White House considering him for job reviewing defense spending
His companies make guns and train soldiers for U.S. military
Stephen Feinberg, the billionaire under consideration for a national security role in the Trump administration, is seeking to keep his stake in his $30 billion investment firm, according to two people with knowledge of his preparations.
Cerberus Capital Management was the 17th biggest U.S. Army contractor in 2015, government records show, with holdings in companies that train soldiers and make rifles. By retaining his stake while advising the president, he would join a growing list of administration officials with ties to their businesses.
Feinberg has held talks for months with White House officials about an advisory role. Recent conversations focused on leading an effort to impose efficiency on Defense Department spending, the people said. A plan to put him in charge of an intelligence-community review ran into opposition from national intelligence director Dan Coats.
“We have no announcement at this time,” said Lindsay Walters, a White House spokeswoman.
Feinberg’s stake in Cerberus is valued at $1.6 billion, according to the Bloomberg Billionaires Index. To help distance himself from the firm, he would keep that stake but put it in a trust, one of the people said. He would also step down as chief executive officer, according to the other. Feinberg believes the arrangement could pass muster with government ethics officials, both said.
A third person with knowledge of the situation said Feinberg would comply with whatever conditions ethics officials required.
“There are a lot of risks here,” said Nick Schwellenbach, director of investigations at the Project on Government Oversight, which monitors federal spending. “How can we be assured that this person who potentially stands to benefit financially from his recommendations and decision making is making decisions that are in the broad public interest?”
Cerberus’s biggest defense holding is DynCorp International Inc., bought for about $1.7 billion in 2010. It provides aircraft maintenance and other services for military and State Department customers and once held the contract to train Iraqi police. It’s currently challenging the loss of a $10 billion federal aviation contract.
Even in an industry known for connections, Cerberus is close to current and former government officials. John F. Kelly was a DynCorp adviser before becoming Trump’s Homeland Security secretary. John W. Snow, a Treasury secretary under George W. Bush, is now chairman of Cerberus, and former Vice President Dan Quayle oversees foreign deals.
Feinberg, 57, has no experience in government. His most direct military involvement was membership in the Army Reserve Officers’ Training Corps at Princeton University. He left the program before his senior year was half over.
But he was one of Trump’s earliest Wall Street supporters, giving about $2.2 million with his wife to groups backing the candidate, and he co-hosted a $50,000-a-plate June fundraiser at Le Cirque in New York. Feinberg was photographed with the president and Defense Secretary James Mattis on their way to aircraft carrier USS Gerald R. Ford in Virginia last month.
Feinberg’s motives are good, according to Leon Panetta, a Cerberus adviser. “He really does feel deeply about duty to country,” the former head of the Central Intelligence Agency said in February.
Trump, who still owns his businesses, is surrounding himself with advisers who have potential conflicts. His daughter Ivanka isn’t divesting from her brand, her husband Jared Kushner has announced plans to retain some investments, and Trump special adviser Carl Icahn has already lobbied for a rule change that would benefit an oil refiner he owns.
When Trump was asked at a press conference in February if Feinberg would be picked to lead an intelligence review, he called Feinberg “a very talented man” who had offered his services. “And you know,” Trump said, “it’s something we may take advantage of.”
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