Commerce Secretary Howard Lutnick has been appointed by the Department of Defense to review any transactions between the Pentagon and companies associated with Cerberus Capital Management, according to a US official. The unusual appointment puts Lutnick in charge of vetting deals involving a company that does business with the investment bank he ran until joining the Trump administration last year. As reported by Bloomberg, this role is meant to go above and beyond Defense Department ethics policies, including those laid out by the Pentagon's Standards of Conduct office.
Lutnick and Cerberus have maintained business relationships for over a decade. According to Bloomberg, Cantor Fitzgerald, the investment bank Lutnick led before becoming commerce secretary, has helped Cerberus oversee its investment funds since at least 2012. Cantor and its subsidiary Newmark have partnered with Cerberus on major real estate financing deals involving an office tower in Los Angeles, a Prime Data Centers development, and distribution centers for Albertsons supermarkets. Just last month, Newmark negotiated a new lease for Cerberus on its headquarters at 875 Third Ave. in Manhattan. Cantor, now run by Lutnick's sons, serves as the prime broker for an assortment of Cerberus funds, as reported in public filings.
Several Cerberus-owned defense contractors have been awarded significant new business from Feinberg's department. As reported by Bloomberg, last month M1 Support Services announced it had won a 26-year contract with a $10 billion ceiling to train army helicopter pilots. A year ago, Stratolaunch, a hypersonic testing firm owned by Cerberus, won a $90 million contract from the Pentagon. In 2024, Cerberus acquired a controlling stake in M1, which is among the 100 largest contractors to the Pentagon, according to data published by the General Services Administration.
According to the US official who disclosed Lutnick's new role, Cerberus alumni within the Defense Department are required to recuse themselves from any transactions involving Cerberus assets. Any agency transactions that touch on Cerberus business are presented to Commerce Secretary Lutnick for review and approval. However, it remains unclear whether Lutnick reviewed the M1 and Stratolaunch contracts, and what exactly the extent of his purview is. Under Feinberg's leadership, the Pentagon has been taking equity stakes in firms deemed crucial to national security, in addition to providing loans.
Democratic lawmakers have raised questions about Lutnick's potential conflicts of interest this year. In February, three senators sought information about a deal struck by the Commerce Department to invest $1.6 billion in a rare earths company, USA Rare Earth, Inc., which also announced that day it had worked with Lutnick's former firm to raise private funds. Right-wing provocateur Laura Loomer criticized the scale and timing of the M1 helicopter-training contract, though Pentagon spokesman Sean Parnell rebuffed accusations of conflicts of interest. Feinberg has brought four former executives from the firm into the Pentagon, with two placed in charge of the Office of Strategic Capital and the Economic Defense Unit, which are charged with shoring up supply chains for critical resources.
