The U.S. Department of Justice has made public less-redacted court records that provide new information about its closed insider-trading investigation of Sen. Richard Burr (R-N.C.), shedding significantly more light on the senator’s stock trades around the start of the COVID-19 pandemic, the government’s rationale for searching his phone and how officials navigated an investigation into a sitting member of Congress.
The latest filings, which the Justice Department made public on Labor Day in response to an order of the federal district court in Washington, D.C., reveal much more than what the government previously disclosed in heavily blacked out court filings released in June — filings the government originally attempted to keep secret entirely. They are the result of a lengthy legal battle Reporters Committee attorneys waged on behalf of the Los Angeles Times to help the public understand the grounds for which the government sought — and obtained — a search warrant for Burr’s phone in May 2020. That battle started last February, when the LA Times moved to unseal search warrant materials related to the investigation after the government closed its inquiry without filing any charges.
“We’re pleased to see that these less-redacted filings provide the public with additional insight into the government’s investigation,” Katie Townsend, deputy executive director and legal director for the Reporters Committee for Freedom of the Press, told the Los Angeles Times. “While some redactions remain, the public now has a much clearer picture of the government’s basis for executing a warrant for Sen. Burr’s cellphone.”
Several news organizations, including the LA Times, CNBC, Politico and ProPublica, have used the newly filed search warrant materials to report stories highlighting information about the Burr investigation that was previously hidden from the public. Here are some of the key takeaways journalists gleaned from the records:
- In February 2020, before most Americans understood the threat posed by COVID-19, Burr sold a majority of his equity holdings. The sale came days before the stock market crashed and resulted in Burr, then chairman of the Senate Intelligence Committee, avoiding an estimated $87,000 in losses and earning profits of more than $164,000, according to the affidavit filed by the government in support of its warrant application.
- Using three-quarters of the holdings in an account Burr held jointly with his wife, the senator bought nearly $1.2 million in the Federated U.S. Treasury Cash Reserves Fund on Feb. 12, 2020, the same day the Dow Jones closed at its highest level ever. As the government’s affidavit notes, “investors often purchase U.S. Treasury funds to hedge against a potential market downturn.”
- From April to January 2020, Burr exchanged text messages with a person whose name remains redacted in the court filings, but who may have been the senator’s source for nonpublic information, CNBC reported. Burr and the individual “exchanged approximately 32 text messages, nearly all of which concerned, in one way or another, the COVID-19 pandemic,” according to the government’s affidavit.
- Burr’s brother-in-law, Gerald Fauth, who is chairperson of the National Mediation Board, sold roughly $160,000 in stock on Feb. 13, 2020, after receiving a phone call from the senator. As ProPublica reported, those facts appear to contradict previous claims made by a lawyer for Burr denying that the two men coordinated with each other.
- Burr’s flurry of stock trades during the early stages of the pandemic led investigators to believe he may have violated the STOCK Act of 2012, which prohibits lawmakers from trading on insider information. As the government’s affidavit states, “I believe that probable cause exists that Senator Burr used material, non-public information regarding the impact that COVID-19 would have on the economy, and that he gained that information by virtue of his position as a Member of Congress.”
- The FBI took measures to avoid violating the Speech or Debate Clause of the U.S. Constitution, which protects members of Congress from lawsuits over legislative activities. The government had originally attempted to redact the protocols it follows when seizing devices that may contain privileged materials from members of Congress.
Long legal battle ends in win for transparency
Journalists were able to report this previously undisclosed information because the LA Times, represented by Reporters Committee attorneys, spent roughly a year and a half challenging the government’s efforts to keep the search warrant materials completely sealed — including successfully appealing a district court ruling that would have allowed it to do so.
The LA Times initially sought to make the records public last February, a month after the government closed its investigation without filing charges. Reporters Committee attorneys argued in a motion filed with the U.S. District Court for the District of Columbia that the press and public have a constitutional and common law right to access the records. They emphasized that public access to the materials was especially important in this case because of the government’s unusual decision to seek — and a federal court’s unusual decision to approve — a search warrant for a sitting senator’s cell phone.
In May 2021, however, Chief Judge Beryl A. Howell denied the newspaper’s application to unseal the court records, holding that the public’s First Amendment and common law right of access to the records were overcome because the Justice Department had never officially acknowledged the existence of its investigation.
“That struck us as obviously wrong because everyone knew that the Department of Justice had investigated Senator Burr,” said Reporters Committee Staff Attorney Grayson Clary, who litigated the case with Townsend and other RCFP attorneys. Clary noted that the senator himself had talked openly about the investigation with the news media. “And to adopt a light-switch rule that investigative materials can never be unsealed if the government doesn’t want to acknowledge their existence would have really eviscerated the right of access to warrant materials generally.”
The LA Times appealed the decision to the U.S. Court of Appeals for the District of Columbia Circuit. In reversing the district court’s decision, the appeals court held that Chief Judge Howell failed to properly weigh the public’s interest in accessing the records against the government’s interest in keeping the documents secret. Additionally, by the time the appeals court ruled in March, more information about the government’s investigation had been made public, making it even harder for officials to deny that they had ever investigated the senator.
The ruling by the D.C. Circuit kicked the matter back down to the district court, where attorneys from both parties traded briefs arguing over the extent to which the search warrant materials should be redacted. In June, the Justice Department released heavily redacted records that made it nearly impossible to glean any new information about the Burr investigation. For example, the government blacked out almost the entire section of the materials that explained why investigators believed the senator may have committed a crime.
Reporters Committee attorneys pushed back, emphasizing that the core rationale for guaranteeing access to warrant materials is to allow the public to understand the legal and factual basis for a search.
A couple of months later, Chief Judge Howell agreed. Finding the government’s redactions too extensive, she ordered the Justice Department to make public much of the material it initially attempted to black out from the records, citing the powerful public interest in transparency. The government ultimately released the more lightly redacted records on Sept. 5.
Clary says the outcome of this case is important for a couple of key reasons.
“On the law, it was important to affirm that the public does have a presumptive right of access to warrant materials, so people can judge for themselves whether a search is justified, and that that right does not turn on whether the government wants to acknowledge any particular fact that appears in the records,” he said. “And then on the facts, this was an exceptionally high-profile investigation that raised important political and policy questions.”
For one thing, Clary says, the case sparked public debate about whether members of Congress should be banned from trading stocks entirely. The search also prompted discussion of whether Burr was retaliated against for his role in the Russia investigation, as some reports speculated, or perhaps treated more favorably because he was a member of Congress; as The New York Times noted, Burr’s was one of several “politically fraught cases” shelved in the final months of an outgoing administration.
“At the end of the day, whether the government’s basis for investigating Burr was strong or flimsy is a judgment the public is entitled to make for itself based on the facts on the ground,” Clary said, “and these materials give them a long overdue opportunity to make that call.”
Read the search warrant materials: The first document below shows the heavily redacted search warrant materials made public by the Justice Department in June. The second document shows the much less-redacted version filed by the Justice Department in September.