Members of Congress trade defense stocks as war rages in Ukraine
Stock trading by members of Congress has been a long-standing issue in the American public for years. But in the recent past, it has come to be one of the hot topics discussed amongst netizens. The core question is that Politicians, also known as ‘Lawmakers’, are people who meet company executives and possess access to all kinds of information that is not accessible to the public. Of course, this includes information that can influence a company’s shares in the stock market. Trading in stocks and other assets is not illegal for Congress members. But if a Politician buys a company’s stock right before a news announcement that the company will have to ramp up production, then there is a problem.
On a March 8, 2023 broadcast of CNBC’s ‘Last Call’, host Brian Sullivan invited reporter Kate Kelly from the New York Times to speak on the above issue. This episode was the debut of Capitol Trades on the show, where Kelly cited data on Congressional trading from the site.
In the show, Kelly spoke of Rep. Diana Harshbarger who, from 2021 to 2022, was a member of the House Committee on Homeland Security. “For most of the Ukraine War she was not that committee (Homeland Security committee), and we don’t know for a fact but ostensibly privy to some non-public information, “ Kelly said in the broadcast, “She has a portfolio that has multiple components to it and it actively trades in defense stocks, some of which have played a major role in the war.”
From May 20 to October 21, 2022, Harshbarger was heavily purchasing shares of Lockheed Martin Corp (LMT:US). Lockheed Martin is an aerospace and defense company whose demand surged in the wake of Russia’s invasion of Ukraine. From January 25 to June 10, 2022, Harshbarger also stocked up on Raytheon Technologies Corp (RTX:US); also an aerospace and defense manufacturing company. As shown on ‘Last Call’ LMT is up by 13.05% since the Representative’s first purchase and RTX is up by almost 2% since her last buy.
While Harshbarger’s trades, in profit percentages, may not look that appealing, there were other Congress members who did not shy away from defense stocks during this time. Rep. Daniel Goldman, who just joined Congress in January 2023, traded actively in LMT, RTX, as well as other defense names, L3Harris Technologies Inc (LHX:US) and Northrop Grumman Corp (NOC:US). Presently, Goldman is also a member of the Homeland Security Committee and, Kelly added, is against Congress trading himself.
On questioning, both Harshbarger and Goldman have maintained that they’re not directly involved or consulted on these trades. These trades, Kelly said in detail, are made mostly by trusts that are under the name of these two Congress members. Regardless, Host Sullivan said that it does not paint Congress in a favorable light.