WASHINGTON — Sen. Richard M. Burr of North Carolina temporarily stepped down Thursday as chairman of the Senate Intelligence Committee, a day after FBI agents seized his cellphone as part of an investigation into whether he sold hundreds of thousands of dollars’ worth of stocks using nonpublic information about the coronavirus.
The seizure and an accompanying search for his electronic storage accounts, confirmed by an investigator briefed on the case, represented a significant escalation of the inquiry by the Justice Department and the Securities and Exchange Commission. They suggest that Burr, a Republican and one of the most influential members of Congress, may be in serious legal jeopardy.
Given the sensitivity surrounding the decision to obtain a search warrant on a sitting senator, the move was approved at the highest levels of the department, a senior Justice Department official said, meaning that Attorney General William Barr signed off on it. The warrant to obtain Burr’s phone was served to his lawyer, and investigators took Burr’s phone from him at his home, according to the official who, like the investigator, spoke on the condition of anonymity to publicly discuss the case.
Burr has denied he did anything wrong. With the investigation progressing, he said Thursday that he wanted to limit distraction to the Senate and informed Sen. Mitch McConnell, R-Ky., the majority leader, that he would step aside. Burr will remain a member of the committee, however, and continue serving in the Senate.
“This is a distraction to the hard work of the committee, and the members and I think that the security of the country is too important to have a distraction,” Burr told reporters in the Capitol. He declined to discuss the case further but said he was cooperating with authorities.
McConnell, who had yet to pick a temporary successor for Burr as chairman, said that he agreed “this decision would be in the best interests of the committee and will be effective at the end of the day tomorrow.”
Burr sold the stock Feb. 12 before the market cratered and as President Donald Trump and some supporters were downplaying the threat of the virus. At the time, Burr was receiving briefings and involved in senators-only conversations suggesting the country faced a growing health crisis that could hurt the economy.
The Justice Department declined to comment on the warrant, which The Los Angeles Times first reported.
The senator has insisted that he based his trading decisions exclusively on publicly reported information that he read in financial media accounts out of Asia. Burr’s legal adviser, Alice Fisher, said the facts of the case would ultimately “establish that his actions were appropriate.”
It is not illegal for lawmakers to make investment decisions based on public information. But insider trading laws, including the Stock Act that governs Congress, prohibit officials from making decisions based on specific, nonpublic information they receive in the course of their work.
Paul Shumaker, a longtime adviser to Burr, said the senator was adamant that he had done nothing wrong and would not resign. “He has no choice but to fight this. He has to clear his name,” said Shumaker, adding that for Burr to quit would amount to “an admission of guilt” and that would not halt the inquiry.
Federal investigators have also scrutinized stock trades by other senators around the same time, including Sens. James Inhofe, R-Okla.; Kelly Loeffler, R-Ga.; and Dianne Feinstein, D-Calif., according to a person briefed on those cases. All three have said they did nothing wrong.
In April, law enforcement officials asked Feinstein “basic questions” about stock transactions made by her husband during the period in question, her spokesman, Tom Mentzer, said Thursday. He said Feinstein complied and provided documents that showed she had no involvement.
A spokeswoman for Loeffler, Kerry Rom, issued a statement that did not rule out the type of contact from authorities that Feinstein had.
“No search warrant has been served on Sen. Loeffler,” she said. “She has followed both the letter and spirit of the law and will continue to do so.”
But Burr is the primary target of the investigation, and his case is more advanced, according one of the investigators. Unlike other senators under scrutiny, Burr has not denied that he initiated the sales himself or that they were related to concerns about the coronavirus. He has asked the Senate Ethics Committee to investigate.
The scrutiny of Burr stems from his decision to sell 33 stock holdings collectively worth $628,000 to $1.7 million. The sales liquidated a large share of Burr’s portfolio, and they came in the days after a series of briefings on the spreading coronavirus that Burr received both as chairman of the Intelligence Committee and a member of the Senate’s Health, Education, Labor and Pensions Committee.
During the intelligence panel briefing, on Feb. 4, CIA officials sketched out an early picture of the geopolitical effect of an outbreak that was still confined to Asia. Other briefings to the health panel, including one the day before Burr’s stock transactions, featured top government health officials who would later steer the country through the pandemic.
Investigators are likely trying to determine the content of those briefings, particularly any information presented that was not publicly available, but it could be difficult. Much of the information may be sensitive or closely resemble public reporting at the time. And experts say Congress’ so-called speech-or-debate clause could prevent investigators from directly questioning Burr about what he learned in the course of his duties as a senator.
Burr also has a history of warning about the threat from pandemics. He helped write legislation more than a decade ago to assist the United States in better preparing for such events. He heralded that work in an op-ed article in early February saying that the country was “better prepared than ever” to respond to the coronavirus.
Few figures on Capitol Hill have played higher-profile roles in recent years than Burr. A reliable conservative vote, he has nonetheless been the face of and driving force behind a three-year bipartisan intelligence committee investigation into Russia’s interference in the 2016 election and possible ties to the Trump campaign.
His insistence on seeing the investigation through and tough questioning of close associates of the president has piqued the White House at times, and relations between the president and the senator remain chilly.
Some of Burr’s allies in the Senate privately questioned Thursday why the search warrants became public if Burr was cooperating.
“I don’t believe he did anything criminally wrong,” Sen. Lindsey Graham, R-S.C., told reporters. “Maybe he used poor judgment, I guess, but I know Richard, and he is the one guy I can tell you who actually does watch CNBC Hong Kong.”
Burr, whose term ends in 2022, has already said he does not intend to run for reelection. But the specter of North Carolina’s senior senator facing an FBI inquiry could further complicate Republican prospects in what is perhaps the most pivotal state on the electoral map this year.
Democrats in North Carolina renewed their calls for Burr to resign his Senate seat altogether.
“If he has any sense of decency left, Burr will resign immediately, and if they have any regard for the rule of law, Republicans across this state and all over our country will demand the same,” said Wayne Goodwin, chairman of the state Democratic Party.