The House and Senate Members
Personally Profiting from War
Lenny Broytman / Issue Chronicle
WASHINGTON (October 7, 2024) — This page writes frequently about Congress’s unofficial but all-too-real mandate of making money for its friends in the defense sector. While this is absolutely true, it is also crucial to remember that these lawmakers also use the weapons industry to enrich themselves.
According to a comprehensive breakdown compiled by Sludge, more than 50 members of Congress hold as much as $10.9 million in defense contractor stocks. The publication calculated the figure by using a variety of financial disclosures currently required by law. As the article notes, these securities are held either by the lawmakers, their spouses or children, or via a qualified blind trust.
The halls of American power ooze with all kinds of unsavory activity, but this is undoubtedly one of the system’s most egregious forms of corruption. Members of Congress who sit on influential bodies that control the flow of federal dollars to some of the nation’s largest weapons manufacturers are directly invested in these same companies, to the tune of hundreds of thousands, and sometimes millions of dollars.
“In the Senate, several lawmakers with investments in defense contractors sit on committees that set and approve defense spending: three are on the Committee on Armed Services (SASC), and five are members of the Committee on Appropriations, including two who sit on the key Defense Appropriations subcommittee. This body has jurisdiction over drafting legislation to allocate funds to government agencies including the Department of Defense, as well as supplemental spending bills,” writes Sludge.
“On the House side, at least five lawmakers with household stakes in defense contractors sit on the House Armed Services Committee (HASC), which has jurisdiction over defense policy, headlined by the mammoth annual NDAA. Three of the representatives sit on the Defense Appropriations subcommittee.”
The figures these individuals have authorized in recent years are staggering. When President Biden – rumored to still be serving as the sitting commander-in-chief – first entered office, he inherited a military budget totaling $740.5 billion. During this past year, Biden signed a National Defense Authorization Act (NDAA) totaling $886 billion. Five months later, he authorized an additional $67 billion via a supplemental security appropriations bill for Israel, Ukraine, and Taiwan. For some context on this mindboggling $953 billion sum, China – the owner of the world’s second-largest military budget – recently announced that it was increasing its budget by 7.2% to $232 billion.
The explosion in spending has been a windfall for the country’s top weapons companies and investors have reaped the rewards.
As the article points out, RTX Corporation (formerly known as Raytheon) and Northrop Grumman have both seen the price of their stocks increase by 71% during Biden’s time in the White House. General Dynamics has witnessed a 91% rise during the same time period.
Investors have been delighted and some of these shareholders are the very lawmakers who were responsible for the contract allocation that made it all possible in the first place. A quick scan of the data provided by Sludge reveals all of the House and Senate members who’ve invested in these three companies, along with a number of other well-known firms, such as Lockheed Martin, Boeing, L3Harris, Leidos, Booz Allen Hamilton, and Honeywell.
The latter – which manufactures sensors and guiding devices that are being used by the IDF in its year-long bombing of Gaza – is reportedly the stock most widely held by members of Congress.
Financial disclosures suggest that Congressman Michael McCaul, the hawkish chair of the House Committee on Foreign Affairs, holds up to $2.6 million in just three defense-related firms. Quite a few others hold more than $100,000 in weapons stocks.
The scripted answer lawmakers on both sides of the aisle have spent years repeating is that they have no control over the securities in question. Their stock portfolios are all – quite miraculously, given how closely they track with the members’ sponsored bills and committee activity – managed by brokers and/or spouses, without their knowledge or influence. It’s hard to imagine that there’s a soul on earth who’d believe that to be true, but it’s important to remember that none of this is against the law.
Various legislation to prohibit this kind of activity has slogged through Congress for years, but asking corrupt government officials to police themselves has yet to yield results.
