Warren probes Pentagon program to hire highly paid private sector workers

Sen. Elizabeth Warren is raising concerns about the Defense Department’s plan to recruit private sector professionals to improve contracting and capital allocation, warning in a letter shared first with CNBC that it could present “significant conflict of interest and revolving door concerns.”

The Pentagon created the Business Operators for National Defense program in February to embed private sector talent within the department’s acquisition process. Reporting from The New York Times and The Wall Street Journal has since revealed that the Office of Strategic Capital is also seeking private sector help and offering salaries of more than $400,000, along with opportunities for access to capital in the future, to lure employees away from Wall Street.

“I have held longstanding concerns over potential conflicts of interest, revolving door abuse, and national security concerns in DoD’s acquisition process,” Warren, D-Mass., said in the letter sent late Tuesday. “Now I am concerned about the national security implications and the corruption concerns posed by DoD’s BOND initiative and Wall Street investor team and urge DoD to implement the necessary guardrails and oversight to fully address these concerns.”

Warren took particular concern with reporting from the Times that said a headhunting firm had prepared slides for Pentagon recruiting that dangled both access to high-level U.S. and international government officials and access to fundraising channels. It’s not clear that the DOD approved the slides.

Warren sent the letter as the Trump administration continues to blend the private sector and government in often unprecedented ways — including by taking equity stakes in companies producing goods essential to the national interest. The administration has also come under intense scrutiny for some of its deal-making, some of which has muddled the line between typical government work and self-enrichment for the president, his family and Cabinet members.

The Pentagon did not immediately respond to a CNBC request for comment.

In the letter, which is addressed to Deputy Defense Secretary Stephen Feinberg and Office of Strategic Capital Director David Lorch, Warren asked nearly three-dozen questions about the Pentagon’s courting of private industry professionals. Before his current role as No. 2 in the Pentagon, Feinberg was co-CEO of Cerberus Capital Management, and Lorch was a managing director.

Feinberg set up the Economic Defense Unit at the Pentagon, which works with the Office of Strategic Capital.

Warren asked the pair to list all industry experts associated with the BOND program, along with all of the companies they are affiliated with. She also probed whether the BOND participants will be classified as government employees and whether there are ethics rules and vetting requirements for participants. She also asked whether any BOND participants or individuals hired from Wall Street to the OSC previously worked at Cerberus.

The senator also asked for a line-by-line budgetary description of how the Pentagon plans to use the $88 million it requested for BOND. And she asked how the department plans to use the $189 million it requested for the Economic Defense Unit and the $20.2 billion it requested for “its recruitment of Wall Street investors.”

Warren also asked what guardrails the Pentagon has in place to prevent conflicts of interest for executives from Palantir, Meta and OpenAI.

She also asked for specifics about who at the Pentagon has been or will be hired and receive annual compensation of $400,000 or more, and whether the bankers lured to the Pentagon will be held to ethical requirements during their tenure or in the future. She also asked whether the Pentagon approved the reported slides that promised access and capital to potential recruits.