Two senators have come under fire for suspiciously timed stock market trades that came right as the market tumbled in February amid the deepening coronavirus crisis: Republican Sens. Richard Burr of North Carolina and Kelly Loeffler of Georgia.
Both Burr and Loeffler have been accused of insider trading, and scandals such as this can have electoral repercussions, particularly if either is forced to resign. But what are the odds this might actually harm Republican chances of holding on to the Senate in November?
The GOP holds a 53-47 edge over the Democrats in the Senate,1 and while Democrats have a path to a majority, it is a narrow one. Assuming Democratic Sen. Doug Jones is unable to retain his seat in deeply Republican Alabama, Democrats will need to win four seats and also win the vice presidency to take back control. GOP incumbents facing reelection in at least four states — Arizona, Colorado, Maine and North Carolina (the other seat, not Burr’s) — look to be in some danger, so Democrats might be able to thread the needle, especially if they can also win a seat in a state like Iowa or Montana. But it would certainly help Democratic chances if more Republican-held seats came into serious contention, which is where Burr and Loeffler might come in.
Let’s start with Burr. As chairman of the Senate Intelligence Committee, he was privy to daily briefings on the coronavirus before it seriously hit the U.S. On Feb. 13, the senator sold off a huge share of his portfolio just before the stock market crashed. The Justice Department is now investigating Burr, and last Wednesday, the FBI seized a cellphone owned by the senator. On Thursday, Burr announced he was temporarily stepping aside as chairman of the Intelligence Committee during the ongoing investigation.
The question now is, will Burr resign? Burr’s seat isn’t up until 2022, but he could be forced out of office because of the scandal, and if he were, the timing of his departure could definitely affect the 2020 election.
Namely, if Burr resigned before Sept. 4, there would be a special election for the seat this November, which would add another battleground contest to the Senate map. North Carolina’s other seat — held by Republican Sen. Thom Tillis — is already shaping up to be an expensive, hard-fought contest, so another special election in the Tar Heel State could mean double trouble for Republicans. It’s no wonder Tillis has tried to separate himself from the embattled Burr, saying in April that Burr “owes everybody” an explanation for the stock sales. And public opinion is against Burr, too, at least based on polling from a couple of left-leaning firms. In two March surveys of North Carolina from Data for Progress and Public Policy Polling, half of the respondents said Burr should resign while only about a quarter said he shouldn’t.
However, even if some Republicans might want him gone, it seems unlikely Burr would leave office soon enough to necessitate a special election this November, as Republicans really don’t want another swing seat in play this year. But if Burr’s position were to become untenable and he was forced to resign before Sept. 4, a Republican would still be appointed in his place even though North Carolina Gov. Roy Cooper is a Democrat. North Carolina law requires the governor to appoint a replacement from a list of three candidates named by the incumbent party. (Regardless of when a resignation occurred, Cooper would have to appoint a Republican. But if the resignation happened after Sept. 4, the seat wouldn’t be up for election until 2022.)
As for Loeffler, she was already up for election in Georgia this November, so a stock trading scandal could hit her hard. Loeffler has said that third-party account managers handle her portfolio, so she had no input in the trades, but the same day she attended a classified briefing about the coronavirus, she and her husband started selling millions of dollars worth of stock and invested in companies positioned to do well during the pandemic. Loeffler hasn’t said whether the FBI has contacted her, but she provided records of the stock trades to the Justice Department, the Securities and Exchange Commission and the Senate Ethics Committee.
Loeffler already appears to be quite vulnerable in her special election, too, which will be the first time she faces voters since Republican Gov. Brian Kemp appointed her to the Senate in January. A late April GOP internal poll conducted by Cygnal found that only 20 percent of voters had a favorable view of Loeffler compared to 47 percent who had an unfavorable impression. The survey also found her with just 11 percent support, well behind Republican Rep. Doug Collins’s 29 percent. (If that seems especially low, remember the special election is a jungle primary in which all candidates run regardless of party.)
Granted, the Cygnal poll’s sponsor is allied to Collins, but even a survey conducted by Public Opinion Strategies on behalf of a group backing Loeffler ally Kemp found her polling at only 18 percent in the special election, about tied with Collins, who had 19 percent. For his part, Collins has been only too happy to try to connect Burr’s case to Loeffler and attack Loeffler over her own stock dealings.
It’s unclear, though, just how much Loeffler’s problems would harm the GOP’s chances of retaining the seat. That is, just because Loeffler may be in trouble, it doesn’t mean it’ll be easy for Democrats to take over the seat. After all, Georgia still leans toward the GOP and although former state Rep. Stacey Abrams came close to defeating Kemp in 2018, the last time a Democrat won a statewide election was in 2006. At this point, major election handicappers still think Republicans will hold the seat.
That said, with six Republicans and eight Democrats on the ballot in the jungle primary (plus six third-party or independent candidates), it’s also pretty unlikely that one candidate will win an outright majority in November, which means it’s likely headed to a runoff in January 2021 anyway. Based on early polling, Collins may be the most likely Republican to advance to a runoff, and he might be as good a bet — or a better one given Loeffler’s troubles — for Republicans to hold on to the seat, especially as Georgia Democrats have historically struggled in general election runoffs. In fact, with eight Democrats running, there’s even a chance that it will be Collins and Loeffler who advance to the runoff, ensuring continued Republican control of the seat.
It’s worth noting Burr and Loeffler aren’t the only senators who have come under scrutiny for their stock trades. Democratic Sen. Dianne Feinstein of California recently spoke with FBI investigators regarding deals made by her husband, and suspiciously timed stock moves made by Republican Sen. James Inhofe of Oklahoma have also received attention. However, both the California and Oklahoma seats would be very unlikely to switch parties — California being very Democratic, Oklahoma being very Republican — so even if Feinstein or Inhofe got into trouble, their problems would be very unlikely to affect the makeup of the Senate. That’s not necessarily the case for Burr and Loeffler — especially Burr if he were to resign before Sept. 4. Nonetheless, it’s still a longshot that likely won’t alter the Senate election math in 2020, either.