The longstanding issue of lobbying and Political Action Committees’ (PAC) influence on politicians persists without resolution. It is intensifying with each passing day as an increasing number of US politicians are receiving these donations.
The defense sector is the industry exhibiting the most decisive influence and spending the most money on lobbying efforts. Many prominent companies within this sector directly donate to politicians running for office or those serving on influential committees within the US government.
These donations are aimed at influencing legislative decisions that can directly impact the stock prices of these companies.
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Lobbying expenditure from the defensive industry
Quiver Quantitative’s data reveals a significant trend: numerous former government officials and members of Congress have found employment as lobbyists or executives within defense contractor firms.
Since 2020, these firms have allocated substantial resources to lobbying efforts. Lockheed Martin (NYSE: LMT) and Raytheon (NYSE: RTX) have invested over $50 million.
Northrop Grumman (NYSE: NOC) has spent over $42 million, and General Dynamics (NYSE: GD) has dedicated more than $21 million to lobbying endeavors.
These expenditures underscore the influence and prominence of defense contractors in shaping legislative decisions and governmental policies.
Trading of defensive stocks by US politicians
One of the most notable examples of direct conflict of interest, and sometimes the misuse of power, lies in the trading of defense stocks by US politicians who hold positions on committees directly or indirectly influencing this industry.
Since 2020, over 30 members of Congress have engaged in stock trading involving defense contractors. Many of these lawmakers serve on committees that oversee defense matters.
For instance, Representative Markwayne Mullin traded Raytheon stock, Representative Michael McCaul traded Oshkosh (NYSE: OSK) stock, and Representative Josh Gottheimer traded Northrop Grumman stock.
Donations to US politicians’ campaigns from PACs
Another significant aspect of influence is evident in donations from PACs to political campaigns.
These donations often come with implicit expectations, as politicians frequently find themselves in positions where they can influence the future performance of defense stocks. Here are some examples of defense contractors contributing funds to influential members’ campaigns.
For example, Representative Mikie Sherrill and Representative Dan Newhouse, both on the Select Committee on CCP, received donations from Lockheed Martin, Northrop Grumman, Honeywell, General Dynamics, and Raytheon Technologies.
Senator Thomas Carper, who is involved in Homeland Security, also received donations from these companies. Additionally, Representative Bill Keating, who contributes to Foreign Affairs, and Representative Michael Guest, who is involved in Homeland Security, received similar donations.
These examples underscore the ongoing and escalating issue confronting US politics today, where the priorities of the nation and its citizens are sidelined in favor of the interests of large corporations.
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