By Al Barbarino

Law360 (May 14, 2020, 3:54 PM EDT) -- U.S. Sen. Richard Burr, R-N.C., will step down as chairman of the Intelligence Committee on Friday as an investigation into his stock trading in the run-up to the COVID-19 pandemic plays out.

The decision comes after two months of scrutiny surrounding the senator unloading stock ahead of the market declines spawned by the pandemic. In comments to reporters, Burr cited the importance of the work of the committee to national security as the reason for stepping aside, adding that he has been cooperating with investigators since the probe was launched.

"This morning, I informed Majority Leader McConnell that I have made the decision to step aside as chairman of the Senate Intelligence Committee until this investigation is resolved," he added in subsequent statement. "The work the Intelligence Committee and its members do is too important to risk hindering in any way. I believe this step is necessary to allow the committee to continue its essential work free of external distractions."

Senate Majority Leader Mitch McConnell issued a statement Thursday also stating that Burr had informed him of his decision to step aside during the "pendency of the investigation," noting that he would do so on Friday.

"We agreed that this decision would be in the best interests of the committee and will be effective at the end of the day tomorrow," McConnell said.

The announcement follows reports from the Los Angeles Times that the FBI had seized Burr's cellphone Wednesday night in connection with the Department of Justice's investigation into Burr's trading activity. The FBI declined to comment Thursday.

Justin Danilewitz, a Saul Ewing Arnstein & Lehr LLP partner, noted that the so-called STOCK Act is clear that members of Congress cannot trade based on nonpublic information. He said direct evidence such as that contained in a cellphone can be a key to proving a case.

"Typically, very strong circumstantial evidence can be telling and informative in court, and it can even be sufficient proof for a conviction, but what you really want as a prosecutor is direct evidence that there was intentional wrongdoing," he said. "Cellphones are often a gold mine for investigators, and there is rarely evidence of intent as good as a text message when it comes to these types of insider trading cases." 

ProPublica and the Center for Responsive Politics first reported in March that Burr had unloaded as much as $1.7 million of his holdings on Feb. 13 across 33 separate transactions, representing a significant portion of his total portfolio.

As public scrutiny intensified regarding the trades from Burr and other U.S. senators who had sold stock in the run-up to the pandemic, attorneys noted in a March Law360 article that regulators would be probing the cases, with CNN revealing late that month that the DOJ had opened an investigation.

Burr also took to Twitter that month in his own defense, stating that he'd relied solely on public information in executing his trades and that he had requested a Senate Ethics Committee review of the matter.

In addition to McConnell, senators on both sides of the aisle showed support today for Burr's decision in comments to reporters.

Among them, Sen. John Cornyn, R-Texas, said he respected Burr's decision, noting that the senator is "entitled to a presumption of innocence" and pointing to the prior Ethics Committee request.

"I know he's asked the Ethics Committee to conduct an investigation as well," Cornyn said. "So, the best I can tell he is trying to do the right thing by the Senate, and I appreciate it."

In brief statements to reporters, Sen. Bob Menendez, D-N.J., also called the move "appropriate," while Sen. Thom Tillis, R-N.C., said the move was in line with past precedent.

--Additional reporting by Andrew Kragie. Editing by Aaron Pelc.

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