Trump defends Feinberg as Iran war depletes missile stockpiles
Deputy Defense Secretary Steve Feinberg has spent the past year and a half attempting a sweeping overhaul of the Defense Department’s approach to weapons production, establishing a new procurement bureaucracy reporting directly to him and taking billions of dollars in government stakes in companies that supply critical materials, rocket engines and other key parts. He has relied in large part on companies and executives familiar to him from his time running the investment firm he co-founded, Cerberus Capital Management. Skeptics within the Defense Department worry that his Wall Street playbook is not well suited for the world’s biggest military. The U.S. is expending thousands of missiles in the Iran war, and Feinberg, in his first interview since taking the post, said his job is to improve the flow of new weapons. “The president wants more. The secretary wants more. I want more,” Feinberg said.
President Trump underscored the urgency in July, turning to Defense Secretary Pete Hegseth after a cabinet meeting at Camp David with the order “Get Feinberg on the phone,” according to The Wall Street Journal. Trump asked Feinberg why media reports continued to describe the U.S. as having paused attacks on Iran amid concerns about dwindling weapons stocks, given Feinberg’s role in addressing those stocks. After the call, Feinberg sent a series of terse memos to military contractors, including one requesting quick-turnaround proposals to surge production of military technology such as radars, and another demanding that contractors open their accounting systems to provide “pricing transparency” to Pentagon officials. Smaller companies viewed the transparency request as particularly galling, describing it as adding more red tape to their work, and a later memo reduced that burden for them.
The overhaul has produced a series of contracts and hires drawn from Feinberg’s Wall Street network. The Pentagon has paid $300 million to Alvarez & Marsal, a corporate turnaround advisory firm and longtime Cerberus partner, in addition to existing government employees. It has hired about 300 retired auto and other executives under a group called the Business Operators for National Defense, who are paid government salaries of $150 to $170 per hour to visit the factories of military contractors and their suppliers and offer advice. The department has also provided up to $244 million to the data-analysis company Palantir for a platform called War Machine intended to improve efficiencies at military contractors, in addition to the hundreds of millions of dollars Palantir is separately paid by the department for other work. Some Pentagon officials have privately questioned why the department, rather than military contractors, should pay for some of those efforts; Feinberg said the added help addresses specific needs. “There’s a big shortage in the department of capable operators,” he said. “Our acquisition teams and our department people are terrific, but they’re not operational manufacturing people.”
Congress has yet to fund most of the overhaul. Feinberg has struck more than a dozen preliminary deals intended to prod weapons makers and their suppliers to speed up munitions production, but lawmakers have not appropriated money for them as they haggle over the details of the administration’s $1.5 trillion defense budget request. The funding gap surfaced acutely in a December secure meeting in which Feinberg told lawmakers the Pentagon urgently needed roughly $28 billion in additional funding for new missile purchases; lawmakers and aides found the request out of step with the funding bills they had already wrapped up for the year, and they eventually added about $8 billion. Todd Harrison, a defense-industry analyst at the American Enterprise Institute, likened the preliminary munitions deals to “a plan to make an agreement.” “None of that matters unless you have funding to get things started,” Harrison said. Feinberg said the multiyear deals signal to defense firms that the Pentagon is committed to buying their products over the long term, and some companies have started expanding facilities to increase production.
Feinberg has stepped up his outreach to Congress in recent weeks. In early September, he met with Rep. Tom Cole, a Republican from Oklahoma and chairman of the House Appropriations Committee, and Rep. Ken Calvert, a Republican from California and chairman of its defense subcommittee, for a three-hour dinner at Calvert’s house that featured steak and cigars. The focus, Cole said, was “trying to figure out, honestly, ways to get them more money. That’s the biggest thing that you need to do. You need to do it soon.”
The overhaul has also drawn political turbulence. In August, Trump ally Laura Loomer said “Feinberg’s mess” would be a problem for Trump and Hegseth if he was not “put on a tighter leash.” In recent weeks, various media outlets have reported that White House officials interviewed possible replacements for Feinberg, which the White House has denied. Feinberg said he had no plans to leave: “I have total support from the White House and the department, and I’m all-in to the end of the term.” White House spokeswoman Anna Kelly said “President Trump has full confidence in the Department of War under the stellar leadership of Secretary Hegseth.” At a Tuesday ceremony for a new Navy shipyard, Trump said he thought Feinberg was doing a fantastic job.
Conflict-of-interest concerns have trailed the effort. Feinberg placed his Cerberus interests in an irrevocable trust for his adult children when he joined the department, and a senior Pentagon official said profits on national-security investments that would otherwise go to the trust will go to charity. Critics, including some Trump allies and Democrats, have pointed to potential conflicts from Cerberus’s portfolio, which includes companies that draw on U.S. national-security spending, from hypersonic weapons to military logistics. The firm also launched a defense-focused venture-capital fund in 2024. Sen. Elizabeth Warren, a Massachusetts Democrat, told Feinberg in a July letter that she had “ongoing concerns” about the issue. Sen. Richard Blumenthal, a Connecticut Democrat, has warned during hearings against taking an overly broad, corporate-restructuring approach to the military’s budget and workforce.
Other firms from Feinberg’s private-sector life are playing a role. The Pentagon has hired the law firm that represents Cerberus, McDermott Will & Schulte, to help negotiate some of the deals. Some weapons makers have hired advisers including Feinberg’s former bank, Goldman Sachs, to negotiate with the government — talks that in the past did not usually involve Wall Street firms. Two senior deputies to Feinberg also have ties to Alvarez & Marsal: Pete Guinto recently left the department to work for the firm, and George Kollitides was a partner at a separately managed investment firm associated with it called Alvarez & Marsal Capital. A McDermott spokeswoman said the firm’s Pentagon work is reviewed by U.S. ethics officials and that the firm would be recused on transactions with a Cerberus affiliate. A Cerberus spokesman said Feinberg “is not involved in the operations of Cerberus or its portfolio companies in any way.” Goldman Sachs declined to comment.
Feinberg acknowledged the work is unfinished and that missteps are likely. “We have to address our production,” he said. “I’m sure I’m going to make the mistakes, okay? And I’m sure everyone will talk about the mistakes when we make them. But that’s part of trying to make changes and being urgent.” Some Pentagon officials said the work in part replicates work the department is already doing, noting that the Pentagon has a separate in-house team to spur armaments production and an office with thousands of government employees working in contractor factories. Feinberg said the military program managers still have a role in the department’s work and that the Pentagon saved billions of dollars last fiscal year by “optimizing” the civilian workforce and making other budget cuts. He said he was inspired to serve in government by his father and uncles, who served in World War II, and added: “I grew up in a humble, modest way. I want to help America.” “I’m glad our bosses are also putting on the pressure,” he said. “We have to perform.”