Warren Slams Department of Defense for Turning Over Contracting Office to Wall Street, Private Equity Bankers

Financial Industry Insiders Will be Given “Unmatched Access” to Privileged Pentagon Information “There appear to be no transparency [a]nd no protections to prevent them from acting in their own financial interest rather than the public interest” Text of Letter (PDF) Washington, D.C. – Today, U.S. Senator Elizabeth Warren (D-Mass.) grilled Deputy Secretary of Defense Stephen Feinberg and Director of the Office of Strategic Capital David Lorch on the Department of Defense’s (DoD) new initiatives to populate DoD’s new contracting office with finance, tech, and defense industry insiders — and offering them government paychecks of up to $438,000 annually. “This presents significant conflict of interest and revolving door concerns, including that these individuals may gain special access to DoD decisionmakers and policy decisions at the expense of national security, fair competition, and public interest,” wrote Senator Warren . In February 2026, DoD announced its Business Operators for National Defense (BOND) initiative at DoD to bring in “industry experts” for Pentagon acquisitions. Reporting also revealed that the Pentagon is recruiting Wall Street investors through DoD’s Office of Strategic Capital (OSC) to have “unmatched access” to privileged information to build an investment team within DoD. Then, in July, additional reporting revealed that OSC would be hiring 40 employees “from an array of private-equity firms, private-credit firms and investment banks,” with top officials earning “up to $438,000 annually.” “There appear to be no transparency provisions to determine who is taking part in the initiative, and no protections to prevent them from acting in their own financial interest rather than the public interest,” continued the senator. One analyst noted that DoD has “unclear safeguards” to prevent conflicts of interest, adding that the DoD’s announcement “did not detail which (if any) ethics screening, financial disclosure, or recusal protocols apply to BOND participants.” These concerns are only heightened as DoD requested $88 million in funding for fiscal year 2027 for the BOND program, which appears as if it will be handed over to allow dozens of banking industry insiders with financial conflicts of interest to run DoD’s contracting process, with no transparency and no ethics protections in place. “The risks of waste, fraud, and abuse, along with threats to readiness and servicemembers’ lives, are obvious,” wrote the senator . “This insider-driven process is more likely to create taxpayer-funded special interest boondoggles than it is to meaningfully improve the acquisition process.” These reports come as DoD is attempting to build a “new team of investment bankers steeped in private equity to invest $200 billion over three years in defense deals,” while disregarding ethics and conflict of interest concerns. Recent reporting has even indicated that a headhunting firm recruiting for the Pentagon promised “[u]nmatched access to top-level government officials and privileged information flow — whatever your need, you can get.” Senator Warren urged DoD to implement the guardrails and oversight to fully address these concerns and demanded answers from DoD on how these programs will be operated. Senator Warren has had longstanding concerns over potential conflicts of interest, revolving door abuse, and national security concerns in DoD’s acquisition process: In June 2023, she reintroduced the Department of Defense Ethics and Anti-Corruption Act to strengthen ethics laws in DoD contracts. In July 2023, she raised concerns that DoD’s Office of Strategic Capital (OSC) hired private sector individuals who appeared to have direct financial conflicts of interest with defense consultants and defense contractors. In September 2023, she called for further transparency surrounding DoD’s OSC and how it is interpreting ethics restrictions. In January 2026, she raised concerns about DoD and OSC handing out loans and contracts to companies with ties to the Trump family. In March 2026, after DoD’ failed to provide answers to the vast majority of questions in her January letter, she pressed DoD and OSC on the processes in place to ensure that DoD contracts and loans are being fairly awarded to companies. In June 2026, she further pressed DoD on the potential conflicts of interest surrounding lucrative DoD loans and deals following reporting that the White House allegedly intervened to secure an OSC loan to a Trump Jr. company. ###