Four U.S. politicians have profited from purchases they made in shares of defence companies just ahead of the Israel-Hamas conflict.
Since the October 7 attack by Hamas on Israel, in which more than 1,400 Israelis were killed, shares of Boeing Co, Lockheed Martin, Northrop Grumman, and Raytheon Technologies (RTX) have all increased in value, collectively adding roughly $23 billion in market capitalization.
In the weeks preceding the attack, Markwayne Mullin, Kevin Hern, Bill Keating, and Josh Gottheimer purchased shares of those defense companies.
As of Thursday, 8,805 Palestinians in Gaza had been killed in the conflict, according to the Hamas-run Health Ministry, the Associated Press (AP) reported. A further 130 Palestinians had been killed in violence and Israeli raids in the West Bank, the AP said.
Political stock filings come in ranges, not exact amounts. Thus the exact profits from the transactions can only be estimated once the stocks are sold. There is no suggestion of any wrongdoing by these politicians.
Newsweek contacted Mullin, Hern, Keating, and Gottheimer via email for comment.
Senator Mullin and Representative Hern, both Oklahoma Republicans, reported multiple purchases of RTX. Records show Mullin acquired an amount between $16,000 and $65,000 in RTX across transactions dated in September, with disclosures filed in October.
Representative Hern's dealings were reported in a range from $1,000 to $15,000 in RTX shares, made on September 7 and reported by October 13. Hern also engaged in an earlier purchase of RTX on June 15, disclosed a month later, and invested a similar amount in Lockheed Martin on June 23, all of which he still retains.
Since Senator Mullin's and Representative Hern's initial purchases, shares of RTX are up 10 percent, with a more pronounced 18.85 percent increase following the events of October 7.
On the Democratic side, Keating, a Massachusetts representative, reported investing between $15,000 and $50,000 in Boeing Co on September 15, with the shares up approximately 3 percent post-attack.
New Jersey Representative Gottheimer's investment in Northrop Grumman, reported to be between $1,000 and $15,000 and made on September 26, has seen an almost 12 percent increase since October 7, and an 11 percent increase from his purchase date.
For comparison, the broad market S&P 500, which tracks the stock performance of the 500 largest companies in the U.S., is down 0.25 percent since October 7.
Wall Street analysts from Morgan Stanley and TD Bank have taken note of the potential financial benefits from the escalating conflict during recent earnings calls, with a focus on the aerospace and weapons sector.
As the Pentagon mounts support for Israel, analysts say there could be further upside in the defense sector.
The story of politicians trading stocks—including defense stocks—amid global conflicts is not new, but it has been brought closer to the surface in recent years with watchdog websites like Unusual Whales and Capitol Trades.
In response to growing scrutiny and public demand for transparency, Democratic Senator Kirsten Gillibrand and her Republican counterpart Josh Hawley introduced the Ban Stock Trading for Government Officials Act in July. The bipartisan bill seeks to enforce strict bans on stock trading and ownership by Congress members, senior executive branch officials, and their immediate families.
The proposed legislation comes as a direct measure to mitigate potential conflicts of interest and ensure decisions made by those in power are free from personal financial influence.
By mandating the divestiture of stocks and the dismantling of blind trusts for those in high office, the bill intends to draw a clearer line between public service and private gain. The move is grounded in a belief, shared by both senators, that public trust is paramount and that government officials must be held to the highest standard of accountability.
Update 11/02/23 2:17 p.m. ET: The headline and story have been updated.
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
Aj Fabino is a Newsweek reporter based in Chicago. His focus is reporting on Economy & Finance. Aj joined Newsweek ... Read more
