,” said Austin Cook, communications director for N.C. Democratic Party.
U.S. Sen. Thom Tillis, R-N.C., has said Burr owes North Carolinians an explanation and that the chairmanship is up to Republican Senate leaders.
“Voters and the media deserve to hear from Republicans, like Thom Tillis, Mitch McConnell and (N.C. GOP Chairman Michael) Whatley if this kind of behavior is truly acceptable to them,” Cook said.
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