'Obvious Conflict of Interest': Report Reveals 50+ US
Lawmakers Hold Military Stocks
"It's abjectly terrifying that the personal benefit of
any member of Congress is factored into decisions about
how to wield and fund the largest military in the
world," said one critic.
BRETT WILKINS
Sep 12, 2024
5
At least 50 U.S. lawmakers or members of their
households are financially invested in companies that
make military weapons and equipment—even as these firms
"receive hundreds of billions of dollars annually from
congressionally-crafted Pentagon appropriations
legislation," a report published Thursday revealed.
Sludge's David Moore analyzed 2023 financial disclosures
and stock trades disclosed in other reports and found
that "the total value of the federal lawmakers' defense
contractors stock holdings could be as much as $10.9
million."
https://x.com/DarrigoMelanie/status/1834215544020426760/
photo/1
According to the report:
The spouse of Sen. Susan Collins (R-Maine), the ranking
member of the Defense Appropriations subcommittee, holds
between $15,000 and $50,000 worth of shares in each of
Boeing and RTX, as well as holdings in two other defense
manufacturers. Sen. Jerry Moran (R-Kansas), another
Defense Appropriations subcommittee member, holds up to
$50,000 in the stock of Boeing, which received nearly
$33 billion in defense contracts last year. On the
Democratic side of the aisle, Sen. John Hickenlooper
(Colo.) holds up to a quarter of a million dollars'
worth of stock in RTX...
The most widely held defense contractor stock among
senators and representatives is Honeywell, an American
company that makes sensors and guiding devices that are
being used by the Israeli military in its airstrikes in
Gaza. The second most commonly held defense stock by
Congress is RTX, formerly known as Raytheon, the company
that makes missiles for Israel's Iron Dome, among other
weapons systems.
All 13 senators whose households disclosed military
stock holdings voted for the most recent National
Defense Authorization Act, which, as Common Dreams
reported, allocated a record $886.3 billion for the U.S.
military while many lawmakers' constituents struggled to
meet their basic needs.
"It is an obvious conflict of interest when a member of
Congress owns significant stock investments in a company
and then votes to award the same company lucrative
federal contracts," Craig Holman, government affairs
lobbyist at the consumer advocacy group Public Citizen,
told Sludge.
"Whether or not the official action is taken for actual
self-enrichment purposes is beside the point. There is
at least an appearance of self-enrichment and that
appearance is just as damaging to the integrity of
Congress," Holman added. "This type of conflict of
interest is already banned for executive branch
officials and so should be for Congress as well. The
ETHICS Act would justly avoid that conflict of interest
by prohibiting members of Congress and their spouses
from owning stock investments altogether."
Holman was referring to the Ending Trading and Holdings
In Congressional Stocks (ETHICS) Act, introduced earlier
this year by Sens. Jeff Merkley (D-Ore.), Jon Ossoff (D-
Ga.), Gary Peters (D-Mich.), and Josh Hawley (R-Mo.).
In the House of Representatives—where the 2024 NDAA
passed 310-118, with the approval of over two dozen
members who own shares in military companies—House
Foreign Affairs Committee Chair Michael McCaul's (R-
Texas) household owns up to $2.6 million in General
Electric, Oshkosh Corporation, and Woodward shares. Rep.
Dave Joyce (R-Ohio), who sits on the Defense
Appropriations subcommittee, owns as much as $100,000
worth of Boeing and General Electric stock.
Other House lawmakers with potential conflicts of
interest include Rep. Gerry Connolly (D-Va.), a member
of the Foreign Affairs Committee, who owns Leidos shares
worth as much as $248,000; Rep. Debbie Dingell (D-
Mich.), who owns up to $100,000 worth of RTX stock; and
Rep. Patrick Fallon (R-Texas), a member of the Armed
Services Committee who holds Boeing stock worth between
$100,000 and $250,000.
"Every American should take a long, hard look at these
holdings to conceptualize the scope of Congress'
entanglement with defense contractors," Public Citizen
People Over Pentagon advocate Savannah Wooten told
Sludge. "It's abjectly terrifying that the personal
benefit of any member of Congress is factored into
decisions about how to wield and fund the largest
military in the world."
"Requiring elected officials to divest from the
military-industrial complex before stepping into public
service would create a safer and more secure world from
the outset," she added.
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https://www.commondreams.org/views/2022/09/18/meet-
members-congress-who-traded-defense-stocks-while-making-
national-security
Though all of the lawmakers in a recent analysis deny
any impropriety, the capacity for competing interests is
clear.
NICK CLEVELAND-STOUT
Sep 18, 2022
Responsible Statecraft
0
The New York Times reported this week that 97 members of
Congress "bought or sold stocks, bonds, or other
financial assets that intersected with their
congressional work or reported similar transactions by
their spouse or a dependent child" between 2019 and
2021. With more than 3,700 such trades in those three
years alone, the investigation reveals potential
conflicts of interest in nearly every area of
policymaking.
At least 25 members sat on committees that shape
national security policy while simultaneously trading
financial assets in companies that could create
competing interests with their work, such as defense
stock.
Defense policy is no different. At least 25 members sat
on committees that shape national security policy while
simultaneously trading financial assets in companies
that could create competing interests with their work,
such as defense stock. With a near-even party split,
Democrats and Republicans may have found a rare instance
of common ground.
The majority of these members sat on the House and
Senate Armed Services Committees--the committees
responsible for the budget and oversight of the
Department of Defense.
The list includes the former chair of the Senate Armed
Services Committee, James Inhofe (R-Okla.), who bought
and sold shares of technology companies as they fought
over a $10 billion cloud computing contract with the
Pentagon, which eventually went to Microsoft. When the
Pentagon later decided to cancel the contract, House
Armed Services Committee member Rep. Pat Fallon (R-
Texas) sold up to $250,000 worth of Microsoft stock two
weeks before it was publically announced. Fallon served
on the subcommittee which oversaw the deal, though a
spokesperson said at the time that he had "absolutely no
prior knowledge the Pentagon intended to cancel" the
contract.
It also includes Rep. Ro Khanna (D-Calif.), who reported
more trades than any other member of Congress. Though
they were "made by trusts in the name of his wife and
young children," these trades spanned all of the top
five weapons contractors--Lockheed Martin, Raytheon,
Boeing, General Dynamics, Northrop Grumman--which could
conflict with his role as a member of the House Armed
Services Committee. Khanna has been an opponent of
overspending on the Pentagon, an indication that there
is not always a straight line between stock ownership
and votes on the budget. But that is decidedly not the
case with many other members who cash in on defense
stocks while wielding power in favor of bigger defense
spending.
Members of the Foreign Affairs, Homeland Security,
Intelligence, and Appropriations committees also
reported trades that could constitute a conflict of
interest.
John Rutherford (R-Fla.), for instance, traded Lockheed
Martin, Microsoft, and BAE Systems stock while sitting
on the House Appropriations subcommittee responsible for
determining the Department of Homeland Security's
funding. All three of those companies have been awarded
contracts with the Department of Homeland Security.
Rutherford then bought Raytheon stock the day that
Russia invaded Ukraine, a company that has also been
awarded contracts by the Department of Homeland
Security.
The New York Times analysis defines a potential conflict
of interest fairly narrowly, only focusing on stock
trades in companies relevant to committee assignments.
Given the daunting task of assembling such a
comprehensive list, it is also limited to that three-
year span. As a result, it doesn't include instances
like Earl Blumenauer (D-Ore.) picking up Raytheon stock
the day of Russia's invasion of Ukraine, or Marjorie
Taylor Greene (R-Ga.) buying Lockheed Martin stock the
day before. By the Times' own admission, "the analysis
is surely an undercount."
Though all of these lawmakers deny any impropriety, the
capacity for competing interests is clear; Congress
continues to approve defense budgets beyond what even
the Pentagon even asks for, more than half of which goes
to private contractors such as Lockheed Martin and
Raytheon, which could in turn privately benefit members
of Congress invested in those stocks.
This could create a perverse incentive structure when
taking into account that when global tensions rise,
defense stocks tend to follow suit. War is often good
for defense companies' bottom line; Jon Schwartz noted
in the Intercept last year that "defense stocks
outperformed the stock market overall by 58 percent
during the Afghanistan War." Some members of the defense
industry even acknowledge this connection, as Raytheon
CEO Greg Hayes did during an earnings call earlier this
year:
"We are seeing, I would say, opportunities for
international sales. We just have to look to last week
where we saw the drone attack in the UAE, which have
attacked some of their other facilities. And of course,
the tensions in Eastern Europe, the tensions in the
South China Sea, all of those things are putting
pressure on some of the defense spending over there. So
I fully expect we're going to see some benefit from it."
Pressure is mounting for Congress to seriously consider
self-regulation of stock trading. Seventy percent of
Americans support banning lawmakers from trading stocks,
including a majority of both Democratic and Republican
voters. To date, at least six different bills have been
proposed to limit the ability of members of Congress to
trade stock.
Despite the popularity of these measures, self-
regulation is always a tall order. Senator Tommy
Tuberville (R-Ala.) went on record saying that limiting
lawmakers' ability to trade stocks would be "ridiculous"
and that "it would really cut back on the amount of
people that would want to come up here and serve."
Tuberville himself traded stock of major defense
contractors such as Honeywell and General Dynamics while
sitting on the Senate Armed Services Committee.
Confidence in Congress sits in the single digits, as
overinvestment in the Pentagon has come at the
underinvestment in healthcare, education, and addressing
the climate crisis. Even if lawmakers defend their
trades as routine, the goal should be to eliminate both
the appearance and reality of conflict in setting
national security priorities.
Our work is licensed under Creative Commons (CC BY-NC-ND
3.0). Feel free to republish and share widely.
BRETT WILKINSBrett Wilkins is a staff writer for Common
Dreams.Full Bio >
Arms TradeBoeingGeneral ElectricHoneywellJeff
MerkleyJohn HickenlooperMilitary-Industrial
ComplexNdaaPublic CitizenRtxSusan CollinsU.S. Congress
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