Tag: defense contractors

Five Shameless Moments of Iran War Opportunism & Grifting

As the U.S. blockade on the Strait of Hormuz threatens an already tenuous ceasefire between the U.S. and Iran, many at home are looking to profit. Below are five examples of wartime grifters, profiteers, and opportunists absolutely outdoing themselves.

Lockheed Martin CEO: wartime Trump Pentagon a “golden opportunity”

Late last month, Lockheed Martin CEO Jim Taiclet lavished praise on the Trump administration for rolling out the red carpet to the defense industry.

“This is a golden opportunity right now based on who’s in government,” Taiclet told investors during an earnings call. He cited in particular officials’ “willingness to change” and “the demand that they have for what we do and what our partners in our industry do.”

That “demand” of course is war, and the administration has pretty much been in it since Trump’s 2025 inauguration, from supporting Israel in its Gaza and Lebanon operations, firefights with the Houthis, and now Iran. Lockheed has signed billions in contracts with the Pentagon since the beginning of the year, mostly to replenish missiles. Lockheed Martin also has an agreement with the Pentagon to quadruple its production of THAAD interceptors by 2027.

And the U.S. has used many of them both. As the Center for Strategic and International Studies found late last month, the U.S. has burned up over 45% of its Precision Strike Missiles (PrSMs) and roughly half of its THAAD and Patriot missile defense interceptors.

To refill these stocks, the U.S. is mulling a possible Iran war supplemental package — slated to cost an estimated $80 to $100 billion — to replace lost munitions and other military equipment. According to Mike Fredenburg in his reporting for RS in 2024, the U.S. pays way too much for each missile, a lot more than it should for say, a SM-2 missile ($1.2 million-$2 million a piece) or SM-6 (upwards of $5 million each), but since there are only a handful of prime contractors in the business, they can charge whatever they want.

As Stephen Semler, journalist and co-founder of the Security Policy Reform Institute, tells RS, “The interceptor shortage will be addressed in the military-industrial-congressional complex’s favorite way: throw money at the problem.”

Trump’s sons roll in the drone industry dough

Powerus, a drone firm funded by President Trump’s sons, Eric Trump and Donald Trump, Jr., received an Air Force contract for an unspecified number of interceptor drones last week. Bloomberg reported last month that Powerus is also in talks with the United Arab Emirates about a potential sale of drones that can counter Iranian attacks.

In recent months, the Trump brothers have gone all out on defense tech, lining themselves up to profit from the wars their father is waging. Besides Powerus, Eric Trump has invested in Israeli attack drone firm and DoD contractor Xtend, whose drones have seen use in Iran, through a multimillion dollar contract with an unnamed Middle Eastern government. Donald Trump Jr., for his part, backs drone parts startup Unusual Machines and is also a partner at defense- and tech-oriented venture capital (VC) firm 1789 Capital.

Keith Kellogg, Trump’s former special envoy to Ukraine, also joined Powerus as an advisor last month, mere months after leaving his diplomatic post — likewise positioning himself to cash in on his time in government.

Defense-contractor funded think tanker: Iran war is a bargain!

Last week, the Pentagon estimated that the Iran war has cost about $25 billion. Matthew Kroenig, a senior director at the defense contractor-funded Atlantic Council, called the low-ball price tag a “very good value.”

“The entire U.S. defense budget is roughly $1 trillion and designed to deal with China, Russia, North Korea, and Iran,” Kroenig wrote on X. “It only cost 2.5% of the annual defense budget to seriously degrade one of the four.”

But others have to pay for Kroenig’s bargain.

“I’m sure the farmers, trucking companies, and other small businesses that are going belly up because of soaring gas prices won’t be surprised to hear that a war industry funded think tank believes the Iran war is a ‘very good value,’” Ben Freeman, director of the Democratizing Foreign Policy program at the Quincy Institute, told RS.

The total cost of the Iran war has been a point of contention. Critics challenged the Pentagon’s $25 billion estimate; U.S. officials have since told CBS the conflict has cost around $50 billion. Last month, Harvard economist Linda Bilmes predicted taxpayers will pay at least $1 trillion for it in the long term. And none of these estimates include the broader impact of the war on the global economy.

According to the Quincy Institute’s Think Tank Funding Tracker, the Atlantic Council has received nearly $13 million from Pentagon contractors since 2019.

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Reuters Peddles Fake News After Defense Contractor Misuses Civilian Starlink Terminals

Reuters dropped another misleading article today – this time attempting to manufacture drama between the Pentagon and SpaceX over Starlink usage during the Iran conflict.

The story framed routine commercial contract discussions and terms-of-service enforcement as major “tensions” and growing Pentagon reliance giving Elon Musk undue leverage.

Reuters’ version of events was that SpaceX used wartime urgency to raise the price of Starlink connections on U.S. drones from roughly $5,000 to $25,000 per terminal, forcing the Pentagon to pay up while exposing how dependent the military has become on Musk-controlled infrastructure.

The reality, according to Musk, is that the dispute centered on a more basic issue: a drone manufacturer or contractor allegedly used civilian Starlink terminals on military weapon systems, including drones, in violation of Starlink’s commercial terms of service, when the proper government and defense product is Starshield. In other words, Reuters framed the episode as a price-gouging and leverage story, while SpaceX and the Pentagon framed it as a contract-compliance story involving the misuse of civilian satellite service for weapons applications.

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Trump wages war, his sons get payoff through savvy investments

The U.S. military desperately needs drone capabilities for President Donald Trump’s war in Iran, and fast. Coincidentally, his sons Eric and Donald Trump Jr., are on the case.

Indeed, the Trump brothers are pumping money into defense-tech oriented firms that have already secured Pentagon contracts, or have already put battle-tested products to market. For example, they’ve invested in Powerus, a new drone company aiming to harness its “strong relationship with Ukraine” as a means to acquire and leverage war-tried Ukrainian drone technologies in a competitive U.S. market. Having bought out several competitors, Powerus already does business with the U.S. military.

In other words, the Trump family stands to benefit financially from the war, and already are.

Eric Trump also invests in Israeli drone firm and DoD contractor Xtend, whose “low cost-per kill” attack drones have been used by the IDF in Gaza. Expanding to the U.S., the company opened an office near Tampa last summer.

Donald Trump Jr. has a $4 million stake in, and sits on the board of Unusual Machines, a drone parts startup. In December, it secured a $620 million DoD loan — the largest loan in the history of the Pentagon’s Office of Strategic Capital — to make drone parts.

And Trump Jr. is a partner at 1789, a “patriotic capitalist” venture capital firm which backs a number of defense-tech startups. The firm, which Trump Jr. joined in November 2024 — right after his father was re-elected to the presidency — has since seen explosive growth: the assets it manages jumped in value from $150 million to more than $2 billion by the end of last year.

Suggesting the firm influences U.S. policy outright, Trump Jr. explained at a Future Investment Initiative event last year that 1789 “understand[s] what the administration wants to do, because [the firm] helped craft some of the messaging.”

Conflicts of interest percolate

As William Hartung, a Quincy Institute senior research fellow, tells RS, the Trump family’s defense-tech pursuits can be linked to a larger network of technology firms and venture capitalists that has significant influence within the Trump administration.

“The emerging military tech sector has deep ties to the administration, starting with vice-president J.D. Vance’s relationship with Palantir founder Peter Thiel, who employed Vance and helped fund his Senate run,” Hartung said. “The fact that Donald Trump Jr. — not only the president’s son but a close political advisor and unofficial spokesperson — will now profit personally from the fate of specific military tech firms adds an even more profound conflict-of-interest.”

To this end, 1789’s portfolio includes a number of defense-oriented companies, such as Anduril, Hadrian, SpaceX, and Vulcan Elements, a DOD contractor that makes rare-earth magnets, which are also backed by controversial venture capitalist Peter Thiel or his VC firm Founders Fund. A Silicon Valley kingmaker and Palantir co-founder to boot, Thiel has simultaneously worked to influence U.S. politics, bankrolling Congressional campaigns while many in his orbit now occupy major positions in the Trump administration.

Notably, Trump Jr. also sits on the advisory board of controversial prediction market Polymarket — which 1789 and Thiel’s Founders Fund also back — fostering an environment where people with insider awareness regarding the outcomes of world events could theoretically profit from that knowledge.

Hartung warns such political access — and, in the case of 1789, venture capital funding — can give certain defense-tech startups an unwarranted edge.

“Venture capital allows firms to stay in the market longer before they score their first big government contract, be it with the Pentagon, an intelligence agency, or the Department of Homeland Security,” Hartung told RS. “But once these influential firms have sunk substantial funds in a startup, they may use their influence to get that firm a contract whether or not its technology is ready for prime time, just to get a return on funds invested up to a given point in time.”

“If they can recruit the president’s son to join in boosting a particular firm, whether or not its product has been proven effective, they have a whole new level of influence, which can be wielded to serve their financial interests rather than the public interest,” Hartung said.

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U.S. Military-Industrial Complex Agrees To Quadruple Bomb Production As Operation Epic Fury Rages On

U.S. Central Command said late Friday on X that U.S. forces struck 3,000 IRGC targets with air-delivered munitions during the first week of Operation Epic Fury, signaling that the campaign is only intensifying as it moves into next week.

President Trump wrote on Truth Social Friday that he would not accept a negotiated end to the war with Iran, suggesting the conflict could drag on for some time. “There will be no deal with Iran except UNCONDITIONAL SURRENDER!” he said.

We have reported that U.S. inventories of some critical munitions are running low, with U.S. forces scrambling for supplies of key air-defense interceptors as IRGC missiles and drones continue to target American and allied bases across Gulf states.

Dwindling supplies of critical munitions are being amplified by Ukraine’s continued need for interceptors amid relentless Russian missile and drone barrages, a major problem that likely prompted President Trump to host top U.S. defense manufacturers to discuss accelerating missile and bomb production.

“We just concluded a very good meeting with the largest U.S. Defense Manufacturing Companies where we discussed Production and Production Schedules,” Trump said on Truth Social late Friday afternoon.

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Defense giants cash in as Iran conflict escalates

Defense contractors are winning on Wall Street, as the uncertainty of a war with Iran and increased tension in the Middle East continue to fuel substantial gains in the stock market. 

While oil prices surged the highest Monday, jumping more than 6% over fears of a global supply shortage, companies that build military equipment weren’t far behind — Lockheed Martin and RTX, formerly known as Raytheon, gained 3.3% and 4.7% respectively.

Shares of Northrop Grumman jumped the highest, ending the day up about 6%. 

As the DOW Jones Industrial Average fell 0.2% and the S&P 500 finished flat, all three of the world’s largest defense contractors hit new 52-week highs, according to Barron’s. 

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Pentagon Awards $328.5 Million Lockheed Martin Contract to Boost Taiwan’s Air Force

The Pentagon on Dec. 31 announced that Lockheed Martin had been awarded a contract to sell military equipment to Taiwan, as the island remains on high alert amid repeated military drills by Beijing.

In a news release, the Pentagon said it was issuing the $328.5 million ceiling contract to “meet the urgent operational need of the Taiwan Air Force.”

“This contract provides for the procurement and delivery of fifty-five Infrared Search and Track Legion Enhanced Sensor pods, processors, pod containers, and processor containers,” the Pentagon stated.

Foreign military sales worth $157.3 million are obligated at the time of the award. The work, which will be conducted in Orlando, Florida, is expected to be completed by June 30, 2031, the Pentagon stated.

The United States transitioned from officially recognizing Taiwan to maintaining formal diplomatic ties with China after adopting the U.S.-P.R.C. Joint Communique in 1979, essentially recognizing the People’s Republic of China—the Chinese communist regime—as the “sole legal government of China,” according to the State Department.

Even though the United States has upheld unofficial ties with Taiwan since 1979, the Taiwan Relations Act of that same year requires the Pentagon to supply Taiwan with “defensive capability” as a means of allowing the island to defend itself.

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Trump buys millions in Boeing bonds while awarding it contracts

Trump bought up to $6 million worth of corporate bonds in Boeing, even as the Defense Department has awarded the company multi-billion dollar contracts, new financial disclosures reveal.

According to the documents, Trump bought between $1 million and $5 million worth of Boeing bonds on August 28. On September 19, he bought more Boeing bonds worth between $500,000 and $1 million. In total, Trump appears to have bought at least $185 million worth of corporate and municipal bonds since the start of his presidency.

Kedric Payne, Vice President of the Campaign Legal Center, told RS in a phone interview there is “absolutely” a conflict of interest in Trump’s purchase of Boeing, especially since it is “a government contractor that is connected to military actions that the president controls almost unilaterally.”

Trump also bought between $1 and $5 million worth of Intel bonds in August, a week after the Trump administration took a 10% stake in the company. “I love seeing their stock price go up, making the USA RICHER, AND RICHER,” Trump posted on Truth Social on August 25. Trump purchased Intel bonds on August 29.

The partial purchase of the chip manufacturer, done under the auspices of driving technology research vital to national security, drew praise from some advocates of corporate accountability, including Sen. Bernie Sanders (I-Vt.).

Others raised concerns about how the U.S. government could maintain fairness. “Will the government favor firms in which it owns stakes over other competitors that might have better technology or processes?” asked Peter Harrell, a Non Resident Fellow at the Carnegie Endowment. Since the U.S. government’s partial ownership could give the Trump administration far more influence over the company, Trump’s personal investment in Intel could blur the lines between personal, corporate, and national interests. Intel has said the government’s partial ownership would be passive, with the government agreeing to “vote with the company’s Board of Directors on matters requiring shareholder approval, with limited exceptions.”

Upon entering office, Trump did not move his assets into a blind trust run by an independent trustee that could not be directed by the Trump family. Instead, he opted to hand over his business empire to his sons. The White House did, however, insist that the bond purchases were made by independent financial managers “using programs that replicate recognized indexes when making investments.”

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Ukraine, US finalizing deal for 25 Patriot systems, Zelensky says

Ukraine and the U.S. are finalizing a deal for Kyiv to secure 25 Patriot air defense systems, Ukrainian President Volodymyr Zelensky said on Sunday, a push that would boost the Ukrainian military’s ability to defend against Russian aerial attacks. 

“The difficulty lies in the production queue — a line of countries that have signed relevant contracts. We will be receiving these 25 systems over the years, with different quantities each year,” Zelensky said during a meeting with reporters in Kyiv, according to multiple news outlets. 

The Patriot system, which includes launchers, missiles and radar, can cost around $1 billion, and is one of the rare weapons that can intercept Moscow’s ballistic missiles, a necessary component as Russia continues to hammer Ukraine with aerial attacks. 

Ukraine will not receive the systems all at once, as it will have to wait for other nations to get the defense system that is in high demand. 

Zelensky said on Monday that Ukraine is working with the U.S. to “ensure that Ukraine still can receive the necessary number of Patriot systems. This is not an easy task, but it is one of the security guarantees for Ukraine — and it will work in the long term.” 

The long-term arrangement comes days after Zelensky’s trip to Washington, where he met with President Trump. During their meeting, which was reportedly tense at times, the two leaders discussed ways to end the Russia-Ukraine war. While in the U.S., Zelensky met with top U.S. defense contractors, including Raytheon, which produces the Patriot systems. 

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US Defense Contractors Raise Forecasts After Zelensky Meeting

Ukrainian President Volodymyr Zelensky met with several US defense contractors this week, including Raytheon, GE, and Lockheed Martin. A few days later, major defense companies raised their full-year profit estimates significantly.

Spokespeople say that tariffs have no impact on demand for the defense industry. Naturally, Ukraine is seeking duty-free defense imports on defense products paid for by other countries.

Lockheed raised its profit forecast from $22.15–$22.35 per share, up from $21.70–$22.00. The revenue forecast increased to $74.25–$74.75 billion from the previous range of $73.75–$74.75 billion. CEO Jim Taiclet noted there is “unprecedented demand” for Lockheed’s F-35 fighters, CH-53K helicopters, and of course, the highly desired patriot missiles.

“We are investing aggressively in both new digital technologies and physical production capacity needed to meet the top defense priorities of the United States and its allies — and we are doing so in partnership with a number of leading technology partners, large and small,” Taiclet said in a statement.

“In Washington, I spoke with defense companies that produce Patriots and other weapons we need. The willingness to work with Ukraine is fully sufficient — Ukraine is trusted,” Zelensky said on Monday. “It is important that there be enough support for this at the political level in Washington.”

General Electric Aerospace (GE) increased revenue guidance from “mid-teens” to “high teens” in terms of percentage growth. Free cash flow is predicted to be $7.1 billion to $7.3 billion, which is around $1 billion higher than before the meeting with Zelensky. GE stock is already up over 80% YoY, with an 83% increase in deliveries of defense equipment.

Raytheon did not publicly comment on its specific EPS ranges but had a strong Q3. RTX adjusted its full-year earnings to $6.10 to $6.20 from $5.80 to $5.95 and also tacked on an additional ~$1 billion for its sales forecast.

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Boeing given $2.7 billion in contracts for Patriot missile seekers 

Defense behemoth Boeing announced on Tuesday that it had been given about $2.7 billion in multiyear contracts to produce more than 3,000 Patriot Advanced Capability‑3 (PAC‑3) seekers through 2030. 

Boeing said the demand for PAC‑3 interceptors has spiked in light of the conflicts and tensions in Ukraine, the Middle East and the Indo-Pacific. 

Boeing is set to deliver over 3,000 seekers, a key component for the Patriot interceptor missiles, at a rate of up to 750 units a year, according to the agreements. 

The Patriot systems have been among the key tools in Ukraine’s efforts to defend against Russia’s missile and drone attacks over the past three years, and are also a key part of Taiwan’s preparations for a potential Chinese attack.

That demand has ramped up pressure on U.S. manufacturers to ensure that U.S. stockpiles aren’t depleted.

Boeing said it would work “closely” with the U.S. Army and Lockheed Martin to boost production and hit the new target for the interceptor. 

“Our team has never been better positioned to answer the nation’s call for greater air and missile defense,” Jim Bryan, the executive director of Boeing Integrated Air & Missile Defense, said in a statement. 

“These multiyear awards recognize the progress we’ve made and will allow us to meet growing global demand for the PAC‑3 seeker,” Bryan added. 

In early September, the Army awarded Lockheed Martin a $9.8 billion contract to produce PAC-3 MSE interceptors and associated hardware. 

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