At least 50 members of Congress or other members of their households hold stock in defense contractors, companies that receive hundreds of billions of dollars annually from congressionally-crafted Pentagon appropriations legislation.
The total value of the federal lawmakers’ defense contractors stock holdings could be as much as $10.9 million, according to a Sludge analysis of 2023 financial disclosures and stock trades disclosed in subsequent periodic transaction reports.
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.
Defense stocks are defined in this analysis as those of the top 100 defense companies identified by Defense News. They include so-called “pure play” defense contractors like Lockheed Martin and General Dynamics, as well as companies like Boeing and General Electric that have large defense contracts but also engage substantially in other areas of business. The stocks are owned by the members of Congress, their spouses, jointly with their spouses, by their dependent children, or in a few cases, by a qualified blind trust. The latest annual financial disclosures, covering 2023, were due on Aug. 15.
"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, Public Citizen
National defense funding, which is authorized annually by Congress, has grown steadily each year during the Biden administration. For fiscal year 2024, the national defense topline was at least $145 billion larger than it was in 2021, an increase of nearly 20% from the last defense budget of the Trump administration. More than half of the Pentagon budget goes to private contractors, defense policy analyst Stephen Semler found in a Sludge analysis.
In fiscal year 2024, Congress approved a record high of $953 billion in defense funding: in December 2023, it approved $886 billion through the National Defense Authorization Act (NDAA), then in April it passed a supplemental security appropriations bill with an additional $67 billion for the Pentagon. The supplemental included tens of billions of dollars in military aid for Israel, Ukraine, Taiwan, and funding to replenish U.S. weapons supplies.
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.
