President-elect Donald Trump offered billionaire investor Stephen Feinberg the job of deputy defense secretary, said people familiar with the matter, a decision that could elevate a longtime political supporter with investments in defense companies that maintain lucrative Pentagon contracts.
A spokesman for Feinberg declined to say if the private equity investor has accepted the potential nomination. Trump made the offer in recent days, according to people who spoke on the condition of anonymity to discuss the incoming administration’s personnel moves. The offer has not been previously reported.
The pick, which requires Senate confirmation, is not final until announced by Trump, his aides said. “President-Elect Trump has made brilliant decisions on who will serve in his second administration at lightning pace. Remaining decisions will continue to be announced by him when they are made,” said Trump transition spokeswoman Karoline Leavitt.
Feinberg is the co-CEO of Cerberus Capital Management, which has invested in hypersonic missiles and which previously owned the private military contractor DynCorp. DynCorp was acquired by another defense firm, Amentum, in 2020. During the first Trump administration, Feinberg led the President’s Intelligence Advisory Board, which provides the U.S. leader advice on intelligence assessments and estimates and counterintelligence matters.
The deputy defense secretary typically manages day-to-day operations of the massive bureaucracy with a combined workforce of more than 3 million service members and civilian employees. The search for a capable No. 2 has taken on heightened significance as lawmakers weigh the nomination of former Fox News personality Pete Hegseth to lead Trump’s Pentagon as defense secretary.
Hegseth, who has not run a large organization or held a senior Pentagon role, has faced scrutiny about his leadership abilities as opponents surface claims that he promoted a reckless drinking and party culture and mismanaged the finances at veterans organizations he was involved with in recent years, both of which he denies.
“The Pentagon is one of the largest organizations in the world, so it needs someone who can play the classic chief operations officer role at the number-two job,” said Michael O’Hanlon, a military expert at the Brookings Institution. “The traditional image of the deputy secretary presupposes that the secretary isn’t going to have the time or ability to run the building. In this case Hegseth might not have either.”
Critics on the left have raised concern that elevating a billionaire financier to the highest rungs of the Pentagon could pose conflicts of interest stemming from his defense investments.
“Having this revolving door of people who sit on boards of major defense contractors and then cycle in and out of the Pentagon is a problem that did not begin with Trump, but is a problem nonetheless,” said Matt Duss executive vice president at the Center for International Policy. “Is he going to be listening to a whole range of constituencies or primarily business constituencies?”
A person familiar with Trump’s choice said Feinberg would strictly adhere to requirements related to conflicts of interest. “Steve’s obviously very aware of the Office of Government and Ethics rules, and, of course, he went through the full assessment for his role with the intelligence advisory board. And so he knows exactly what he would need to do and will be prepared to be in full compliance with OGE rules and directions,” the person said.
O’Hanlon said the Feinberg pick might ease the military establishment’s concerns that the next deputy will lean too far in the direction of Silicon Valley, where start-ups that focus on drones and artificial intelligence have rapidly grown their share of a market long dominated by traditional defense firms such as Lockheed Martin and Boeing.
“I think what you want is somebody who’s aggressive about looking for new ideas but also appreciative of what works, and I think that’s where Feinberg is mentally,” said O’Hanlon.
The Wall Street Journal reported earlier on Trump’s interest in Feinberg for the Pentagon role. He also considered Silicon Valley favorite Trae Stephens, a venture capitalist who co-founded Anduril Industries, a defense start-up that specializes in advanced autonomous systems. Another candidate under consideration was former Army secretary Ryan D. McCarthy.
Some of Feinberg’s investments have focused on areas where the United States is seen as lagging militarily, such as hypersonic missiles – sophisticated, highly maneuverable weapons that China and Russia have pursued aggressively. Cerberus Capital has made investments in the testing of hypersonic components, viewed as a bottleneck in the weapon’s development domestically.
(c) Washington Post