Billionaire tied to shady military ops could be no. 2 Pentagon pick

President-elect Donald Trump has reportedly chosen private equity billionaire Stephen Feinberg as deputy secretary of defense. If confirmed, Feinberg would effectively become the Pentagon’s Chief Operating Officer, overseeing the day-to-day operations of the agency.

As the co-founder and CEO of Cerberus Capital Management, a private equity firm named after the three-headed dog guarding the gates of hell, Feinberg oversees more than $65 billion in assets, according to Pitchbook.

Feinberg is also a major Trump donor, doling out $975,000 to a Trump-aligned PAC in 2016 just days before the election before repeating the feat with an even $1 million in 2020. Feinberg was rewarded by being selected to lead a review of the intelligence agencies as the chair of the president’s Intelligence Advisory Board.

Feinberg presents as the anti-Pete Hegseth, the logical reclusive counterpart to the brash secretary of defense nominee. Plagued by scandals Hegseth claims have been generated by his political rivals, the Fox News host faces the toughest confirmation of all Trump’s nominees. On Wednesday, reports emerged that Hegseth may not have all GOP senators on board for the vote, and that Trump might be looking for a replacement. All of this makes the number two job at the Pentagon all the more relevant.

Feinberg may relish the comparison, which may make him look like a logical choice by comparison on Capitol Hill. Instead, lawmakers should comb through his record of overseeing companies that trained Saudi hit squads and defrauded the agency he is now slated to run — and raise questions over conflicts of interest arising from his stakes across the defense sectors.

Trump’s potential pick of Feinberg shines a spotlight on Cerberus’s defense portfolio. Cerberus casts a wide net across the sector, making significant investments in companies involved in defense test systems, military aircraft training, manufacturers of military vehicles, hypersonic test data, and foreign military training. With such a far reach, some watchdog organizations and conflict of interest experts are eager to ensure Feinberg will look out for American interests rather than his bottom line.

“My principal concern is whether he will follow tradition by divesting himself of all of his holdings. As the longtime CEO of Cerberus Capital Management, that would be a big deal,” Greg Williams, Director of the Center for Defense Information at the Project on Government Oversight, told RS.

Indeed, Cerberus’s investments are near-ubiquitous. The private equity firm’s portfolio includes Navistar Defense, which defrauded the U.S. Marines Corps to the tune of $50 million for inflated armored vehicle prices. Earlier this year, Cerberus bought out Transdigm, a hypersonics company that the Inspector General of the Department of Defense revealed was price-gouging, in one case to the tune of 9,400 percent in excess profit for a metal pin.

Until it was bought out in 2020, the crown jewel in Cerberus’s defense portfolio was Dyncorps, which provided planes for drug wars in Central America, and trained U.S.-backed armies in Iraq, Liberia, and Afghanistan.

Perhaps most alarmingly, a Cerberus subsidiary called Tier 1 Group trained four members of the Saudi hit squad team that murdered Washington Post journalist Jamal Khashoggi in 2018. With the approval of the State Department, Tier 1 Group reportedly trained the Saudi nationals in marksmanship, countering attacks, surveillance, and close-quarters battle between 2014 and 2017, the years preceding Khashoggi’s murder.

In 2020, Trump nominated another Cerberus executive, Louis Bremer, to a separate Pentagon post. Bremer’s nomination sparked a tense confirmation hearing, during which Sen. Tim Kaine (D-Va.) grilled him on Cerberus’s involvement with the Saudis. "Senators deserve answers to my questions about Tier 1’s role in training any Saudis implicated in the murder of Jamal Khashoggi. I don’t feel comfortable moving forward on this nomination until I get answers,” said Kaine at the time.

Should Feinberg’s nomination advance, similar questions would likely be raised by lawmakers.

“It’s concerning to see that President-elect Trump is considering another nomination for another person affiliated with Tier 1 Group,” said Raed Jarrar, Advocacy Director at Democracy for the Arab World Now, during an interview with RS. “That sends an alarming message of a lack of accountability when it comes to the murder of Jamal Khashoggi and our foreign policy.”

Feinberg will be expected to liquidate his current assets as quickly as possible, but will likely not have to sit out decisions regarding his former companies, explained Jeff Hauser, the Executive Director of the Revolving Door Project, in a phone call with RS. “It remains a near-inevitability that as part of the Pentagon’s top brass, he will make decisions regarding his former companies.”

Hauser also explained that Cerberus’s wide-ranging defense portfolio almost, ironically, may insulate Feinberg from charges of conflicts of interest. “There's an understanding in the ethics world that the more conflicted you are, the less you may have to recuse yourself. And, if he does need to recuse himself, Hauser explained, “he can get a waiver from an ethics official who has every incentive to demonstrate loyalty to the Trump administration.” Federal government employees are expected to sit out decisions involving their former employer for at least a year, but the Trump administration can issue waivers if it deems the conflict of interest will not affect the integrity of the decision.

In 2017, Feinberg and Blackwater founder Erik Prince tried to pressure the Trump administration to rely on contractors instead of American troops in Afghanistan. Feinberg reportedly put more emphasis on giving the CIA full control over operations, where paramilitary units would be “subject to less oversight than the military” — a proposal that incidentally his companies stood to gain from.

Even if Feinberg divests for his holdings, it’s impossible to divest from a baked-in contractor-first ideology.

The deputy secretary of defense “needs skeptics at the highest levels of leadership — not individuals with interests in the financial decisions of an agency with a near trillion dollar budget,” explained Julia Gledhill, a research associate at the Stimson Center, in a written statement to RS. “The revolving door continues to spin for the arms industry."

Jarrar invited lawmakers to take their pick for why Feinberg should be disqualified for the number two job at the Pentagon — “Whether it’s money in politics, relationships with foreign governments, gross violations of human rights, or training of mercenaries and killers, this nomination should be categorically rejected.”