When the Pentagon decides to invest $1 billion in a defense contractor, it's the kind of news that sends stock prices soaring. And when several members of Congress who sit on defense committees just happen to own shares in that same company, well, people start asking questions.

L3Harris Technologies Inc. (LHX) announced Monday that it's spinning off its missile business into a separate public company. The Defense Department isn't just cheering from the sidelines—it's backing the new entity with a $1 billion investment through convertible preferred securities. These will convert into common stock when the company goes public, expected in the second half of 2026. L3Harris will maintain a controlling stake after the IPO.

The separated company will focus on some serious hardware: Tomahawk missiles, Standard Missiles, PAC-3, and THAAD defense systems. These are the kinds of weapons systems that tend to stay busy when geopolitical tensions rise.

Who's Holding the Shares?

According to government trading records, three Congress members have purchased L3Harris stock since early 2025 without selling those positions:

• Rep. Richard McCormick (R-Ga.): Bought $1,000 to $15,000 on November 5
• Rep. Gil Cisneros (D-Calif.): Bought $1,000 to $15,000 on May 30
• Sen. Markwayne Mullin (R-Okla.): Bought $15,000 to $50,000 on May 13 and another $15,000 to $50,000 on February 13

Here's where it gets interesting. Cisneros also holds shares in Chevron Corporation (CVX), Lockheed Martin (LMT), and Palantir Technologies (PLTR)—all stocks that analysts have flagged as potential beneficiaries of recent military actions in Venezuela. Mullin owns Chevron (CVX) shares as well.

The Committee Problem

All three lawmakers serve on defense committees, which is where this story gets uncomfortable. These are the people who have access to information about defense spending, military priorities, and potentially even advance knowledge of Pentagon investments.

McCormick sits on the House Armed Services Committee, including the Tactical Air and Land Forces Subcommittee and the Cyber, Information Technologies and Innovation Subcommittee. Cisneros serves on the House Armed Services Committee too, specifically the Intelligence and Special Operations Subcommittee and Military Personnel Subcommittee. Mullin holds positions on the Senate Armed Services Committee, including the Airland Subcommittee, Seapower Subcommittee, and Emerging Threats and Capabilities Subcommittee.

The Pentagon's $1 billion investment wasn't negotiated overnight. These deals take months to work out, which means it's entirely possible that members of defense committees, Trump administration officials, and their allies knew this was coming. The question is: who knew what, and when?

Timing Is Everything

Recent military actions in Venezuela have put defense and oil stocks in the spotlight. President Donald Trump has talked about raising the defense budget, and there are proposals for military actions elsewhere. All of this creates a favorable environment for defense contractors.

When lawmakers who oversee defense spending also profit from rising defense stock prices, it raises obvious questions about conflicts of interest. Are they making policy decisions based on national security needs, or are they influenced by their personal financial stakes?

The Stock Is Certainly Happy

L3Harris (LHX) stock hit a new all-time high of $361.59 in early trading Tuesday. Shares were trading at $347.59 at the time of reporting, up 2% on the day. Over the past 52 weeks, the stock has surged 62.5%.

For the lawmakers holding those shares, the Pentagon's billion-dollar vote of confidence is paying off nicely.