- The politicians hold posts on either the House or Senate armed-services panels.
- They're investing their money in defense contractors such as Lockheed Martin, Raytheon, and Boeing.
- Potentially profiting off oversight duties is indefensible, ethics watchdogs say.
At least 15 lawmakers who hold powerful positions on a pair of House and Senate committees that control US military policy have financial ties to prominent defense contractors that together were worth nearly $1 million in 2020, according to an Insider analysis of federal financial records.
And throughout 2021, both Democrats and Republicans serving on the congressional Armed Services committees have continued to invest in or cash out of the most important players in the military and defense industry.
Some of the world-renowned weapons makers and defense-technology developers peppered across the committee members' financial disclosures were Lockheed Martin Corp., Boeing Co., Raytheon Technologies Corp., Honeywell, and General Electric. All are companies that also annually spend millions of dollars lobbying the federal government to prod elected officials, shape policy, and win lucrative government contracts.
Lawmakers with investments riding on defense contractors' well-being — some worth upward of five figures — include seasoned Capitol Hill veterans and Washington newcomers, Insider found when analyzing documents disclosing their personal financial holdings for 2020.
The tally is part of the exhaustive Conflicted Congress project, in which Insider reviewed nearly 9,000 financial-disclosure reports for every sitting lawmaker and their top-ranking staffers.
Atop the list is the 16-term Rep. Jim Cooper, a Democrat of Tennessee who chairs the House panel's Strategic Forces Subcommittee. He reported owning up to $65,000 worth of stock in General Electric at the end of 2020, with up to $50,000 worth of it held in a tax-favored individual retirement account and up to $15,000 worth held in a brokerage account established for one of his children.
A diversified company that produces a variety of products, GE describes itself as a "leading supplier of integrated systems and technologies for combat aircraft, military transport, helicopters, land vehicles and unmanned aerial vehicles."
Democratic Reps. Joe Courtney of Connecticut and Mikie Sherrill of New Jersey reported briefly owning defense-related stocks during 2020. Courtney is in his eighth term and chairs the House panel's Seapower and Projection Forces Subcommittee. Sherrill is a second-term lawmaker and considered a more junior member of the House Armed Services Committee.
Both told Insider they had since divested themselves of individual stock holdings and diversified their portfolios by investing in mutual funds or exchange-traded funds.
The wife of Democratic Rep. Ro Khanna of California, Ritu Khanna, invested up to several hundred thousand dollars in a collection of defense contractor stocks at some point in 2020, including Boeing, General Dynamics, General Electric, Honeywell, Northrop Grumman, and Raytheon. Ro Khanna served on the House Armed Services Committee then, as he does now in his third term as a member of Congress.
While Ritu Khanna sold many of those stocks before 2021, she has made several four- or five-figure trades in Honeywell in 2021, according to federal financial disclosures.
"My wife has assets prior to marriage which are legally not mine, and it's not my place to tell her what to do with her separate assets," Ro Khanna told Insider.
Two more Democrats — Reps. Rick Larsen of Washington and Joe Morelle of New York — both reported having less than $1,000 tied up in defense companies.
Larsen is in his 11th term and one of the House committee's most senior members, though he doesn't hold an official leadership position on the panel. Morelle is in his third term but just got his seat on the Armed Services panel in January. Their offices did not respond to repeated requests for comment about their finances.
Across the aisle, Republican Rep. Pat Fallon, a freshman of Texas who secured a coveted spot on the armed-services panel upon his arrival on Capitol Hill, reported buying and selling up to $1.4 million worth of Boeing stock this year, much of it between January and April. He also reported owning up to $50,000 worth of stock in General Electric.
Fallon did not respond to repeated requests for comment about his finances. Insider earlier this year reported that Fallon failed to properly disclose dozens of stock transactions together worth millions of dollars, which his spokesperson attributed to the congressman's unfamiliarity with federal conflict-of-interest laws.
Fellow new arrival Rep. Blake Moore, a GOP freshman from Utah, reported owning up to $50,000 worth of stock in Boeing and up to $50,000 in Raytheon shares at the end of 2020. The congressman has continued purchasing defense contractor stocks in 2021, buying up to $60,000 worth of Raytheon shares between February and May and $15,000 worth of Boeing shares in July. Shares in Raytheon have increased in value since the beginning of 2021, while shares in Boeing have fallen.
Moore in 2021 has also bought and sold up to $180,000 worth of stock and stock options in Alibaba Group, the Chinese e-commerce giant that has demonstrated ties to China's Communist Party. His most recent Alibaba stock option purchase came on November 19, federal records show. US military officials have regularly warned of China's advances in military technology and capabilities, and Moore himself is an outspoken critic of China's government.
Moore, who also this year failed to properly disclose stock trades in violation of federal law, did not respond to repeated requests for comment about his finances for this story. In July, Moore's office told Insider in a written statement that "upon entering Congress, Congressman Moore made an intentional effort to learn the new financial requirements and simplify and consolidate his financial investments."
Republican Rep. Austin Scott of Georgia reported buying and selling up to $45,000 worth of stock in General Electric in late 2020. A spokesperson for the six-term lawmaker, Rachel Ledbetter, said Scott and his wife "own stocks like millions of American families do.
"And they follow all laws on trading," she added.
Republican Rep. Mike Gallagher of Wisconsin, now in his third term in Congress, reported that his wife, Anne Horak Gallagher, sold up to $50,000 worth of stock in Lockheed Martin in January 2020 as part of the couple's shift to investing in mutual funds or exchange-traded funds. Six-term Republican Rep. Mo Brooks of Alabama said he inherited shares of General Electric when his mother died in 2019 but otherwise depended on a financial advisor to handle his investments.
Republican Rep. Rob Wittman of Virginia said he had no knowledge of the up to $15,000 worth of Lockheed Martin stock and up to $15,000 in Honeywell shares that flowed through his portfolio, telling Insider an investment manager handled his finances. Now in his eighth term, Wittman is the GOP ranking member for the panel's Seapower and Projection Forces Subcommittee.
"Mr. Wittman believes members of Congress should not improperly benefit from their role," Sarah Newsome, a spokesperson for Wittman, wrote in an email, adding that her boss "remains committed to accountability and transparency in government."
Across the Capitol, Republican Sen. Tommy Tuberville, a freshman of Alabama, reported owning nearly $200,000 worth of stock combined in Honeywell, Lockheed Martin, General Electric, Raytheon, and General Dynamics.
Tuberville also violated the federal Stop Trading on Congressional Knowledge Act of 2012 this year by disclosing nearly 130 stock trades weeks or months late.
Tuberville has continued trading defense contractor stocks during 2021, most recently on October 18, when he sold his stakes in General Dynamics and General Electric, each worth up to $50,000, according to federal records. Like Moore, Tuberville also trades heavily in Alibaba, buying and selling up to $215,000 in stock options on September 13.
Ryann DuRant, his spokesperson, previously downplayed questions about her boss' finances, telling Insider the former college-football coach had "long had financial advisors who actively manage his portfolio without his day-to-day involvement."
Altogether, Tuberville's campaign received $89,100 in contributions from defense-sector PACs and employees when he ran for office in 2020, according to OpenSecrets.
Democratic Sen. Jacky Rosen of Nevada and her husband, Larry Rosen, reported co-owning up to $110,000 worth of stock in General Electric. Democratic Sen. Gary Peters of Michigan reported owning up to $15,000 worth of stock in Raytheon.
Rosen and Peters — both are more junior members without leadership roles on the Senate Committee on Armed Services — did not respond to repeated requests for comment about their personal finances.
Dialing up defense
Whether they have leadership positions on the committees or not, all 15 lawmakers who have made investments in the defense industry all sit on the House and Senate panels responsible for writing the annual defense-authorization bill that bankrolls the military personnel and subcontractors in their home districts.
Earlier this month, the House passed its version of the nearly $770 billion National Defense Authorization Act bill. It now awaits a Senate vote and Biden's signature.
"If you are invested in any of the top defense contractors then you stand to benefit personally from that bill," said Dylan Hedtler-Gaudette, government affairs manager at the nonpartisan Project on Government Oversight who called the investments "a clear conflict of interest."
Under current law, members of Congress must disclose all of their individual stock trades in a public database within 30 to 45 days of conducting the transaction, depending on the trade. There is also no prohibition against lawmakers sitting on congressional committees, writing legislation, or voting on bills that might affect them financially.
The defense companies that members of Congress invested in spend millions of dollars annually lobbying the federal government, including Congress, on a variety of issues. In 2020, Lockheed Martin spent nearly $14 million, General Dynamics spent nearly $11 million, and Honeywell spent nearly $5 million, according to OpenSecrets.
The defense-contracting industry also has huge influence on other congressional panels, including the House and Senate Appropriations committees that funnel hundreds of billions of federal dollars every year into government programs and contractors, Hedtler-Gaudette said. Numerous federal policymakers also have defense contractors in their states and districts, who call up lawmakers as the defense spending bills are being drafted to warn that people will lose jobs if funding decreases.
"The hardest thing to do is 'vote against the military' or 'vote against the troops,'" Hedtler-Gaudette said. "That's why every year you see an increase in the Pentagon's spending budget."
Numerous federal policymakers also have defense contractors in their states and districts. Their job is to call up lawmakers as the defense-spending bills are being drafted to say people will lose their jobs if funding decreases.
This year, as Congress prepared to debate the National Defense Authorization Act for fiscal year 2022, Rep. Diana Harshbarger, a Republican of Tennessee, purchased thousands — possibly up to tens of thousands — of dollars of stock in the defense contractors Oshkosh Corp. and Raytheon, according to a federal financial disclosure.
Harshbarger, who Insider in August reported violated the federal Stop Trading on Congressional Knowledge Act through her tardy disclosure of hundreds of stock trades, is a member of the House Committee on Homeland Security. The committee has congressional oversight responsibilities for the Department of Homeland Security, an agency that frequently contracts with Raytheon, for one.
The congresswoman employs a financial planner to manage her portfolio "without any authorization, direction, or approval from Congresswoman Harshbarger," said Zac Rutherford, her chief of staff.
Meanwhile, Rep. Marjorie Taylor Greene, the Georgia Republican whom the House stripped of committee assignments earlier this year over the 1st-term congresswoman's history of violent comments and promotion of conspiracy theories, purchased up to $15,000 worth of Lockheed Martin stock as recently as November 15, federal records indicated.
Conflicts between stock portfolios and constituents
Government watchdogs criticized the practice of US lawmakers trading in defense-contractor stocks, especially members of the committees with oversight of policy, budgets, and spending.
"It is impossible to avoid the appearance of a conflict of interest when you have individual stock in a company whose industry you influence, and you can pick the winners and losers," Kedric Payne, the general counsel and senior director of ethics at the nonprofit Campaign Legal Center, told Insider.
Divorcing policymaking power from personal enrichment is paramount to preserving our democracy, officials at the nonprofit watchdog organization Citizens for Responsibility and Ethics in Washington said.
"Americans shouldn't have to be concerned about members of Congress being more focused on their stock portfolio than on the country's problems and their constituents' best interests," Meghan Faulkner, CREW's digital director, wrote.
One of her colleagues who spoke to Insider put it more bluntly. This person who was not authorized to speak to a reporter flat out urged Congress to ban individual stock trading — for the good of everyone.
"At worst, it's a sign of abject corruption," the CREW aide told insider. "And at best, it's a distraction — even for well-meaning members — from the work that they're actually supposed to be doing: passing laws and conducting oversight."
Senior correspondent Robin Bravender contributed to this report.