Senators ignore that this billionaire is a walking conflict of interest
There was bipartisan appraisal for Stephen Feinberg's arms industry ties at his DoD confirmation hearing on Tuesday
Billionaire investor and prominent private equity firm Cerberus Capital Management CEO Stephen Feinberg’s possible ascension to the Pentagon’s No. 2 role is a textbook case of the military industrial complex revolving door.
You wouldn’t know that from yesterday’s Senate Armed Services Committee confirmation hearing for Feinberg, President Trump’s nominee for Deputy Secretary of Defense, though. Largely welcoming Feinberg’s weapons industry background, senators instead probed Feinberg’s views on proposed Department of Government Efficiency (DOGE) cuts and Ukraine amid Trump era political turbulence.
Who is Stephen Feinberg?
A longtime military investor vis a vis Cerberus Capital Management, which holds about $65 billion in assets across various industries, possible conflicts of interests embroil Feinberg’s possible DoD ascension.
Indeed, Feinberg’s Cerberus sports a controversial investment track record in the defense sector. The head of the first Trump administration’s intelligence advisory board, Feinberg previously owned national security contractor DynCorp (now owned by Amentum) through Cerberus, where DynCorp controversially trained U.S.-backed fighters in Iraq, Liberia, and Afghanistan under his tenure. Some of Cerberus’ defense-related portfolio holdings, like Navistar Defense and TransDigm, have been notorious for price-gouging equipment for clients like the U.S. Marines Corps. And Cerberus-affiliated Tier 1 Group had infamously trained members of a Saudi hit team who killed Washington Post journalist Jamal Khashoggi in 2018.
These matters considered, it’s curious that none of this was raised during Tuesday’s hearing, as Feinberg would be overseeing the DoD’s day-to-day operations — including managing the defense budget — as the department's second-in-command.
In fairness, Feinberg says he’ll divest from Cerberus stake to avoid a conflict of interest if confirmed. Indeed, Senator Eric Schmitt (R-Mo.) thanked Feinberg for his pledged divestment at the hearing.
But as Quincy Institute Senior Research Fellow William Hartung explains: “Divestment alone doesn’t remove the potential for future conflicts of interest.”
“[He] could make or influence decisions that might benefit companies he would want to work for or invest in when he leaves the Pentagon. The only way to address that larger issue would be for Feinberg to pledge that he would not work for or invest in weapons firms after he leaves the Pentagon,” Hartung said.
Senators embrace Feinberg's military industry ties, question his DOGE, Russia views
Despite the stakes, Feinberg’s controversial military contracting history went largely unquestioned at the confirmation hearing. Instead, senators present, including Senators Roger Wicker (R- Miss.), Tim Kaine (D-Va)., Jim Banks (R- Ind.), and Rick Scott (R - Fl.), often chalked up this history as experience critical for the role.
“We need someone who can work alongside the secretary, harnessing the American spirit to ensure that the United States outpaces our adversaries, someone who knows how to reform organizations, improve outputs, harness innovations,” said Senator Wicker. “Not only, Mr. Feinberg, do you have extensive background investing in sectors critical to national security, but you also served on the President's Intelligence Advisory Board. So thank you for that.”
https://responsiblestatecraft.org/feinberg-pentagon/