Banning lawmakers from owning stocks would stymie war profiteering
Yesterday, a bipartisan group of lawmakers sent a letter to the chairs of the Committee on House Administration urging them to advance legislation banning members of Congress from directly owning or trading stocks while in office.
The letter, sent by 19 lawmakers ranging from Mark Pocan (D-WI) to Matt Gaetz (R-FL) outlined three key provisions: preventing family members and children from owning stock, banning exceptions for stock owned prior to entering office, and backing up any legislation with effective enforcement.
Congressional stock trading restrictions would disproportionately impact the national security space; A Sludge 2021 analysis of financial holdings found that “The maximum value of the investments held by federal lawmakers in the ‘Big Five’ contractors — Lockheed Martin, Raytheon, Boeing, Northrop Grumman, and General Dynamics — is over $2.6 million, making up nearly 39% of the total stock holdings identified.”
Several members of Congress snapped up new shares of defense company stock just before the invasion of Ukraine. Marjorie Taylor Greene (R-GA) bought shares of Lockheed Martin the day before the invasion, while John Rutherford (R-FL) secured valuable Raytheon stock the day of the invasion itself. Between December 1, 2021, and April 13, 2022, the stock price of Lockheed Martin skyrocketed by 42.8 percent while Raytheon increased by over 24 percent, both well out-pacing the S&P 500 which actually decreased in the same time period.
Some of those lawmakers even have an outsized role in creating national security policy itself. A recent Business Insider analysis found that 15 members of the House and Senate Armed Services Committee Congress own stock in defense giants Raytheon and Lockheed Martin.
Another analysis found that four members of the House Foreign Affairs Committee, which oversees arms control, had at least four members invested in defense companies. One member of the Committee, Gerry Connolly (D-VA), alone owned $498,000 worth of stock of Leidos — a military contractor that merged with Lockheed Martin in 2016 — as of last year. Leidos’ stock jumped over 27 percent from mid-February to early March.
The letter joins a chorus of mounting pressure to take action on Congressional stock trading. In an interview with Business Insider, Committee spokesperson Peter Whippy said that “at least 20 bills have been introduced that address some of these issues.” It concludes by writing:
“Americans across the political spectrum support banning members of Congress from trading stocks. If we seek to write off their concerns with a toothless gimmick, they will see through it and continue to mistrust their elected officials.”
If lawmakers continue to profit off of war through their stocks in defense companies, Americans will continue to lose trust in Congress to look out for their interests. There is some dispute about whether Dwight Eisenhower originally intended to use the phrase “Military Industrial Congressional Complex” or not. There can’t be any dispute today, however, to Congress’ culpability in perpetuating the self-licking ice cream cone to their own benefit. With growing pressure from the public, it’s now their role to fix it and block one avenue of Congressional war profiteering.